The cost burden associated with chronic bronchitis and emphysema, collectively known as chronic obstructive pulmonary disease (COPD), is large. The disease impacts not only on patients but caregivers and society as well. An estimated 16 million people in the US are currently diagnosed with COPD, the majority having chronic bronchitis. Mortality associated with this disease is on the upswing, as is its prevalence in the female population and the elderly. It is currently the fourth most common cause of death both in the US and worldwide. To date, the only proven cost-effective therapies for the disease are the cessation or prevention of smoking, which is the single most common cause of COPD, and vaccination to prevent influenza and pneumococcal infection. Hospitalisation and associated costs represent the greatest healthcare expenditures for people with the disease. Long-term oxygen therapy is also among the most costly interventions in terms of total money spent on direct medical costs for COPD treatment, although it is probably cost-effective because of its positive impact on rates of mortality. In fact, oxygen therapy is the only intervention to date that has been shown to decrease death rates due to COPD. Appropriate treatment with medication has the potential to decrease resource utilisation but does not appear to affect death rates. Similarly, pulmonary rehabilitation programs appear to benefit patients in terms of quality of life; however, long-term cost-effectiveness and effects on mortality have yet to be elucidated. Indirect costs also contribute a substantial part of the economic burden of the disease but are significantly harder to quantify.