The economic evaluation of health care technologies has a key role within the new National Health Service health technology assessment process. There has, however, been little discussion of the best way of combining economic and clinical research. Economic evaluation should be iterative, generating progressively firmer estimates of cost-effectiveness and helping to maximise the efficiency of health care R&D. Here, four stages of economic analysis are suggested, starting with stage I when the basic clinical science is complete, and finishing with stage IV analysis to generalise the results of earlier studies to routine clinical practice.