OBJECTIVES: This study compares the treatment patterns, medical characteristics, and average annual direct (i.e., medical and drug use) and indirect (i.e., work-loss) costs for employees with Cancer, Back/Neck Disorders, Arthritis, and Neuropathic Pain ("painful conditions") to those of employees from a random sample ("average employee") in 2000. METHODS: An employer administrative claims database (covering several managed care health plans and approximately 600,000 insured lives from 1998-2001) was used to identify patients with ICD-9 codes for painful conditions. Of these: 3277; 18,657; 22,313; and 4436 employees between the ages of 18 and 65 were identified as having Cancer, Back/Neck Disorders, Arthritis and Neuropathic Pain, respectively. Direct costs are total medical and drug costs paid by the employer, and indirect costs are payments by the employer during work-loss days. RESULTS: Painful conditions lead to significant employer costs. In particular, among employees with painful conditions, direct costs are 1.5 - 4.1 times as high as those of the average employee (i.e., $3961 - $11,089 compared to $2686) depending on the painful condition. Indirect costs account for up to 35 - 45 percent of total employer costs. Indirect costs are 1.5 - 2.7 times as high as those of the average employee (i.e., $3132 - $5870 compared to $2167) depending on the painful condition. Employees with cancer have the highest costs among patients with painful conditions. Drug costs account for approximately 20 percent of direct costs, with opioids accounting for less than one percent of overall direct costs. CONCLUSIONS: Painful conditions are costly to employers, with indirect costs accounting for up to 45 percent of overall costs. However, prescription opioids used to treat painful conditions account for a small fraction of the costs.