OBJECTIVES: To conduct a cost-consequence analysis evaluating the treatment cost difference between valdecoxib and diclofenac in rheumatoid arthritis (RA) treatment from the perspective of German Sickness funds. METHODS: Health care resource utilization data were prospectively collected in a double-blind randomized trial of oral valdecoxib 20 mg QD (n = 246) versus diclofenac 75 mg BID (n = 237) of adult patients with RA in 26 countries. The study demonstrated that valdecoxib has a superior GI safety profile and comparable efficacy to diclofenac. The Health care resource data were costed using published German sources. Information evaluated medications, hospitalizations, unscheduled consultations with Health care professionals and use of diagnostic and medical procedures. Pharmacy costs of valdecoxib and generic diclofenac were included. In-depth analyses were conducted to explore the cost-difference attributable to gastrointestinal (GI) serious adverse events (GI-SAEs). The results are presented in cost per patient during the study period and cost per patient per day of treatment in order to adjust for the lower withdrawal rates with valdecoxib. RESULTS: The fewer hospitalization days in valdecoxib patients translated into significantly lower hospitalization cost per patient for valdecoxib with a cost difference of €138.17 (95% confidence interval [CI]: €282.84, €10.58). The total Health care costs per patient over a 6-month period for valdecoxib (€659.45) compared to diclofenac (€549.31) showed a cost difference of €110.14 (95% CI: €70.33, €290.62). Accounting for the different withdrawal rates (patients stayed longer on valdecoxib), valdecoxib had a lower cost (€0.26) per treatment day (95% CI: €-3.23, €2.72). The cost difference associated with GI-SAEs per treatment day was lower for valdecoxib: €1.57 (95% CI; €3.90, €0.75). CONCLUSIONS: Valdecoxib relative to diclofenac has significantly lower hospitalization costs per patient, and the total costs for the two treatments are not significantly different, indicating that the superior safety benefits with valdecoxib might be achieved without an increase in total treatment costs.