The rising cost of drug therapy has been accompanied by demands from payers for pharmacoeconomic studies to assess the value for money of new treatments. There are 5 types of such analyses: cost analysis (evaluates only costs); cost minimization (compares costs of treatments with identical outcomes); cost-effectiveness (evaluates the cost of treatment in relation to clinical benefit to derive a cost per outcome); cost utility (evaluates cost of treatment in relation to survival adjusted for quality of life,) and cost benefit (evaluates all clinical outcomes, such as prolonged life, in monetary terms). The most commonly used are cost-effectiveness and cost utility. The aim of this article is to provide the nonexpert reader with a basic understanding of these analyses, using pharmacoeconomic evaluations of clopidogrel for acute coronary syndromes as examples. Greater clinician understanding of pharmacoeconomic principles (and pitfalls) will enhance input of the physicians into the decision-making process to maximize the benefit of limited health care resources.