Background: The use of targeted therapies has recently increased. Pharmacogenetic tests are a useful tool to guide patient treatment and to test a response before administering medicines. Pharmacogenetic tests can predict potential drug resistance and may be used for determining genotype-based drug dosage. However, their cost-effectiveness as a diagnostic tool is often debatable. In Germany, 47 active ingredients are currently approved. A prior predictive test is required for 39 of these and is recommended for eight. The objective of this study was to review the cost-effectiveness (CE) of pharmacogenetic test-guided drug therapy and compare the application of drugs with and without prior genetic testing. Methods: A systematic literature review was conducted to identify the CE and cost-utility of genetic tests. Studies from January 2000 until November 2015 were searched in 16 databases including Medline, Embase, and Cochrane. A quality assessment of the full-text publications was performed using the validated Quality of Health Economic Studies (QHES) instrument. Results: In the majority of the included studies, the pharmacogenetic test-guided therapy represents a cost-effective/cost-saving treatment option. Only seven studies lacked a clear statement of CE or cost-savings, because of uncertainty, restriction to specific patient populations, or assumptions for comparative therapy. Moreover, the high quality of the available evidence was evaluated. Conclusion: Pharmacogenetic testing constitutes an opportunity to improve the CE of pharmacotherapy. The CE of targeted therapies depends on various factors including costs, prevalence of biomarkers, and test sensitivity and specificity. To guarantee the CE comparability of stratified drug therapies, national and international standards for evaluation studies should be defined. © 2016, The Author(s).