In April 1977, the Health Economics Research Unit (HERU) was established in Aberdeen. It was the first research unit in the UK and Europe with a focus solely on health economics. The ‘core’ funding of HERU was from the Chief Scientist Office of the Scottish Home and Health Department (now the Scottish Executive Department of Health), and this remains the main source of funding for HERU more than 25 years after its inception. In the early 1970s, health economists at the University of York had begun to establish a critical mass for the emerging sub-discipline of health economics through the establishment of the Health Economists’ Study Group. Another key development in health economics occurred in 1974, when Gavin Mooney moved from the Department of Health and Social Security to the Department of Community Medicine at the University of Aberdeen for Scotland’s first formal health economics project. The collaboration between Gavin Mooney, Roy Weir and Elizabeth Russell led to the establishment of HERU in 1977. To mark the 25th anniversary of HERU, three events were held in May 2002. The first was a major policy conference held in Aberdeen, ‘What can health economics do for the NHS in Scotland?’ The Chief Scientist Office and the Scottish Economic Policy Network (‘Scotecon’) sponsored this conference, which celebrated the contribution of HERU to policy and decision-making in the NHS. Presentations by HERU staff on the contribution of health economics research in the areas of benefit assessment, labour markets and health technology assessment formed the main part of the day, which concluded with a panel discussion on future priorities for health economics research in Scotland. The second event was a dinner, hosted by HERU’s new Director Bob Elliott, where all current and ex-HERU staff (plus a few close associates) reflected on HERU’s achievements and toasted the future. The third event had an academic focus and was a workshop to discuss the first drafts of chapters for this book. This was ‘HESG’ style and so involved a number of discussants selected from ex-HERU staff. The workshop was a successful conclusion to the 25th anniversary celebrations.