To assess the health care utilization and cost of illness for osteoarthritis (OA) patients taking pain medications. Specifically, the goals were to estimate the direct health care and indirect costs of OA. A claims database of privately insured patients was used to identify OA patients. Prescription drug pain treatments included tramadol, cyclooxygenase-II inhibitors, and nonsteroidal anti-inflammatory drugs. Mean annual per patient costs were calculated from an employer's perspective. OA patients were prescribed multiple drugs simultaneously and/or sequentially to manage pain. OA patients had a number of prevalent comorbid conditions. Average annual direct medical, drug, and indirect work loss costs were $8601, $2941, and $4603, respectively. There was a substantial payer burden associated with OA resulting from the drug, medical, and disability costs and OA-related comorbidities and high concomitant medication utilization.