OBJECTIVES: To review the challenges for conducting economic evaluations of pharmacogenomic-based interventions (PGx) by: 1) identifying key factors that may influence cost-effectiveness; 2) describing how the "value" of PGx can be measured using willingness-to-pay approaches; and 3) discussing specific examples of the challenges faced by industry and regulators in valuing and implementing PGx. METHODS: Data was obtained from systematic searches of the Medline literature, interviews with key participants from industry and government, and our analyses conducted for biotech companies and the U.S. Food and Drug Administration. RESULTS: There are very few published cost-effectiveness analyses of PGx, and few analyses measuring willingness-to-pay for these new technologies. Much of the data needed to evaluate PGx are uncertain or complex to model, particularly 1) what populations should be tested; 2) concurrent development of test and drug combinations; 3) modeling the development of genomic risk profiles and test accuracy; 4) considering long-term and induced effects, and 5) evaluating how the value of PGx will be interpreted by patients, providers, insurers, and regulators. We discuss case studies of these challenges and provide examples of how they might be resolved. CONCLUSIONS: The expanded use of pharmacogenomics offers many potential clinical benefits but also many economic challenges. Academic researchers must work together with industry and government to address these challenges if the promises of pharmacogenomics are to be achieved.