Atopic dermatitis (AD) is a common chronic dermatological disease affecting mainly young children. According to epidemiological studies, its prevalence has increased notably over the last two decades. OBJECTIVE: To assess the economic burden of AD in Germany. METHODS: We adopted a prevalence approach to evaluate the societal cost of AD comprising direct medical costs, indirect costs, and out-of-pocket expenses. Not included in this evaluation is the impact of AD on the patient and the family in terms of an impaired quality of life. Data were collected from various sources: health statistics; labor statistics; literature; surveys, and an expert panel of six dermatology specialists). All costs were adjusted to the year 1999. In order to explore the findings in light of data variations, sensitivity analyses were performed. RESULTS: Based on an estimated base case population of 2.45 million people suffering from AD, total annual societal costs amount to DEM 1.32 billion (EUR 678 million). Of these overall costs, DEM 636 million (48%) are attributable to direct costs, DEM 428 million (32%) to productivity losses (including time expenditures of parents caring for their sick children), and DEM 257 million (20%) to out-of-pocket expenses. The most important individual cost contributor is outpatient physician care (28%), followed by time expenditure of parents (20%), and out-of-pocket expenses (19%). Drug treatment accounts for less than 10% of the overall costs. The average per-patient societal cost of AD is around DEM 540 per year. Sensitivity analysis showed a maximum variation in yearly costs ranging between DEM 1.08 billion and DEM 1.61 billion when both prevalence and utilization estimates are varied. CONCLUSIONS: The chronic nature of AD coupled with its high frequency represents a significant economic burden to society in Germany. Based on these findings it can be concluded that AD cannot be regarded as minor illness.