OBJECTIVE: Escalating costs have become a major concern for health care professionals and decision makers in Europe. The purpose is to give an overview of the current trends in health care policy reform in Central and Western Europe, especially with regards to cost containment measures. The focus will be on the requirements for health economic data and budgetary impact data for pricing and reimbursement decisions. METHODS: We performed an extensive literature review of payment policy documents and internal documents, which were supplemented with in interviews in the study countries in Europe. We interviewed: 1) local academic experts on pricing / reimbursement, and representatives of, 2) central health care authorities: and 3) International Federation of Pharmaceutical Manufacturers Associations. RESULTS: There are three main trends in Europe: 1) a decentralization process with regards to decision-making process; 2) creation of market mechanisms in order to increase efficiency; and 3) authorities show an increasing demand for health economic and budgetary impact data. Formal requirements for health economic studies mainly relate to the central reimbursement decision-making process for innovative drugs. Decisions by formulary committees are still mainly based on traditional data on efficacy and side effects, but those local authorities increasingly to take health economic data into consideration, although the decision-making process at decentralized level will remain much more informal. CONCLUSION: Finally the consequences of the implementation of formal requirements will be addressed, which may have considerable consequences for all players involved.