All major pharmaceutical companies are currently investing significantly in the development of medicines with a nanotechnology component. Such research promises therapeutic drugs with greater efficacy and a wider range of clinical indications. Nanomedicines are just beginning to enter drug regulatory processes, but within a few decades could comprise a dominant group within the class of innovative pharmaceuticals. The current thinking of government safety and cost-effectiveness regulators appears to be that these products give rise to few if any nano-specific issues. This article challenges that proposition and seeks to explore what features of nanomedicines may create unique or heightened policy challenges for government systems of cost-effectiveness regulation. The Australian Pharmaceutical Benefits Scheme (PBS) is a key exemplar of the latter type of regulation in that it links expert scientific evaluation of cost-effectiveness with the pricing of PBS-listed drugs. In the current global financial crisis such systems are likely to become increasingly attractive and how they handle the demands made upon them by nanomedicines (including by application of a variation of the precautionary principle) is likely to be of considerable interest to policy makers worldwide.