Non-compliance with drug therapies not only limits their effectiveness, but in some instances, is associated with grave clinical sequelae and substantial economic burden. It is important, therefore, to consider non-compliance in economic evaluations. A review of pharmacoeconomic evaluations, which have applied sensitivity analysis to non-compliance rates, was undertaken to evaluate the impact of non-compliance on the cost-effectiveness of different drug therapies. Although 22 evaluations satisfied the inclusion criteria, additional information was obtained from the authors of most studies, as the published details were inadequate. The majority of evaluations assumed altered effectiveness owing to reduced compliance in the absence of supportive clinical evidence. Because of the disparity in the nature of the outcomes, the measures of non-compliance and the time horizon of the studies evaluated, it was not possible to compare the magnitude of the impact of non-compliance among different drug–disease combinations. However, it was evident that non-compliance always results in a reduction in efficacy, but its impact on costs varied substantially. The importance of incorporating measures of compliance is highlighted, as failing to account for ‘real world’ compliance rates in pharmacoeconomic evaluations may lead to selection of sub-optimal treatment strategies. Copyright © 2001 John Wiley & Sons, Ltd.