OBJECTIVES: Chronic obstructive pulmonary disease (COPD) is a major cause of morbidity and mortality in Western society and its importance is increasing. The long term cost of COPD is currently unknown. The aim of this study was to estimate the incidence based longitudinal cost of COPD for the UK, from the payer’s perspective. METHODS: We examined 160 clinical and epidemiological papers and combined selected data in a Markov model, with a time horizon of 20 years (40 stages of 6 months), and consisting of 29 exclusive health states, primarily based on the evolution of forced expiratory volume in 1 second (FEV1), and history of hospitalisation. Only sources that defined COPD in line with current clinical guidelines were applied. Medical management was obtained from database information (East of London database) and 23 physician interviews. Health state scores were obtained from a published cross-sectional survey. Unit costs were obtained from official sources. Costs are discounted at 6%. Uncertainty was estimated through Monte Carlo analysis (1,000 runs). RESULTS: The predicted 20 year cost for a patient starting in a mild state (FEV1: 60-80%) or a moderate state (FEV1: 40-59%) is £4,053 (95% CI = £3,743 –£4,363) and £11,746 (95% CI = £11,001 – £12,491) respectively. The cumulative number of Health State Adjusted Life Years is respectively 12.10 years (95% CI = 11.72 – 12.48) and 7.82 years (95% CI = 7.51 – 8.13) over 20 years. CONCLUSIONS: Life expectancy is low, and the costs for patients starting in mild and moderate states are rather modest, a finding that supports early diagnosis and intervention. The model may serve as a framework to assess the health economic impact of current strategies and new treatment modalities for managing COPD.