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The goals of this study were the assessment (1) of all costs of terminal care of patients with osteolytic bone disease and pain and (2) of the economic consequences of the pamidronate treatment as observed in a prospective clinical trial on the effectiveness of pamidronate. A total of 70 patients were recruited, who were all suffering from advanced tumour diseases (60% breast cancer, 21% multiple myeloma, and 19% other tumours). In a single-institution study the patients were randomly assigned to receive, in a double-blinded setting, pamidronate 60 mg i.v. or 90 mg i.v. every 3 weeks for a maximum of six cycles. Perception of pain intensity was recorded by self-assessment, using a linear analogue scale. Follow-up lasted 6 months after treatment. All elements of direct costs of in-patient and out-patient care were recorded in cooperation with the hospital administration and the health insurance companies [Krankenkassen]. Average monthly direct costs amounted to ECU 1,290 (+/-410) and 1,050 (+/- 430) during the treatment phase and follow-up, respectively. Average in-patient costs were about three times the out-patient costs. Significantly higher costs (by a factor of 2) were observed for terminal care in hospital (last 3 months before death) than for continued care (of patients surviving the study period). The treatment with pamidronate reduced pain significantly but did not add noticeably to the costs. The study showed that it is practicable and quite efficient to combine a pharmaco-economic evaluation with a clinical trial, although it may be difficult (depending on the setting and availability of information) to assess true costs, i.e. total resource usage.