This article is intended to introduce the reader to the concepts of CEA/CBA for purposes of evaluating innovative pharmacy services. Furthermore, sensitization to the issues surrounding CEA/CBA studies should allow the reader to be more discriminating in reviewing such reports in the literature. Rising costs for health care and the existence of limited resources are forcing policy makers to allocate resources in ways that maximize return-on-investment. It is felt by some that in the 1980s, researchers will be expected to answer the questions, 'How much better is the innovation?' and 'How do the expected benefits of an innovation compare with the benefits that could be obtained if the resources were used in some alternative way?' Part of the solution will require changes in the training and practice of health professionals. Future physicians, pharmacists, and others will need to acquire skills from the behavioral, social, and decision sciences (e.g., epidemiology, statistics, economics, decision analysis). The notion of cost-effective clinical decision making needs to be taught at all levels. Health practitioners involved with decision making at the level of the patient need to become more knowledgeable of the overall impact (regarding costs and benefits) of their decisions. Finally, evaluation of innovative pharmacy services is but one element of a management program for clinical services. Our attempt is not to deemphasize the need for studies documenting the value of clinical services, but rather to put evaluation in perspective with an equally important need, the need for development of an overall pharmacy program that is not only cost effective but efficient as well. The means to this end is a total management program integrating all pharmacy services.