OBJECTIVES: Although it is well recognized, in both clinical research and actual practice, that non-compliance with osteoporosis treatment is a problem, its economic implications have not been well documented. The objective of this study was to quantify the implications of non-compliance in terms of all-cause hospitalizations and total costs. METHODS: Demographic, prescription drug use, physician services and hospitalization information for women with osteoporosis who were dispensed an osteoporosis medication between 1996 and 2001 was obtained from the Saskatchewan Health data files. Subjects were considered to be compliant over a given period of time if they had medication available during 80% or more of that time interval. Hospitalization rates and total costs in various patient groups were compared using descriptive analyses. The impact of compliance was assessed further using regression analysis on the logarithmically transformed total cost, controlling for prior history of hospitalizations (which was considered a proxy for morbidity). RESULTS: A total of 11,249 women suffering from osteoporosis were identified with an average follow-up of 2.3 years. More than half (50.6%) did not have medication available to cover at least 80% of the time they were followed and were thus considered non-compliant. Overall, 48.5% of patients were hospitalized an average of 2.7 times during follow-up. Non-compliant patients were significantly more likely to be hospitalized (54.3%) than compliant patients (42.6%) (P<0.0001). The total monthly cost - including both hospitalization and physician service costs - was significantly higher for non-compliant ($245 CAD) than for compliant ($214 CAD) patients (P<0.05). The same trend was observed for both cost components individually. The effect of compliance on total cost was maintained after controlling for hospitalization history. CONCLUSION: The desired goal of keeping patients with osteoporosis on chronic treatment is not achieved adequately in actual practice and the cost implications of this behavior are substantial.