OBJECTIVES: Estimating the cost of a disease for Europe is a methodological challenge due to differences in epidemiology, treatment patterns, prices and data availability. This study aims at developing a model to overcome these challenges and to combine epidemiology and economic data to estimate the cost of MS in Europe. METHODS: A model was developed, based on the prevalence of the disease and the cost per patient for different degrees of severity of disease, with the following purposes: 1) transform and convert available economic data to a defined time period as well as currency; 2) adjust country specific economic data for purchasing power and relative size of economy; 3) impute data for countries where no data are available; and 4) combine epidemiology and economic data to estimate the total cost of a defined disease. The model was populated with European published data on multiple sclerosis. National and international statistics for the model were retrieved from the OECD and Eurostat databases. The estimates were presented in Euro for 2003. RESULTS: The estimated cost for MS in Europe is 10.7€ billion. Mild patients with MS accounted for 53% of the total cost, moderate 25% and severe patients for 22%. The high income countries accounted for 77% of the total cost and the countries with high prevalence in MS constituted 80% of the total cost. The model estimates for drug costs were validated against other data on total costs for MS drugs in Europe. CONCLUSIONS: The model provides a novel approach to estimating the cost of illness of a disease in Europe, as illustrated with the example of MS.