OBJECTIVES: The field of health economics (HE) has undergone vast growth over the last decade. One continually evolving main factor is the motivation for performing HE studies, in particular in Canada because of changing requirements for provincial formulary submissions. The objective of this study was to determine how HE data is being applied by the Canadian pharmaceutical industry to date. METHODS: A survey was sent to key personnel working in HE in the Canadian pharmaceutical industry and followed-up. Data from returned surveys were compiled in a database, tabulated, and evaluated. RESULTS: Twenty-one (84%) of 25 surveys sent to companies reporting previous experience with HE were returned; 90% of these companies were firms with more than 100 full-time employees. Of the respondents, 67% currently have a department or unit whose sole responsibility is HE, up from 12% reported in a previous study for 1995. The application of HE information by Canadian pharmaceutical companies is most often for provincial formulary submissions (100%), marketing (86%) and pricing (81%). It is also used by 62% of respondents for internal training and medical education programs. Relatively few Canadian companies apply HE information to managed care decision-making (38%) and patient education (24%). Health economic research data was published by 3/4 of the respondents in the form of scientific posters or conference presentations and by 2/3 in the biomedical, peer-reviewed literature. Ninety percent of respondents cited plans for new HE studies in Canada within the next year. CONCLUSION: Canadian companies have expanded their use of HE data in recent years. The focus has shifted from preferential internal use (pricing and marketing) to more external purposes such as provincial and hospital formulary submissions. Health economic research data also find a place in training within pharmaceutical companies and in medical education.