Response rules are increasingly used by the Pharmaceuticals Benefits Scheme (PBS) in Australia and the National Institute of Clinical Excellence (NICE) in the U.K. to limit continued subsidy of very expensive drugs to patients who demonstrate an 'adequate' response. By targeting therapy to patients who appear to benefit most, policy makers aim to increase the cost-effectiveness of therapy. However, the value of response rules in fulfilling this aim is unproven. We present a four-item checklist that may be used to help decision makers identify when a response rule is appropriate. As an example, we apply our checklist to the response rules used for tumour necrosis factor (TNF) inhibitors in rheumatoid arthritis. On the basis of the checklist we find that the response rules in both countries are inadequate and may cause therapy to be inappropriately ceased in some and continued in others. Careful assessment is needed before decision makers adopt a response rule as a way of increasing the cost effectiveness of therapy.