OBJECTIVE: The Global Initiative for Obstructive Lung Disease highlights the importance of chronic obstructive pulmonary disease (COPD). In Japan, there is a widespread belief that COPD risk, prevalence and burden of illness is lower than in Western cultures. The Nippon COPD Epidemiology Study shows the prevalence of COPD to be significantly higher than previously reported. We constructed a model to estimate the total direct and indirect costs of care for COPD in Japan and compared the resultant economic burden to that in the US. METHODS: Using a prevalence-based approach, a model was created to ascertain total direct and indirect costs of care for COPD in Japan. Direct costs included hospitalizations, outpatient visits, and home oxygen therapy. Indirect costs were limited to days absent from work. Data sources included a population-based epidemiology study, the peer-reviewed literature, and governmental and industrial surveys. RESULTS: In Japan, the estimated total cost of COPD is $8.5 billion/year ($6.8 billion in direct costs and $1.7 billion in indirect costs). For direct costs, inpatient care accounted for $2.6 billion; outpatient care, $3.2 billion; and home oxygen therapy $1.1 billion. The average annual total cost/patient across COPD patients of all severity is $1219; the total annual direct per patient cost is $976. This compares to $1554 and $900, respectively, across all US COPD patients using recent NHANES and NIH estimates. (¥118=$US1) CONCLUSION: COPD imposes a high economic burden on the Japanese health care system. Despite marked differences in patterns of care between the two countries, the per capita economic burden across all COPD patients is very similar in Japan and the US. Given the substantial economic burden, it is critical that the Japanese seek ways to effectively diagnose and manage this disease.