The Scandinavian Simvastatin Survival Study (4S) has confirmed the link between the cholesterol-reducing effects of simvastatin and improved survival in patients with hypercholesterolaemia and pre-existing coronary heart disease (CHD). Pharmacoeconomic analyses of the 4S trial, using prospectively collected data for cost-generating events, demonstrate that the cost per year of life saved for simvastatin in such patients falls within the range considered cost effective. Reductions in resource utilisation costs (numbers of hospitalisations and revascularisation procedures) largely offset the acquisition cost of long term simvastatin treatment in the US. Models of primary prevention incorporating epidemiological data to predict CHD events generally suffer from deficiencies in the methods and assumptions used, and no firm conclusions can be made at present regarding relative cost effectiveness of the drugs studied, including simvastatin. It is generally agreed that cost effectiveness will improve in patients with higher absolute risk of CHD. In summary, simvastatin has been shown in a major clinical trial and its companion economic analyses to reduce mortality and to be cost effective in patients with hypercholesterolaemia and existing CHD. As is the case for others of its class, its cost-effectiveness ratio in primary prevention remains to be ascertained. This issue aside, simvastatin is a rational choice of cholesterol-lowering agent in secondary prevention whose use can be justified on an economic basis.