Economic evaluation is fundamentally a systematic assessment of the cost and consequences that are associated with health interventions. Usually, the assessment involves a comparison of competing alternatives. The result of economic evaluations is an items in the tool box for allocating resources at various levels of the health system. Whilst economic evaluation is an umbrella term for analysing the relationship between the cost and consequences of interventions and programs, cost effectiveness analysis is a specific type of economic evaluation whereby the outcome is measured in natural units such as life-years gain or quality-adjusted life-years, disability averted, cases detected, etc.

Economic evaluation is broadly stratified into trial- or study-based and model-based economic evaluation. The inputs for trial-based economic evaluations are generated almost entirely from the index clinical trial or clinical study. The intervention(s) under consideration are invariably those that were assessed as part of the index trial

Model base-economic evaluation is mathematical framework for representing a series of events that are expected to be associated with the use or implementation of health interventions. Unlike trial-based economic evaluation, evidence can be drawn from diverse sources, including clinical trials, systematic reviews, case study, expert opinion and much more.