OBJECTIVES: Diabetes mellitus is responsible for a huge burden of disease. Our objective was to estimate the direct health care costs of patients with diabetes in Hungary. METHODS: Real world data was retreived from the National Health Insurance Fund database. Diabetic patients were defined as persons who filled in a prescription of oral antidiabetics (OAD) or insulin in Q3-Q4 2007. Study population was divided into two groups depending on whether they were hospitalised for major complications of diabetes in 2007-2008. Patients without hospitalisation were further divided into three subgroups according to the use of drugs (only OAD, only insulin, OAD and insulin). In all subgroups we estimated health care costs for each cost item by age group in the whole study group and among those who actually used a particular service. Additionally, we took samples of patients who were hospitalised for specific complications, and estimated health care costs for the first and second year after the occurrence of the complication. Hungarian Forint values were converted to Euros by employing the 2008 GDP specific PPP exchange rate (1€=157.64HUF) RESULTS: Mean health care cost of 521,545 diabetic patients was €2125 in 2008. It was €4016 for those with hospitalisation for complications, €1533 for OAD users without complications, and €2847 for insulin users without complications. Fifty-three percent of the total cost covered drug treatment and 27% acute hospital treatment; 26% of the total drug cost was spent on OADs and on insulin. CONCLUSIONS: Healthcare cost of diabetes is already high in Hungary, especially care for its complications. Public health care cost of diabetes exceeds 0.65% of GDP and 13% of total direct public health care expenditure. Considering the burden of disease that manifests in premature mortality, reduction in QoL, and high cost, and the epidemiological trends, diabetes mellitus should be a public health priority in Hungary.