Non-steroid anti-inflammatory drugs (NSAID) are widely used in Russia in all fields of medicine. At the same time they produce serious side effects such as gastric or duodenal ulcer and gastrointestinal bleeding, that may influence the cost of illness. OBJECTIVE: The study purpose was to conduct an economical analysis of two drug regimen for rheumatoid arthritis and osteoarthritis: regimen A (Meloxicam 7.5 mg/day) regimen B (Diclofenac 100 mg/day). METHODS: Decision-analysis was performed. Clinical efficacy and probability of side effects was taken from the multicentral clinical trials. Costs of baseline treatment and cost of treatment for side effects were analyzed. RESULTS. Clinical efficacy in both regimens was equal. Probability of side effects was 1.5 times higher in Diclofenac than Meloxicam (0.031 vs 0.019) according to the trials. Cost of standard treatment for side-effects was 6.8 USD for minor symptoms, 12.2 USD for ulcer at out-patient department, and 188.04 USD for ulcer at hospital. Such low costs are explained with low levels of prices for medical services in the system of medical insurance. Cost of period of treatment including treatment for side effects was 20.09 USD for Diclofenac and 15.42 USD for Meloxicam. CONCLUSIONS: Treatment with Meloxicam was cheaper than with Diclofenac, but the difference was mostly explained by the prices of drugs, because prices for medical services are very low in Russia. Presently in this country drug prices are most important, as they are determined by market while prices for medical services are regulated by state and are low because of limited resources.