Acute exacerbations of chronic obstructive pulmonary disease (COPD) impose a significant burden on society in terms of morbidity, mortality, reduced quality of life and healthcare expenditure. New generations of antibiotics are used to treat exacerbations, and other modes of delivery involving home support are being implemented. The optimal strategy to manage exacerbations on pharmacoeconomic grounds depends on issues such as diagnosis of an exacerbation and safety, effectiveness and costs of available alternatives. This review outlines the state of the art of pharmacoeconomic knowledge of the management of acute COPD exacerbations. It presents estimates of the level and distribution of costs associated with exacerbations and reports on the cost-effectiveness or cost-utility of antimicrobial therapy and other approaches to the management of exacerbations.