As a consequence of its prevalence, early onset and chronicity, schizophrenia imposes clinical and economic impediments to healthcare practitioners. Among the armamentarium of agents available to treat the symptoms of this devastating illness, the atypical antipsychotics have received a great deal of attention. Although these agents have proven valuable, their use has often been limited as a result of high acquisition costs relative to the older conventional antipsychotics. This review examines the relevant literature concerning the pharmacoeconomics of clozapine, risperidone and olanzapine, and incorporates the findings into a discussion enveloping the general principles of pharmacoeconomics.Comparisons of the pharmacoeconomic studies of atypical antipsychotics often resulted in inconsistent findings because of differences in methodologies, outcome measurements and perspectives. While all 3 antipsychotics improved clinical outcomes, the literature suggests that clozapine is cost effective in patients with treatment-refractory symptoms, whereas risperidone and olanzapine may be cost neutral. One finding that emerged repeatedly with these drugs is that they consistently reduce hospitalisation costs as a result of a decrease in the rate of hospital admission and duration of stay (although this does not always translate into a reduction in overall costs).More than ever, healthcare practitioners and decision-makers alike are faced with the challenge of providing quality care while balancing fiscal responsibility. Further pharmacoeconomic studies on atypical antipsychotics are necessary to facilitate the practitioner in meeting these challenges.