OBJECTIVES: The safety profile of new drugs is usually not fully established upon market entry, giving cause for Europe’s comprehensive pharmacovigilance system. A key regulatory vehicle to communicate the outcomes of pharmacovigilance activities is the Periodic Safety Update Report (PSUR), which summarizes a product’s worldwide safety data and facilitates periodic assessment of its benefit-risk profile. We assessed the cost-effectiveness of all PSURs submitted in Europe during 1995-2009 for biologicals, using a societal perspective.  METHODS: We evaluated two regulatory scenarios: Full Regulation (pharmacovigilance including PSURs) and Limited Regulation (pharmacovigilance without PSURs). We assessed the source of regulatory action for all urgent safety issues that were identified for biologicals during 1995-2009. In two out of 24 urgent safety issues (systemic spread of botulinum toxin and edema after use of dibotermin-alfa), PSURs were the regulatory instrument that identified the safety issue and we assumed these issues would have been discovered five years later under limited regulation.  Estimates from the literature and Markov-chain life tables were used to calculate costs and effects of PSURs for biologicals. RESULTS: The incremental cost-effectiveness ratio (ICER) of Full Regulation versus Limited Regulation was €342,110 per quality-adjusted life year gained. Extensive sensitivity analyses indicated a low probability of the Full Regulation scenario being cost-effective. Only two parameters resulted in a more favorable ICER: a 100% risk reduction after identification of the urgent safety issues (base-case assumption was 25%) and a high risk (1 in 1,000 patients) of severe systemic spread after therapeutic use of botulinum toxin (base-case assumption 1 in 10,000 patients).  CONCLUSIONS: Regulatory cost-effectiveness analysis is a feasible instrument for assessing the (added) value of parts of the drug regulatory framework. In light of high costs of regulatory compliance, cost-effectiveness should be a consideration in deciding whether or not safety-related regulatory actions are required.