INTRODUCTION: The growing evidence of the increased frequency and severity of adverse drug events (ADEs), besides the negative impact on patient's health status, indicates that costs due to ADEs may be steadily rising. Observational studies are an important tool in pharmacovigilance. Despite these studies being more susceptible to bias than experimental designs, they are more competent in assessing ADEs and their associated costs. OBJECTIVE: To identify and characterize the best available evidence on ADE-associated costs. METHODS: MEDLINE, Cochrane Library, and Embase were searched from 1995 to 2015. Observational studies were included. The methodological quality of selected studies was assessed by Cochrane Collaboration tool for experimental and observational studies. Studies were classified according to the setting analyzed in 'ambulatory', 'hospital', or both. Costs were classified as 'direct' and 'indirect'. Data were analyzed using descriptive statistics. The total incremental cost per patient with ADE was estimated. RESULTS: Twenty-nine (94%) longitudinal observational studies and two (7%) cross-sectional studies were included. Twenty-three (74%) studies were assessed with the highest methodological quality score. The studies were mainly conducted in the US (61%). Twenty (65%) studies evaluated any therapeutic group. Twenty (65%) studies estimated costs of ADEs leading to or prolonging hospitalization. The 'direct costs' were evaluated in all studies, whereas only two (7%) also estimated the 'indirect costs'. The 'direct costs' in ambulatory ranged from euro702.21 to euro40,273.08, and the in hospital from euro943.40 to euro7,192.36. DISCUSSION: Methodological heterogeneities were identified among the included studies, such as design, type of ADEs, suspected drugs, and type and structure of costs. Despite such discrepancies, the financial burden associated with ADE costs was found to be high. In the light of the present findings, validated methods to measure ADE-associated costs need future research efforts.