OBJECTIVES: To evaluate and delineate current prominence of pharmacoeconomics in Nepal, and identify the key challenges in gaining effective and economic health care. METHODS: Literatures review of the studies on conceptualization of pharmacoeconomics in Nepal and other developing countries. RESULTS: With escalating applications of economic evaluation of health care cost, majority of the middle-income and few low-income countries have already espoused pharmacoeconomics. While some Asian countries have adopted customized version of Health Technology Assessment (HTA) in reimbursing drug-use and making formulary decisions, Nepal still has an informal HTA programs with decisions made irrespective of cost effectiveness. With total expenditure on health about 5.5% of the GDP and almost non-existing (private) health insurance, large amount of drug-cost is still paid by the public, enforcing them to confront escalating drug-expenses. Two to three universities running pharmacy courses spare only a couple of hours to teach about pharmacoeconomics. CONCLUSIONS: Without much hype, trying to impose pharmacoeconomics model of other countries, into Nepalese health system, may not be justifiable. Poor competencies to deal with inequities, inefficient system due to fragmented resources allocation, limited power to negotiate and passive purchasing practice of the government – the key stakeholder – has impeded the concept of pharmacoeconomics. Moreover, bipolar system of pharmacy education and its practice, and lesser concern of other stakeholders – pharmaceutical companies, research organizations and the payers – are equally responsible for the staggering growth of pharmacoeconomics in Nepal. In addition, scarcity and/or accelerating brain-drain of the specialists, especially pharmacists, has further hindered the use and interpretation of HTA. Ironically, these constraints can be a driving factor to catalyze the need of adopting more formalized approaches to support health care decisions. Technical collaborations, impelling vigorous research works and funding from the better-of-positioned nations will definitely propel improvements in academic, research and health care, overall sprouting the concept of pharmacoeconomics in Nepal, at a greater speed.