OBJECTIVES: Pharmaceutical companies are under pressure to assess the economic value of their pipeline assets.  Pharmacoeconomic (PE) analysis can be employed to improve the decision-making process by providing robust estimations of comparative economic value before the commercial launch. Clinical and Comparative Economic Value (CCEV) methodology, has been developed to provide insights into the sources of economic values of innovative products (drugs, devices, services) to inform critical decisions across the product life cycle.  METHODS: A multi-state disease model is developed to simulate the major clinical events in the disease progression. Real-world data on actual healthcare resource consumption and patient clinical characteristics are used. Time horizon of the models should be long enough to capture meaningful differences in outcomes. The differential clinical attributes of the products are identified and direct links are established with the corresponding economic values. The resulting impact on disease progression and consequences for consumption of healthcare resources are simulated.  The primary output is the cost-avoidance against the chosen comparator, with corresponding breakdown by each clinical attribute.  RESULTS: CCEV directly translates the differences in clinical outcomes to the differences in economic values. This methodology has been effectively applied in the decision process at different stages of drug development, such as, to prioritize pipeline assets by comparing the potential economic value of assets under development and quantifying the value of each differentiated output. These insights are used to guide and design the following data generation strategies. CONCLUSIONS: CCEV methodology directly translates clinical outcomes to economic values and is a practical PE tool for decision makers. It can be employed across the entire product life-cycle, starting from the early stages of drug development.