OBJECTIVES: The purpose of this study was to analyse the disease-related costs as well as the side effect hand-foot syndrome (HFS) in oncologic patients receiving capecitabine. HFS is a dose and therapy limiting toxicity which is classified into severity grades 1 to 3. METHODS: Between April 2006 and August 2007 an observational study was conducted in Bonn, Germany on two oncologic outpatient wards and three oncologic practices. Breast and colorectal cancer patients starting oral chemotherapy with capecitabine were included and followed for six months. They rated their HFS at the end of each capecitabine cycle. The HFS grades were transformed into utility weights obtained from an earlier study in our group. From the perspective of the German statutory health insurance the direct disease-related costs (outpatient costs for pharmacotherapy, oncologist visits, diagnostics and inpatient costs) were assessed in a microcosting approach and referred to 2008. RESULTS: Thirty patients (16 breast, 14 colorectal cancer) were included. Their mean HFS severity grade was 1.1 (SD 0.7, median 1.0, range 0 to 2.75) corresponding to a mean utility weight of 0.88 (SD 0.14, median 0.92, range 1.00 to 0.44). Seven patients showed a HFS grade 3 (utility weight: 0.34) at least in one capecitabine cycle. On average €18,305 (80.4% outpatient, 19.6% inpatient) were calculated per breast cancer patient and €25,863 (71.2% outpatient, 28.8% inpatient) per colorectal cancer patient. Concerning the outpatient treatment, costs for pharmacotherapy represented the highest matter of expense (96.0% breast, 95.0% colorectal cancer). CONCLUSIONS: In most patients HFS occurred in moderate severity. Nevertheless, 7 patients experienced HFS grade 3 affecting quality of life. Strategies to prevent this toxicity need to be developed. Especially costs for pharmacotherapy represent a cost-driving factor in this patient group indicating a need for strategies to optimize cost structure while containing or improving quality of treatment.