The development of biologic agents for the treatment of rheumatic diseases will necessitate inclusion of pharmacoeconomic analyses in the phase III trials. These products are expensive to manufacture, administer, and monitor. Typically, they require parenteral administration and regular monitoring. Often the duration of benefit is brief; although they may effectively serve as "induction therapy." For example, we have a "wonderful new biologic agent," judged effective by the ACR preliminary index for improvement, which after 2 treatment courses at +1500 (US) each, offers a year of "clinically meaningful" improvement with an acceptable safety profile in most patients. How will we convince our regulatory authorities and health services agencies that it should be approved and added to our formularies? It will be necessary to prospectively collect information about its costs (both direct and indirect) and the costs of alternative treatments. In the multicenter clinical trials for approval, patients' opinions about their health status, quality of life, and the treatment itself must be sought. In addition to a disease specific measure of function/disability, a generic measure of health status/quality of life should be included. Use of a health utilities instrument will allow comparison of different therapeutic interventions. The promise of specifically targeting disregulated immune responses without altering underlying normal immune function makes biologic agents uniquely attractive for use in an early disease population. It will therefore be important to identify those indirect costs saved or gained by maintaining function and work capacity, as well as the direct (and indirect) costs incurred by treatment associated toxicities.(ABSTRACT TRUNCATED AT 250 WORDS)