OBJECTIVES: Health care efficiency related to drug use is highly debated while ageing, growing prevalence of chronic diseases and greater use and development of more innovative and expensive products incur substantial burden on health insurance systems. Study objective was to assess health care system inefficiencies related to medicines to identify where efficiency gains might be made. METHODS: A literature review was conducted at macro-economic level from World Health Organization, Organization for Economic Co-operation and Development, and European Commission official websites, completed by an interview of European health care providers, patient groups representatives, HTA and payers’ experts, as well as search in Medline database, national health authorities’ websites and available grey literature to illustrate the different categories of inefficiencies. RESULTS: Health care system inefficiencies related to medicines can be classified in five categories: 1) irrational use of medicines, e.g., polypharmacy when not medically necessary, lack of treatment coordination, non-conformance with prescribing guidelines, prescribing inefficiency, poor treatment adherence, off-label use of medicines, and drug wastage; 2) non-availability of appropriate treatment options in some therapeutic areas or for specific sub-groups (e.g. elderly and paediatric populations); 3) shortage of mature products due to industry issues to competitively supply the market; 4) disparities in drug access between and within European countries; 5) suboptimal framework in terms of health technology assessment, as well as drug pricing and reimbursement setting rules, e.g., drug budget silo, different procedures between drug classes, lack of indication-specific pricing or incomplete information related to pharmaceutical prices across countries which might lead to inefficient resource allocation. CONCLUSIONS: These health care system inefficiencies deserve attention and should be addressed whenever possible by initiating dialogues between policy makers, patients, health care providers, payers and industry to enhance development of pharmaceuticals addressing unmet medical needs, efficient use of pharmaceuticals, thus contributing to sustainability of health care systems.