OBJECTIVES: To retrospectively evaluate 1-year direct health care cost (antidepressants, hospital stays, rehabilitation) of patients with depression based on claims data. METHODS: Billing data of a German sickness fund with 4.7 million life years insured were used for the period from 2001 to 2003. Beneficiaries were included, if they were covered at least three months by the health insurance and had either an inpatient or sick leave diagnosis of depression (ICD 10: F32, F33) or at least two prescriptions of an antidepressant (ATC: N06A*) during this period. For each patient direct health care cost was derived from the database for the individual observation period and standardized subsequently to obtain 1-year cost. RESULTS: Out of 1.54 million beneficiaries n = 75.078 fulfilled the inclusion criteria (mean age: 48 ± 15 years; 57 % female). Total 1-year cost of illness amounted to €363 per patient (SD: €1584) as actuarial data. The median reimbursed cost of treating depression accounted for €31, the maximum was €57,404 p.a. per patient, representing that the majority of the patients caused relatively low expenditures and only a small group generated high health care cost. Stratification of total cost shows that inpatient care due to depression caused higher average cost per patient and year (212 ± €1,479) than antidepressant therapy administered by office-based physicians (93 ± €177) or rehabilitation (54 ± €389). CONCLUSION: The study confirms that hospitalization is the main cost driver of depression. This is in line with current literature. There is also evidence that adequate antidepressant treatment prevents from hospital stays. Though, the findings reveal a distinct imbalance between inpatient and outpatient cost, especially for antidepressant pharmacotherapy. Keeping patients in an ambulatory care setting, supported by an optimized pharmacotherapy, might contribute to reduced overall health care spending per patient.