OBJECTIVES: To investigate the cost and incidence of adverse gastrointestinal (GI) events caused by bisphosphonate therapy in Taiwan. METHODS: We conducted a retrospective cohort study based on the National Health Insurance Research database in Taiwan from 2005 to 2009. The inclusion criteria for the study cases were patients 1) who sought inpatient or outpatient care for gastrointestinal problems with ICD9-CM codes of GI-related diagnosis within 4 months after the initiation of filling bisphosphonate prescription (the index date) for bisphosphonate, and 2) who have no prior history of GI treatment 90 days before the index date. The costs and incidence associated with GI adverse events were assessed based upon survival analysis and generalized linear models. RESULTS: A total of 114,086 patients were included in this study. The GI incidence rate was lower in the group treated with risedronate (16%) than alendronate (25%). The average time of onset of GI event was longer after taking risedronate (1.6 months) than taking alendronate (1 month). The average direct medical cost associated with a GI event was $3147(USD) and $6235 (USD) in group treated with risedronate and alendronate, respectively. The distribution of costs of GI events was physician consultation fees (35%), examination fee (10%), drug costs including proton pump inhibitors (22%), H2-blocker (14%), cytoprotectants (7%) and other GI related costs (12%). CONCLUSIONS: Bisphosphonate treatment of osteoporosis may involve adverse GI events and their associated medical costs should be taken into account when evaluate cost-effectiveness of treatment for osteoporosis.