Although most commonly used drugs cause adverse effects, some of them with potentially serious consequences, relatively little is known about their economic impact. The purpose of this review is to summarise information describing the cost of treatment of drug-induced adverse effects as an additional cost of pharmaceutical treatment. The focus of this study was limited to the overall economic impact of drug-related morbidity and to the economic analysis of a single class of drugs with different safety profiles. Several studies carried out in the US have investigated adverse drug effects experienced by hospitalised patients and their impact on hospital costs. Patients who developed adverse effects were hospitalised an average of 1.2-3.8 days longer than patients who did not, with additional hospital costs of $US2284-5640 per patient (2000 values). Other research studies in different countries have quantified the incidence and economic consequences of adverse drug effects that occur in the ambulatory setting and that generate hospital admission and emergency department visits. They have shown that preventable adverse effects constitute between 43.3% and 80% of all adverse outcomes leading to emergency visits and hospital admissions, and disproportionately increase healthcare costs. Finally, a recent estimation revealed that in the US the cost of problems linked to drug use in the ambulatory setting exceeded $US177 billion in the year 2000.NSAIDs constitute a widely used class of drugs and they are one of the leading drug classes in causing adverse effects. The acquisition costs of the drugs, as well as the costs for prevention and treatment of adverse effects, determine their cost-effectiveness ratio. Depending on the incidence and severity of adverse effects, the cost per adverse effect avoided ranges from $US215 to $US35 459 (2000 values). According to the contingent valuation methodology, willingness to pay to avoid or reduce the incidence of adverse effects is an indicator of the value individuals associate with the impact of such effects on their well-being. Individuals are willing to pay annually an average of $US240 and $US350, respectively, to avoid vomiting and gastrointestinal distress induced by NSAIDs. Although the results of the different studies reviewed are not strictly comparable because of differences in the severity of adverse effects, the perspective of the analysis, the cost data included and the cost component considered, the data show that, apart from the implications for health, a substantial quantity of resources are used to treat adverse effects.