OBJECTIVE: More than 1.5 million fractures occur due to osteoporosis each year. This study examines the characteristics of osteoporosis patients who incur an osteoporosis-related fracture compared to osteoporosis patients who do not incur fracture and estimates the economic burden associated with the illness. METHODS: The study sample consisted of patients with an osteoporosis diagnosis (733.0x) between January 1, 1998 and December 31, 2000. Osteoporosis patients with both an osteoporosis diagnosis and a related fracture were classified as having severe osteoporosis, all other osteoporosis patients were classified as Non-Severe. Annual utilization and expenditures for the Severe cohort were compared to the Non-severe cohort, as well as to a group of patients without osteoporosis (Controls) matched 3:1 to the Severe osteoporosis cohort based on age, gender, region, health plan type, and length of enrollment. Patients with malignant neoplasm, carcinoma, or Paget's disease of bone were excluded from all groups. Exponential conditional mean models were used to compute regression-adjusted total expenditures across the groups and the differences in adjusted expenditures were used to generate the economic burden of illness estimates. RESULTS: Patients with Severe osteoporosis incurred twice the amount of overall health care expenditures in the study period compared to Non-Severe osteoporosis patients and nearly three times that of the control group. Approximately 25% of the overall health care expenditures for the severe group were osteoporosis-related expenditures, leading to the conclusion that comorbid conditions in patients with severe osteoporosis contribute significantly to overall health care costs. Some of these comorbidity-related costs are likely due to pain-related disorders, which occurred significantly more frequently than in the Non-Severe and Control cohorts. CONCLUSIONS: Osteoporosis-related expenditures, particularly those related to fracture, were substantial. However, non-osteoporosis-related expenditures to treat comorbid conditions constituted 75% of the overall health care costs incurred in the year after an osteoporosis-related fracture and warrant further investigation.