Pharmacoeconomics is founded on the key principle of economics, which is that society's resources are limited, and therefore, choices have to be made about the use of those resources. Pharmacoeconomic analysis should estimate the costs and consequences of different drug treatments, including the use of all health care resources, not drug costs alone. Application of these principles to appropriate antimicrobial treatment requires separate consideration of a sequence of questions: Who needs treatment? What are the best drug, dose, route of administration, and duration of therapy? What information do we have about the outcomes of treatment? None of these questions is easy to answer, but economic analysis will help the decision maker by making explicit the costs and consequences of the available alternatives.