OBJECTIVES: The growing prevalence of diabetes mellitus highlights the conflict between the burden of disease and sustainability of health care systems, especially in Central-Eastern European middle income countries. Open access health economic models that calculate the effects of health policy programs and public interventions can improve the appropriateness of decisions. Our objective was to develop a long term economic model for type 2 diabetes and make it available for public sector decision-makers to support evidence based health policy decisions. METHODS: The health economic model projects outcomes for selected patient populations, taking into account baseline patient characteristics, history of complications, changes in physiological parameters over time, diabetes treatment and management strategies, and screening programs. First section of the model examines secondary prevention strategies of type 2 diabetes in a decision tree structure. The second section simulates patients through interconnected Markov sub-models that replicate important complications of diabetes (ischemic heart disease, retinopathy, hypoglycaemia, nephropathy, neuropathy, foot ulcer, peripherial vascular disease, stroke and ketoacidosis). Treatment and management strategies are taken into account when modeling patient pathways. The model includes a wide range of economic and clinical input data to support adaptability, country- or provider-specific outcomes and the analysis of different policy and treatment strategies. RESULTS: In this paper we present the methodological approach, the model structure, main scientific evidences applied and the choice of policy or treatment strategies that can be examined. CONCLUSIONS: Evidence based health policy can be implemented only if decision-makers have the access to analytical tools to address different policy scenarios. It requires initial investment, which pays off in better decisions.