OBJECTIVES: To summarise the existing evidence on the cost of primary insomnia in persons aged 55 and above in Sweden and to generate an estimate of its total societal cost based on national statistics and other public sources. METHODS: We performed a top-down cost of illness analysis based on the Living Conditions Survey and national registry data from the Swedish Social Insurance Board (Forsakringskassan), the National Board of Health and Welfare (Socialstyrelsen) and the national pharmacy (Apoteket AB). Costs were calculated from a societal perspective by multiplying quantities of resources used with unit costs (presented in Euros 2007). RESULTS: In Sweden, about 326,100 patients over 54 years suffer from acute insomnia (DSM-IV 307.42), a prevalence of about 12% in this age group. The associated costs exceed €151 million per year. About 44% are direct costs (outpatient care €40.4m, drugs €22.5m, diagnostic examinations €0.48m, specialist visits €0.47m and inpatient care €0.22m) and 56% indirect costs (presenteeism €78.5m, absenteeism € 6.6m and occupational and domestic accidents related to daytime dysfunction caused by poor sleep and current treatment €0.91m and €0.57m, respectively). Other relevant cost items that were not incorporated in this estimate, due to the high degree of uncertainty, include: cognitive behavioural treatment, productivity losses due to early retirement, medical costs due to co-morbidities aggravated by insomnia, side-effects of current treatment (incl. increased risk of traffic accidents, tolerance, dependence and withdrawal symptoms), and quality of life losses. CONCLUSIONS: Our results confirm that insomnia presents a substantial clinical and economic burden. The annual cost per patient (€463) is consistent with estimates for e.g. Germany, France and the US. As a large share of the costs fall outside the health care system, a societal perspective is important when evaluating treatments of insomnia.