Relatively little information is available in the literature concerning the cost of psoriasis in the United States, and much of that information is out of date. The present analyses estimate the direct cost of medical care for psoriasis (including psoriatic arthritis) from a societal perspective among adults in the United States. The costs of hospitalizations, outpatient and physician office visits, prescription and over-the-counter (OTC) medications, and medical procedures were estimated from the literature, analysis of publicly available health databases (Health and Nutrition Examination Survey, National Hospital Discharge Survey, Medicare Public Use Files, National Ambulatory Medical Care Survey, and the National Hospital Ambulatory Medical Care Survey), and analysis of privately available health databases (United Health Care/Diversified Pharmaceutical Services, the Medstat Group diagnosis-related group guide, and the National Disease and Therapeutic Index). Costs were expressed as of 1997 by using Medicare and health maintenance organization reimbursement rates and wholesale drug costs. Costs of OTC medications were derived by adjusting a previous estimate in the literature for inflation in over-the-counter drugs and population increases. The cost of illness for the approximately 1.4 million individuals with clinically significant disease is substantial-approximately $30.5 million for hospitalizations, $86.6 million for outpatient physician visits, $27.4 million for photochemotherapy, $147.9 million for dermatologic prescription drugs, and $357.2 million for OTC drugs, for a total direct cost of $649.6 million. Cost estimates from this study are substantially less than those found in previous studies ($1.09 billion and $4.32 billion after adjustment of estimates in the literature for medical inflation and population increases). This appears to be principally a result of decreases in hospitalization rates since 1979 and the valuation methodology per unit of medical services (with prior studies using "list" prices and the current study using reimbursement rates).