OBJECTIVES: To understand the extent of likely variation if any in underlying relative efficacy and relative effectiveness of drugs used in one or more of the 27 Member States (MS).  METHODS: A systematic literature review of studies in four databases was conducted for the period January 2000 - May 2010: Medline, Embase, EconLit and Health Management Information Consortium (HMIC). Logical combinations of keywords related to effectiveness, generalisability, external validity, transferability, Europe and review were searched. RESULTS: A total of 326 articles were initially identified and ten formed the bases of the review. Nine were reviews or original cost-effectiveness studies and relevant data on the effectiveness results was extracted. First, we found that there is a common assumption in the literature that relative efficacy is constant across countries and therefore generalisable. Less is known about whether relative effectiveness is indeed similar or different. Second, we grouped the factors that could potentially introduce variation in relative effectiveness: (i) patients and disease characteristics; (ii) comparators used; (iii) different measures of health outcomes; (iv) variations in clinical practice. Third, no observational studies were identified. Evidence from studies using efficacy data, mainly from RCTs, was mixed; three studies found no differences in clinical outcomes across countries, one study found differences due to patients’ characteristics and severity and another study using multilevel analysis found country and patients characteristics explaining partly the heterogeneity of treatment effects. One review report differences in clinical practice as one major causes of variations in clinical outcomes between countries. CONCLUSIONS: The literature was scarce and therefore more evidence is needed before any statement can be claimed on the existence of variations in relative effectiveness or efficacy in different countries.  Future collaboration among the MS harmonising methodology, generating data and sharing patients’ registry data will be crucial to produce this evidence.