OBJECTIVES: Nonsteroidal anti-inflammatory drugs (NSAID) are frequently used in Czech Republic for pain symptoms associated with osteoarthritis (OA). The annual consumption of NSAID reaches almost 1 billion CZK (36 million €). Non-selective cyclooxygenase (COX) inhibitors (e.g. diclofenac, ibuprofen) are mostly prescribed but often cause gastrointestinal side effects, including life threatening ulceration, perforation or bleeding (PUB). We assessed direct healthcare costs of meloxicam (preferential COX-2 inhibitor, daily dose 7.5mg) versus piroxicam (20mg/day) and diclofenac (100mg/day) based on two large-scale clinical trials (MELISSA and SELECT). METHODS: A model based on both studies with meloxicam and published in literature was used. It included acquisition costs for medications and costs for management of adverse events (AE). To identify medical practice in AE management - especially PUB, a questionnaire was prepared to collect data from gastroenterology departments. Eight departments were involved in a retrospective data acquisition; these data were translated into weighted average costs of particular AE treatments. The 2006 prices were used to assess direct medical costs. RESULTS: Among most costly AEs were gastrointestinal ulceration - mean costs per patient 160€ (118-225€), bleeding and penetration of ulcer - 934€ (281-1362€) and ulcer perforation 2342€ (1542-3011€). If gastrointestinal complications of diverse severity were taken into account, mean costs (per patient treated for 28 days) for piroxicam were 10.4€, for diclofenac 10.6€ and meloxicam 7.8€. Costs for AE management represented 70-80 % of these costs in non-selective drugs and almost 60 % of meloxicam total costs. CONCLUSION: Management of gastrointestinal AEs generates a significant cost driver of total treatment costs in NSAID users. The higher incidence of severe complications with non-selective NSAID resulted, despite of a lower acquisition price, in higher costs of those medications compared to meloxicam.