The societal and individual costs of Alzheimer's disease are significant, worldwide. As the world ages, these costs are increasing rapidly, while health systems face finite budgets. As a result, many regulators and payers will require or at least consider phase III cost-effectiveness data (in addition to safety and efficacy data) for drug approval and reimbursement, increasing the risks and costs of drug development. Incorporating pharmacoeconomic studies in phase III clinical trials for Alzheimer's disease presents a number of challenges. We propose several specific suggestions to improve the design of pharmacoeconomic studies in phase III clinical trials. We propose that acute episodes of care are key outcome measures for pharmacoeconomic studies. To improve the possibility of detecting a pharmacoeconomic impact in phase III, we suggest several strategies including; study designs for enrichment of pharmacoeconomic outcomes that include co-morbidity of patients; reducing variability of care that can affect pharmacoeconomic outcomes through standardized care management; employing administrative claims data to better capture meaningful pharmacoeconomic data; and extending clinical trials in open label follow-up periods in which pharmacoeconomic data are captured electronically by administrative claims. Specific aspects of power analysis for pharmacoeconomic studies are presented. The particular pharmacoeconomic challenges caused by the use of biomarkers in clinical trials, the increasing use of multinational studies, and the pharmacoeconomic challenges presented by biologicals in development for Alzheimer's disease are discussed. In summary, since we are entering an era in which pharmacoeconomic studies will be essential in drug development for supporting regulatory approval, payor reimbursement and integration of new therapies into clinical care, we must consider the design and incorporation of pharmacoeconomic studies in phase III clinical trials more seriously and more creatively.