OBJECTIVES: Asthma is a priority medical condition, with worldwide prevalence increasing by 30% in the last 20 years. As such, it is important to understand the medical care resources utilized in its treatment. The objectives of this study were to determine the direct costs of asthma in the United States population and to stratify those costs by type of medical care. METHODS: Retrospective analysis was conducted of the 1999 portion of the Medical Expenditure Panel Survey. The survey provided data from a nationally representative sample of 24,618 respondents and from respondents’ medical care and health insurance providers. Data utilized in this study included medical conditions and use and payments for medical care. Asthma patients were identified using ICD-9-CM codes and direct costs were calculated using patient and third party payments for asthma-related medical events by type of medical care. Sample estimates were weighted and projected to the population and 95% confidence limits were calculated using the Taylor expansion method. RESULTS: Direct costs per asthma patient were $672. Total direct costs of asthma were $7,770,431,849. The highest proportion of these costs was for prescription medications, at $2,838,086,732 (mean=$42; 95% C.L.=$39-$44). Inpatient stays were $1,996,490,337 (mean=$3845; 95% C.L.=$3600-$4089) and office-based medical provider visits were $1,228,222,996 (mean=$66; 95% C.L.=$60-$72). Lower proportions of total direct costs were incurred for home health care, at $1.1 billion, emergency department visits, at $401 million, and outpatient services, at $117 million. CONCLUSIONS: Total direct costs of asthma were substantial, estimated at almost $8 billion. Prescription medications accounted for more than one-third of this cost. Nevertheless, guidelines for the appropriate management of asthma with drug therapy should be emphasized and further developed as an means of not only controlling drug costs but also preventing greater adverse clinical and economic consequences, such as avoidable medical provider visits and inpatient stays. Healthcare Policy Studies