OBJECTIVES: Chronic Obstructive Pulmonary Disease (COPD) causes great disability, primarily among the elderly. A Dutch cost-of-illness study estimated the yearly cost of care for an average patient to be Fl 1800 in 1993. The purpose of this paper is to compute the lifetime cost of COPD and to evaluate the contribution of medication, hospital, and other types of care to this cost. METHODS: The average life expectancy of a new COPD patient was computed with a dynamic lifetable model for the Netherlands. The model accounts for competing death risks from other smoking-related diseases. Resource use and costs for three age groups and nine types of care came from large representative registries. Sensitivity analyses were performed a/o., for the cost of a day in hospital and for medication costs. RESULTS: Male COPD patients diagnosed at age 45 and 65 have a life expectancy that is almost six and more than two years less than the average life expectancy at these ages. Expected lifetime costs for CODP are between DFL 460.000 and 570.000 for men and women diagnosed at age 45. New patients at age 65 have lower costs: between DFL 81000 and 110 000 for men and DFL 102000 and 152 000 for women. A large decrease in life expectancy that differs for men and women explains the reduction. Lower boundaries use minimum estimates for the price of a hospital day and upper boundaries use high estimates. Hospital and medication costs together contribute to more than 80% of total lifetime cost. The contribution of medication costs to the expected lifetime cost decreases with age at diagnosis from 45% to 30%. CONCLUSION: The lifetime cost reflects the importance of hospital costs and medication costs to the total cost of COPD. It is known that the number of COPD patients will increase in the near future. The results of this work may help understand the increasing health-care needs of these patients.