We analyzed the cost-effectiveness of all Periodic Safety Update Reports (PSURs) submitted for biologicals in Europe from 1995 to 2009 by comparing two regulatory scenarios: full regulation (PSUR reporting) and limited regulation (no PSUR reporting, but all other parts of the pharmacovigilance framework remain in place). During this period, PSUR reporting resulted in the detection of 2 out of a total of 24 urgent safety issues for biologicals: (i) distant spread of botulinum toxin and (ii) edema/fluid collection associated with off-label use of dibotermin-alfa. We used Markov-chain life tables to calculate costs and health effects of PSURs. The incremental cost-effectiveness ratio (ICER) of full regulation (PSUR reporting) vs. limited regulation (no PSUR reporting) for the base-case scenario was €342,110 per quality-adjusted life year (QALY) gained. It is possible to assess the cost-effectiveness of regulatory requirements using the same methods as those used in assessing the cost-effectiveness of medical interventions. Clinical Pharmacology & Therapeutics (2013); 93 5, 433–442. doi:10.1038/clpt.2013.13