OBJECTIVES: To assess the incidence, prevalence and cost implications of drug related problems in patients with chronic diseases dwelling in a local community METHODS: The present study was a prospective observational study conducted in a South Indian city residential area. Institutional ethics committee has approved the study. The research pharmacist recorded the details of patients with chronic diseases through house visits and reviewed the prescriptions of the enrolled patients for drug related problems with their consent. Cipolle’s classification was used to assess the type of DRPs. Prevalence, severity level and significance of DRP’s was also assessed and net societal cost burden due to the DRPs was also calculated.  RESULTS: During the six months study period, 480 houses were surveyed and identified 190 patients (Male: 80 and Female:110) with chronic diseases. A total of 80 DRPs were identified in the prescriptions with an incidence rate of 42%. Types of DRP were Medication errors/ non compliance (17), untreated indications (15) and Drug interactions (14) and ADRs (8) were the most commonly observed DRPs. As per the severity, 9 DRPs were major, 32 DRPs were moderate and 39 DRP were minor and clinically non significant. The net societal cost burden due to DRPs was calculated as Rs.72,04,000/-.  CONCLUSIONS: The study concludes that, incidence of DRPs in patients with chronic diseases is about 42% and the net societal cost burden due to DRPs was found Rs.72,04,000.00 .