Previous attempts to conduct economic evaluation of pharmacy services are almost exclusively from the US and the UK. Studies from the US concentrate largely on the drug cost savings realised by pharmacists. Few detail the costs of service provision and even fewer give an estimate of service benefits other than decreased drug expenditure. UK evaluation to date focuses on quantifying pharmacists' interventions, but there is no clear indication of the quality or the impact of these. This article proposes a model for economic evaluation and discusses the factors which make evaluation results useful to decision makers. The costs and outcomes, that need to be considered for economic evaluation, are discussed and the example of a pharmacist led anticoagulation clinic is used. The nature of modern health care systems demands that services are effective and, increasingly, cost-effective. If pharmacy as a profession is to develop, decision makers must decide that pharmaceutical care delivered by pharmacists is a cost-effective use of health care resources. Politics, education and cost pressures will mean that decision makers are likely to put more weight on the results of economic evaluation in future. If pharmacists do not start to provide good quality data about the costs and outcomes of pharmacy services then other evaluators will.