OBJECTIVES: A recently published health technology appraisal (NICE guidance 57) on continuous subcutaneous insulin infusion (CSII) therapy considered observational studies to complement RCTs in the assessment of effectiveness of CSII in type 1 diabetes patients. Observational studies showed significantly higher improvements in HbA1c levels with CSII compared to multiple daily injections (MDI) as available RCTs did. Furthermore, a statistically significant decrease of severe hypoglycaemic episodes has been stated. Our model based analysis assessed the clinical and economical impact in Germany. METHODS: The following baseline assumptions were applied within our validated type 1 diabetes model: (1) patient characteristics at simulation start (age 26 years, duration of diabetes 12 years, baseline HbA1c 8.7%,); (2) a HbA1c improvement by CSII compared to MDI of 0.6% (RCTs) and 1.2% (observational); (3) reduction of severe hypoglycemic events by 50%; (4) costs for insulin pumps €3,680 during an amortization period of 4 years; (5) annual costs for infusion sets €1,040. RESULTS: With CSII total life time costs per patient increased by €50,967 / €36,873 with an HbA1c reduction of 0.6% / 1.2%. Life expectancy increased by 0.99 / 2.00 years, respectively. In consequence RCTs yield to an incremental cost-effectiveness ratio (ICER) of €51,736 and observational studies to €18,359 per life year gained. Life time cumulated costs for nephropathy and amputation with CSII compared to MDI decreased by €10,787 / €22,967 and €1,183 / €2,462, respectively. CONCLUSIONS: The NICE appraisal judged observational data in CSII as better resembling the population in routine care. Data derived from observational studies indicate that HbA1c-reductions can be distinctly higher than described in RCTs. In consequence the ICER could improve considerably. In the underlying analysis the additional costs for insulin pump and consumables are partially compensated by the reduced complication-related costs due to the improved glycemic control in CSII therapy.