We constructed a UK-based decision model of palliative care for terminally ill cancer patients who were switched from a weak to a strong opioid so that the expected direct healthcare costs in the UK could be estimated from the time a patient commenced a strong opioid until death. Decision analysis techniques were used to estimate the expected total direct healthcare cost per patient, stratified according to the first choice of strong opioid. The model was based on prescription data on 1975 terminally ill cancer patients who were on the Intercontinental Medical Statistics database, Mediplus (IMS Ltd, Middlesex, England). Resource-use data were obtained from published literature, a Delphi Panel and an advisory panel with expertise in palliative care. The expected cost of managing terminally ill cancer patients after they switched from a weak to a strong opioid ranged from 2391 pounds sterling (Pounds) to 3701 Pounds at 1995/1996 prices, depending primarily on the patient's duration of survival. Sensitivity analyses showed that the cost could be as low as 1500 Pounds or as high as 6000 Pounds, depending on resource use (at 1995/1996 prices). The key cost drivers were: hospice care, hospitalisation, general practitioner (GP) consultations and specialist nurse visits. In contrast, neither the choice of opioid nor managing constipation impacted substantially on the expected cost. Approximately two-thirds of the expected total cost was incurred by the UK National Health Service (NHS), with the remainder incurred by voluntary and charitable sectors. Hospice care and hospitalisation collectively accounted for between 50 and 80% of the expected costs. Management of patients in the community by the primary healthcare team accounted for between 10 and 40% of the costs. The acquisition cost of opioids accounted for between 2 and 8% of the expected cost and discounting the cost of these drugs sold to hospitals did not impact substantially on the total expected costs. The use of other resources such as antiemetics, NSAIDS, antidepressants and gastrointestinal drugs accounted for up to 3% of the expected cost. The expected cost of palliative care in the UK healthcare setting ranged from approximately 2500 Pounds to 4000 Pounds (1500 Pounds to 6000 Pounds in the sensitivity analysis) depending on the length of survival after patients switch from weak to strong opioids. Since opioids account for only 2 to 8% of expected costs, factors other than economic issues, such as tolerability profile, patient preference and convenience of use, should form the basis of clinical decision-making between opioids with similar analgesic efficacy.