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Many countries lack fully functional pharmacovigilance programs, and public budgets allocated to pharmacovigilance in industrialized countries remain low due to resource constraints and competing priorities.Using 3 case examples, we sought to estimate the public health and economic benefits resulting from public investment in active pharmacovigilance programs to detect adverse drug effects.We assessed 3 examples in which early signals of safety hazards were not adequately recognized, resulting in continued exposure of a large number of patients to these drugs when safer and effective alternative treatments were available. The drug examples studied were rofecoxib, cerivastatin, and troglitazone. Using an individual patient simulation model and the health care system perspective, we estimated the potential costs that could have been averted by early systematic detection of safety hazards through the implementation of active surveillance programs.We found that earlier drug withdrawal made possible by active safety surveillance would most likely have resulted in savings in direct medical costs of $773–$884 million for rofecoxib, $3–$10 million for cerivastatin, and $38–$63 million for troglitazone in the United States through the prevention of adverse events. By contrast, the yearly public investment in Food and Drug Administration initiated population-based pharmacovigilance activities in the United States is about $42.5 million at present.These examples illustrate a critical and economically justifiable role for active adverse effect surveillance in protecting the health of the public.