Background : Economic evaluation is a tool to aid the decision-making for efficient resource allocation. As recently it was proposed that cost-effectiveness should be one of important criteria on the decision for the reimbursement and pricing of drugs, economic evaluation attracted a lot of interests in Korea. Efficient resource allocation will also become a critical health policy issue in Korea because of increasing health expenditure and limited health care resources. Results : Now is the tim: for us to learn some lessons from advanced countries, particularly European countries. European countries have developed their own unique health care system and different approaches for pharmaceutical economic evaluation. We reviewed the general trends of economic evaluation of drugs, and compared several approaches in European countries. Pharmaceutical economic evaluation has been developed as not only a part of medical technology assessments, but also that of pharmaceutical policies. More and more European countries used cost-effectiveness as one of important criteria for the reimbursement and pricing decision about drugs. Even though there were variations in contribution of economic evaluation to reimbursement and pricing decision, and standard guidelines for economic evaluation from country to country, a tendency that pharmaceutical economic evaluation became mandatory was noticed. Conclusions : From the experiences of European countries, we can learn some lessons. The interests and commitment of decision makers are crucial to introduce pharmaceutical economic evaluation and to develop its infrastructure. Transparency of researches and independency from sponsor will be important issues. The criteria and decision process for reimbursement and pricing should be more specific and specialized to improve efficient decision making.