In the context of new challenges, issues facing the science, practice, and future of pharmacoeconomics will be discussed. Certain methodologic weaknesses have been observed in published pharmacoeconomic studies, and compromises need to be made between developing an "ideal" method and allowing a study to remain practicable. The objective is to reach a balance between clinical trial-based studies and projective models; trials have high internal validity but low external validity, while models can help explore relevance to real-life settings. Cross-national differences also have an important impact on pharmacoeconomic data; however, using some basic standardized guidelines results from pharmacoeconomic studies may be generalized to other settings. The use of pharmacoeconomic results by decision makers in the United Kingdom has been restrained by unclear priorities within their authority and by the limited availability of credible studies. The future of pharmacoeconomics lies in developing both trial-based and modeling studies, improving their credibility, and meeting the needs of decision makers.