The article investigated the necessity of pharmacoeconomic and expounded its position, role and application in hospital pharmacy adminstration. In order to abate the burden on patients and community, the specification of standard diagnosis and treatment should be made, the catalogue of basic medication and standard formulary for the clinician should also be compiled. The hospital pharmacy adminstration should be made more institutional and scientific, the medicine and medical cost could be cut down more effectively, and the medication in hospital could be used more normative and more reasonable. Pharmacoeconomic is a methodology on practicality in hospital pharmacy adminstration.