OBJECTIVES: In 1993 the Australian Government was the first national government to introduce an evidence based, pharmacoeconomic strategy to drug reimbursement. The system has now been running for 10 years and provides a valuable case study of how such an approach can evolve and how it can impact on drug pricing and utilization. METHODS: Over the life of the scheme, approximately 1000 submissions have been made to the reimbursement committee. One of the authors has been involved in excess of 150 of these submissions. For the purposes of this review we assessed positive recommendations for reimbursement and determined the number of new listings on the national formulary from 1993 to date. RESULTS: The amount and complexity of work required as part of a reimbursement application has increased dramatically over the period. Further, the evaluation process has improved in sophistication and has become increasingly critical of the evidence supplied by industry. The Committee has also chosen to limit the set of recommended economic evaluation methodologies, which can be employed in submissions. The number of new drugs made available over the period of the scheme has changed. The type of drugs that gain listing has altered as a result of the pharmacoeconomic approach and local prices have been affected. CONCLUSIONS: An evidenced based, pharmacoeconomic approach can dramatically influence the type of drugs which gain public funding and the prices paid for these. The acceptable methodologies and approach to submissions by the authorities has also changed over time.