OBJECTIVES: Persistent high blood pressure is one of the leading causes of microalbuminuria and progression of nephropathy in patients with type 2 diabetes. A large number of studies have shown effective reduction of microalbuminuria after antihypertensive therapy and reducing progression of nephropathy to end-stage renal disease (ESRD). In the AVOID study aliskiren once daily as an add-on therapy provide a significant additional reduction in proteinuria compared to losartan alone. The objective of this model was to evaluate a long-term cost-utility of the two strategies. METHODS: AVOID was a multinational, randomized, double-blind study to evaluate the possible renoprotective effect of aliskiren in the primary endpoint - the change in the urinary albumin to creatinine ratio (UACR) when added aliskiren to existing losartan and optimal antihypertensive therapy for six months in hypertensive patients with type 2 diabetes and nephropathy. However the duration of this study was short to evaluate the incidence of ESRD. The AVOID cost-effectiveness Markov model is designed to estimate progression to ESRD using the primary endpoint of AVOID - superior reduction in UACR for aliskiren versus placebo - and project associated local costs and clinical outcomes in Czech patients suffered by type 2 diabetes, hypertension and nephropathy. RESULTS: AVOID demonstrates that combination of aliskiren with losartan showed systematically improved effectiveness compared with losartan alone. Effectiveness was expressed as QALY gained throughout the model time horizon. The incremental cost-effectiveness (ICER) of the aliskiren treatment in the base case was below € 1027 per QALY gained and in the extended case improved with real-life cost of dialysis and renal transplantation on cost-saving therapeutical approach. CONCLUSIONS: Aliskiren once daily as add-on therapy to losartan is highly cost-effective option for hypertensive patients with type 2 diabetes and nephropathy.