Peptic ulcer disease (PUD) is a common medical problem costing billions of dollars annually around the world. Since the availability of the first histamine H2-receptor antagonist, cimetidine, many economic analyses have been conducted to compare the impact of this drug class on resource consumption. H2-Antagonists have been shown to reduce mortality, hospitalisations, ambulatory care visits and endoscopy use caused by PUD. Because of changing risk factors and variations in diagnosis, it remains controversial whether these drugs have had a long term impact on PUD incidence and prevalence. Three studies conducted after the introduction of cimetidine showed it to reduce total direct medical healthcare expenditures, despite increases in drug costs. Studies investigating the short term treatment of PUD show mixed results because of diverse study designs and different comparator drugs. No specific therapy appears consistently superior economically because of variations in population studies, ulcer relapse rates and drug acquisition costs. However, maintenance therapy for PUD has been shown to be cost-effective. When compared with surgery--an extremely efficacious option--maintenance therapy (both daily and intermittent) is cost-effective over at least a 10-year period. Within the maintenance therapy options, daily ranitidine has been shown to be more cost-effective than intermittent therapy for up to 2 years. Omeprazole is the least costly and most efficacious treatment for gastroesophageal reflux disease (GORD or GERD) compared with ranitidine and/or lifestyle modification alone. It has also been shown that the costs for empirical treatment of GORD are offset by the costs of additional investigation of those who do not have the disease. Thus the decision of whether to treat empirically should be based on physician and patient preferences, and not on costs. The use of misoprostol for ulcers caused by nonsteroidal anti-inflammatory drugs is somewhat controversial. Three studies examining the short term (3-month) costs of misoprostol generally show it to be cost saving or cost neutral. Misoprostol is consistently more cost beneficial in elderly or other high risk patients. Results are highly sensitive, however, to several parameters, such as patient type, ulcer severity and rate, drug costs and patient compliance. One study examining prophylaxis using misoprostol over 1 year showed it to be a generally expensive therapy for primary prevention, but was more cost effective for those with a proven GI bleed in the previous year.(ABSTRACT TRUNCATED AT 400 WORDS)