OBJECTIVES: To estimate the long-term cost-effectiveness of adding twice-daily exenatide (BID) to basal insulin in patients with type 2 diabetes from the perspective of NHS Scotland. Data from GWCO, a phase III, double-blind, randomized, placebo-controlled trial, comparing the efficacy of adding exenatide BID to titrated insulin glargine versus titrated insulin glargine alone, was used for the modelling analysis. After 30 weeks, exenatide BID added to glargine was associated with greater mean HbA1c reduction (-1.71% vs. -1.00%, p<0.001) and weight reduction (-1.78 kg vs. +0.96 kg, p<0.001) compared to glargine alone.  METHODS: A previously published and validated diabetes model (IMS CORE Diabetes Model) was used to project 20-year clinical and cost outcomes based on the GWCO cohort (age 59 years, diabetes duration 12.3 years, HbA1c 8.41%) and efficacy and safety outcomes from the GWCO trial. Costs were derived from published sources and expressed in 2011 Pounds Sterling (£). An annual discount rate of 3.5% was applied to future costs and clinical benefits. RESULTS: In the base-case analysis exenatide BID plus glargine was projected to improve quality-adjusted life expectancy by 0.183 quality-adjusted life years (QALYs) and life expectancy by 0.147 years compared to glargine alone, at an additional cost of £1,721. The resulting cost per QALY was £9,411. Increased pharmacy costs were partially offset by reduced costs associated with diabetes complications with exenatide BID. Assuming a willingness-to-pay of £20,000 per QALY gained, exenatide BID had a 99.8% probability of being cost-effective. Sensitivity analyses showed that results were robust to variation in range of model parameters. CONCLUSIONS: Based on results from GWCO clinical trial, exenatide BID plus glargine is projected to be a cost-effective use of NHS Scotland resources compared to glargine alone.