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) and by running 10,000 Monte Carlo simulations with probability values randomly selected from the GAE literature. Results. On average, glucocorticoid users spent $445 more than non-users, or $0.46 for each dollar spent on purchasing the drug. When adding MI and stroke, users spent on average $430 more than non-users, or $0.44 for each dollar spent on purchasing the drug; this incremental cost ranged from $193 to $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. © The Author 2005. Published by Oxford University Press on behalf of the British Society for Rheumatology. All rights reserved.