Methodology used in pharmacoeconomic research is briefly described in the introductory section, followed by the results of cost-ofillness studies and present information on clinical effectiveness and cost-effectiveness of drugs used in the treatment of Alzheimerćs and Parkinsonćs disease. Studies show that the burden of Alzheimerćs and Parkinsonćs disease is substantial. Not only patients but also caregivers are strongly affected by the diseases. Yearly costs per patient with Alzheimerćs or Parkinsonćs disease increase sharply as disease progresses. Presently available drugs for the treatment of Alzheimerćs disease show only modest effect. Moreover, there is a lack of research evaluating the effect of drugs on the quality of life of these patients, so no firm conclusions about the cost-effectiveness of these drugs can be reached. Effectiveness of drugs used in the treatment of Parkinsonćs disease is clinically relevant, nevertheless, large and long-term studies are needed. The existing pharmacoeconomics studies show that from societal perspective, additional cost of new drugs for the treatment of Parkinsonćs disease is potentially outweighted by other savings.