Economic evaluation of medical interventions has become an accepted, and often required, adjunct to the standard effectiveness and safety assessment in clinical research. However, the statistical analysis can be challenging due to censored cost data, as commonly obtained in medical studies. Over the past decade, important statistical issues that arise from censored cost data have been identified and a number of advances made to tackle them. In this article, we will describe these issues, including induced dependent censoring and limited identifiability with the cost distribution, and review recent statistical developments. Available methods address either time-restricted medical cost or lifetime medical cost jointly with survival time. Their applicability and limitation in various practical situations will be discussed.