The social, medical and economic effects of acute bacterial exacerbations of chronic bronchitis on individual patients and the resource implications of this disease for the healthcare sector are considerable. Optimizing the selection of patients who should receive antibiotics according to stringent clinical criteria is the first step in promoting good clinical practice and cost-effectiveness. Antibiotic efficacy is then the major driver of cost, especially when it reduces the need for hospitalization. Resistance to first-line antibiotics can be expected to increase the risk of treatment failure. Other drivers of cost include non-compliance, which predisposes to therapeutic failure, and the selection of resistant strains. Treatment regimens of short duration, once-daily dosing and good tolerability are determinants of good compliance and cost savings. The expenses of first-line antibiotics typically account for only a small proportion of the overall costs of healthcare and the cheapest antibiotics are not necessarily the most cost-effective. The clinical success rate of first-line therapy is the primary determinant of the overall expenditure on healthcare because of the high costs associated with treatment failure, especially if it leads to hospitalization. Factors such as poor patient compliance and high antibiotic resistance rates, which undermine the clinical efficacies of first-line therapy, will increase the overall costs of treatment.