OBJECTIVES: To identify the main causes of variation in study results from place to place, to assess whether the variation differs by type of health economic study, to assess whether differences among countries are systematic and whether the differences are important for decision-making. METHODS: A literature search was conducted to identify economic evaluations of pharmaceuticals conducted in two or more European countries. These included reports of multicountry studies and separate reports of single country studies that were sufficiently methodologically comparable. The studies identified were then classified by methodological type and analysed to assess their level of generalizability and to identify the main causes of variation. Assessments were also made of the extent to which differences in study results among countries were systematic and whether they would lead to a different decision, assuming a range of values of the threshold willingness-to-pay for a life-year or quality-adjusted life-year (QALY). RESULTS: In total 46 intercountry drug comparisons were identified, 29 in multicountry studies and 17 in single country studies that were considered to be sufficiently comparable in terms of methodology. The type of study (i.e. trial-based or modelling study) had some impact on generalizability, but a more important factor was the extent of variation across countries, in effectiveness, resource use or unit costs, allowed by the researcher's chosen methodology. Cost-effectiveness results did differ widely between countries and in general such differences were not systematic (e.g. the result for Germany was not always more favourable than that for the UK). However, if a cost-effectiveness threshold (i.e. willingness-to-pay) for a life-year or QALY of $50,000 were assumed, the implications for decision-making would be similar across countries. CONCLUSIONS: It is concluded that, where the analyst allows factors to vary, cost-effectiveness results differ by country. However, the implications of such variation for decision-making depend critically on the cost-effectiveness thresholds applying in Europe.