Borrowing from
John Marley, Professor, Department of General Practice, University of Adelaide, Adelaide
Aust Prescr 2000;23:114-5
http://www.australianprescriber.com/magazine/23/6/114/5

Efficacy –  can a treatment work?
As in a clinical trial, i.e. in ideal circumstance of a controlled trial population.

Effectiveness – ‘the extent to which a drug achieves its intended effect in the usual clinical setting’

Effectiveness “can be evaluated through observational studies of real practice”; local and national databases can be used to evaluate effectiveness and study pharmacoepidemiology

Efficiency –  about “whether a drug is worth its cost to individuals or society. The most efficacious treatment, based on the best evidence, may not be the most cost-effective option. It may not be acceptable to patients.”

“Efficacy is not the same as effectiveness.
1 A treatment is effective if it works in real life in non-ideal circumstances. In real life, medications will be used in doses and frequencies never studied and in patient groups never assessed in the trials. […] It is an irony that drugs are licensed for use almost exclusively on the results of controlled trials, yet they are withdrawn from use because of observational data that would not be acceptable to licensing authorities. Biases are present in observational studies, just as they are in trials, but they can be defined and often controlled for, giving these studies a much greater value than that currently awarded to them. […]
There is no country, however wealthy, that can afford to deliver all the health care possible to the whole of its population at all times. Rationing may be implicit or explicit, but it will happen. Good effectiveness and efficiency studies will make this rationing more informed.”