The aging of the general population in industrialized countries has brought to public attention the increasing incidence of age-related clinical conditions, because the long-term impact of diseases on functional status and on costs are greater in older people than in any other age group. With the aging of the population, it is becoming increasingly important to quantify the burden of illness in the elderly; this will be vital not only in planning for the necessary health services that will be required in coming years, but also in order to measure the benefit to be expected from interventions to prevent disability in older people. The management of multiple and chronic disorders has become a more important issue for healthcare authorities because of increasing requests for medical assistance and healthcare interventions. Among these, pharmacological treatments and drug utilization in older people are pressing issues for healthcare managers and politicians; indeed, a relatively small proportion of the population accounts for a substantial part of public drug costs. Two key sources of pressure are well known: the growing number of elderly persons, who are the highest per-capita users of medicines, and the introduction of new, often more expensive, medicines. On the other hand, the development of strategies for controlling costs, while providing the elderly with equitable access to needed pharmaceuticals, should be based on an evaluation of the economic impact of pharmacological care in older people, taking into account the burden of illness, drug utilization data, drug technology assessment evidence and results. Furthermore, there are major factors affecting pharmacological care in older people: for example inappropriate prescribing, lack of adherence and compliance, and the burden of adverse drug events. The assessment of these factors should be considered a priority in pharmacoeconomic evaluations in the aging population, and the most relevant evidence will be reviewed in this paper with examples referring to particular settings or conditions and diseases, such as the presence of cardiovascular risk factors, diabetes and chronic pain.