Objective: The RIZIV/INAMI, the Belgian third-party payer, aims to set reimbursement tariffs at a level that reflects costs of orthotic braces. In the absence of publicly disclosed information on the cost structure of braces, estimating production and distribution costs of braces is valuable to reimbursement agencies with a view to setting tariffs. The aim of this study is to calculate the cost of production and distribution of a prefabricated hard neck brace and a prefabricated hard knee brace, and to explore whether Belgian tariffs and actual retail prices correspond with estimated costs of these two braces. Methods: The cost model took into account manufacturing costs, general overhead, research and development, warehousing, profit and distribution margins. Data were gathered from manufacturers, a visit to a production site, desk research, a decomposition of finished products and interviews with stakeholders. The price year was 2007. Results: The cost model generated an estimated retail price of €55 or €113 for the neck brace depending on assumptions. The estimated retail price for the neck brace was lower than the reimbursement tariff of €194 and the actual retail price of €241. With respect to the knee brace, the estimated retail price of €331 or €523 was inferior to the tariff of €580 and the actual retail price of €948. Conclusion: Actual retail prices and reimbursement tariffs for two selected neck and knee braces substantially exceeded retail prices based on estimated production and distribution costs. Therefore, there seems to be scope for reducing reimbursement tariffs and containing public expenditure on orthotic braces.