OBJECTIVES: Costs for medication are beside productivity loss most relevant for patients with chronic lung disease like asthma and COLD. In Germany hospital prices for pharmaceuticals are not fixed by the government and not accessible through administrative data. Official sales-prices (Rote Liste) do not represent opportunity costs. METHODS: To improve the evaluation of medication costs we calculated the resources used by measuring the units of 100 fully hospitalized patients of a rehabilitation clinic for chronic lung diseases and validated with unit prices from Rote Liste. These costs were compared with average expenses for medication per day according to the clinic's routine calculation. To assess medication costs in an outpatient setting we used a cost diary, where patients note all health care resource uses, and a standardized retrospective questionnaire. RESULTS: Medication costs in inpatient rehabilitation setting were 11,4 DM per day (SD 5,0) validated by Rote Liste. Actual average expenses for the clinic were 2,8 DM (Rate: 1:4). Medication costs in outpatient setting were 260 DM per month according to the cost diary (n=28) and 270 DM using the questionnaire (n=41). Dropouts were remarkably higher using the diary (44%), compared to the questionnaire (18%). CONCLUSIONS: Investigators should be aware of the fact, that the difference between medication costs validated by sales prices and hospital expenses can be crucial for the result of an economic evaluation especially for chronic diseases with mainly pharmaceutical therapy. In an acute hospital setting this difference might even be higher, further research is necessary. To assess medication costs in an outpatient setting a retrospective questionnaire seems to be the most reliable and practicable way.