Osteoarthritis (OA) has an high prevalence rate in Italy. Traditional NSAIDs, the commonest symptomatic OA treatment, cause gastrointestinal (GI) side effects, varying from milder symptoms of GI intolerance to life-threatening GI perforation obstruction and bleeding (POB). Celecoxib has demonstrated a much better GI safety profile than NSAIDs, but it is more expensive. OBJECTIVES: To estimate the cost from the Italian national health service (INHS) perspective of a 12-week cycle of therapy in OA patients with celecoxib or NSAIDs. METHODS: A decision-tree was used to estimate over 12 weeks the costs of two alternative therapies: celecoxib 200 mg/day (€1.38/day) and NSAIDs (€ 0.41/day) whose cost was calculated as the mean of the first ten prescribed NSAIDs in Italy in year 2000, at the mean dosage. The time frame was chosen as the most representative of the Italian physicians prescription habits. Probabilities of side effects, derived from clinical trials, were: Celecoxib, GI intolerance 0.078, Anemia 0.0015, Ulcer 0.0085, POB 0.001; NSAIDs, GI intolerance 0.12, Anemia 0.0055, Ulcer 0.0315, POB 0.008. Probabilities of hospitalization, derived from Italian literature, were: GI intolerance, 0; Anemia, 0.2, Ulcer 0.3, POB, 1. Cost to treat the events were estimated using the INHS tariffs and DRGs and were: GI intolerance, € 138; Anemia without hospitalization, € 432; anemia with hospitalization, € 3,908; Ulcer without hospitalization, € 491, Ulcer with hospitalization, € 2,530; POB, € 10,809.34. RESULTS: The costs of the alternative therapies were € 148.56 for celecoxib 200 mg/day and € 178.41 for NSAIDs. CONCLUSIONS. Celecoxib is more expensive than the commonest prescribed NSAIDs in Italy; nevertheless, NSAIDs GI side effect have high prevalence and resource consumption, included a high rate of hospitalization, and a related considerable cost load for INHS . Therefore, the correct prescription of celecoxib may result in global cost-savings for the payer.