Background: This study compares first-line pembrolizumab plus chemotherapy with chemotherapy alone for patients with HER2-negative advanced gastric cancer (GC) and gastroesophageal junction cancer (GEJC) in China. Methods: A Markov state-transition model was developed based on the phase 3 randomized KEYNOTE-859 clinical trial data. The health state utility values and direct medical costs were derived from the KEYNOTE-859 clinical trial, the relevant literature, and local charges. The measured outcomes included quality-adjusted life-years (QALYs) and the incremental cost-effectiveness ratio (ICER). Probabilistic and one-way sensitivity analyses (OWSA) were performed to assess the uncertainty of the model. Results: In the base analysis, the incremental effectiveness and cost of pembrolizumab plus chemotherapy versus chemotherapy alone were 0.22 QALYs and $16,627.31, respectively, resulting in an ICER of $76,936.60/QALY, which is higher than the willingness-to-pay threshold in China ($35,864.61/QALY). Subgroup analyses revealed that the ICERs of pembrolizumab plus chemotherapy versus chemotherapy alone were $72,762.68 and $34,813.70 in the populations with PD-L1 CPS of 1 or higher (CPS ≥ 1) and PD-L1 CPS ≥ 10 (CPS ≥ 10), respectively. Conclusions: As first-line therapy for patients with locally advanced or metastatic HER2-negative GC/GEJC in China, pembrolizumab plus chemotherapy is less cost-effective than chemotherapy alone, however, in the CPS ≥ 10 subgroup is more. [ABSTRACT FROM AUTHOR]