Increasing health care cost is a major concern in developing world. Patients are affected by the high pricing of drugs and though the symptoms improve the poor patient compliance sets in if the regimen is heavy on the pocket of the patient. Therefore, concept  of Pharmacoeconomics  are essential for physicians to prescribe individualized drug therapy based on essential drug concept, STEP as well as rational utilization of drug( R.U.D.) criteria, with  minimal costs to improve the cost-effectiveness of the drug therapy. Sensitizing medical undergraduates on pharmacoeconomics during second year training will inculcate the habit of prescribing cost effective medicine and cost consideration throughout their medical career and will decrease the monitory burden on the patient and the society. A module on PE was prepared and implemented in tertiary medical hospital for second year medical undergraduates. Information on essential drug concept and on PE was given to the second year medical undergraduates by organizing didactic lectures. In practical session individual cost, total cost of prescription was discussed by giving exercise on simulated case history with drug therapy. Students performance on the pharmacoeconomics was assessed by pre and post project questionnaire. Statistical analysis shows significant differences between pre and post project questionnaire. This show that second year MBBS students sensitized for Pharmacoeconomics can consider the cost of a drugs while prescription writing in future. Exercise shows successful sensitization of students on PE. Thus PE can be introduced in second year pharmacology curriculum for cost consideration of drugs and total cost of prescription while prescription writing for the patient.

Key words: Medical curriculum, suitability, tolerance, efficacy and price of the drug (STEP), rational utilization of drug (RUD), pharmacoeconomics.