BACKGROUND Narcolepsy is a chronic neurodegenerative disorder with a typical onset in childhood or early adulthood. Narcolepsy may have serious negative effects on health-, social-, education-, and work-related issues for people with narcolepsy and for their families. The disease may, thus, present a significant socioeconomic burden, but no studies to date have addressed the indirect and direct costs of narcolepsy. METHODS Using records from the Danish National Patient Registry (1998-2005), we identified 459 Danish patients with the diagnosis of narcolepsy. Using a ratio of 1 patient record to 4 control subjects' records, we then compared the information of patients with narcolepsy with that of 1836 records from age- and sex-matched, randomly chosen citizens in the Danish Civil Registration System Statistics. We calculated the annual direct and indirect health costs, including labor supply and social transfer payments (which include income derived from state coffers, such as subsistence allowances, pensions, social security, social assistance, public personal support for education, etc.). Direct costs included frequencies and costs of hospitalizations and weighted outpatient use, according to diagnosis-related groups, and specific outpatient costs based on data from The Danish Ministry of Health. The use of and costs of drugs were based on data from the Danish Medicines Agency. The frequencies and costs from primary sectors were based on data from The National Health Security. Indirect costs were based on income data derived from data from the Coherent Social Statistics. RESULTS Patients with narcolepsy had significantly higher rates of health-related contact and medication use and higher expenses, as compared with control subjects. They also had higher unemployment rates. The income level of patients with narcolepsy who were employed was lower than that of employed control subjects. The annual total direct and indirect costs were euro 11,654 (euro = Eurodollars) for patients with narcolepsy and euro 1430 for control subjects (p < 0.001), corresponding to an annual mean excess health-related cost of euro 10,223 for each patient with narcolepsy. In addition, the patients with narcolepsy received an annual social transfer income of euro 2588. CONCLUSIONS The study confirms that narcolepsy has major socioeconomic consequences for the individual patient and for society. Early diagnosis and treatment could potentially reduce disease burden, which would have a significant socioeconomic impact.