OBJECTIVES: In Ukraine the government authorizes the State program of maintenance of the population by medical products for 2004-2010, which provides use of pharmacoeconomic analysis methods. The State Formulary for pharmaceutical provision are formed. METHODS: We have analyzed all available pharmacoeconomic studies published in Ukraine for 1998-2004 to assess methodological problems and potential for future use of pharmacoeconomics in drug policy. RESULTS: We have established, that the quantity of published pharmacoeconomic researches has increased in 7.3 times. Methodological quality is generally insufficient. Cost-minimization is the preferred technique although differences in effectiveness are not properly assessed. Few studies desribe costing and cost-effectiveness methodologies. Modeling studies are weak due absence of epidemiological and economical database. Societal perspective is rarely used – the health care perspective prevails. Little study exist in Qol measurement and cost-utility techniques. Industry use of pharmacoeconomics is mainly for supporting marketing and sales. Physicians are increasingly receptive of pharmacoeconomic analysis, but little value on modeling approaches. We develop methodical recommendations on use of pharmacoeconomic analysis methods in Ukraine, authorized by Ministry of Health. We have conducted the analysis of consumption of antidiabetic agents in the defined daily doses. We published the circular "A Technique of pharmacoeconomical analysis "cost-effectiveness" for definition of need in medicinal tools in Ukraine". CONCLUSION: Pharmacoeconomics must improve methodological standarts in Ukraine. This is a task for both government and industry with the purpose of creation of State Formulary.