OBJECTIVE: To estimate the costs of glucocorticoid associated adverse events (GAEs) in patients with rheumatoid arthritis (RA). METHODS: We conducted a literature review of studies reporting GAEs in RA patients, and developed a Markov model with the following GAEs: fractures (vertebral, hip, pelvic), hypertension, diabetes, gastrointestinal complications, pneumonia, urinary tract infection, cataract and, in an extended model, myocardial infarction (MI) and stroke. Two-year total costs were calculated using direct medical costs (2001 US dollars [USD]) and by running 10,000 Monte Carlo simulations with probability values randomly selected from the GAE literature. RESULTS: On average, glucocorticoid users spent USD 445 more than non-users, or USD 0.46 for each dollar spent on purchasing the drug. When adding MI and stroke, users spent on average USD 430 more than non-users, or USD 0.44 for each dollar spent on purchasing the drug; this incremental cost ranged from USD 193 to USD 682 if MI and stroke were excluded, respectively. In 70% of the simulations there were more deaths among users than among non-users, in both the model with and without MI and stroke. CONCLUSIONS: Although results varied depending on attributed GAEs, in general glucocorticoid users spent more than non-users on GAE treatment, and had higher mortality. Patients, providers and policy makers should consider these potential costs of GAEs when making treatment decisions.