Summary. The impact on the cost of care for haemophilia patients with inhibitors is not well defined. To quantify the effect on health care expenditures associated with inhibitors to factor VIII (FVIII) or FIX, we conducted a retrospective cohort study examining product use and outcomes in adult and paediatric haemophilia patients with and without inhibitors. Twelve patients with inhibitors to FVIII or FIX (cases) identified in the haemophilia surveillance system (HSS) at two centres were matched on age, severity of haemophilia, and treatment centre to haemophilia patients without inhibitors. Patients with HIV or significant liver disease were excluded from the study. All eligible non-inhibitor control patients were selected for inclusion in the study, resulting in a total of 28 controls. We then tracked product usage and hospitalizations from programme entry until 1998 or loss to follow-up, producing a total database of 184 person-years of experience. A descriptive matched analysis was conducted to examine annual differences in the cost of product used and hospitalizations. We found that the median cost for factor products among haemophilia patients with inhibitors was $55 853/year, $2760 less than comparable haemophilia patients without inhibitors. The median number of hospitalizations per year was 1.0 for both inhibitor and non-inhibitor patients and the median number of days hospitalized was virtually the same. Although these findings do not appear to support the belief that there is a substantial increase in the cost of care for haemophilia patients with inhibitors, it does document that a few outlier patients can drive the cost of treatment for this disease. As the largest component of the cost of care is that of factor concentrate, it becomes imperative in the current health care environment to better define the true costs and benefits of treatments designed to eradicate or manage inhibitors. A careful cost accounting of immune tolerance induction (ITI) and other therapeutic strategies, taking into account successes and failures and duration and intensity of therapy, should help to better define the costs and benefits of such approaches. Methods to identify high cost inhibitor patients should be developed so that these strategies may be targeted to appropriate candidates.