OBJECTIVES: To estimate the economic and health consequences of the use of DPP4 plus metformin in the treatment of patients with type 2 diabetes in Mexico METHODS: A cost-effectiveness analysis was done using a discrete event model to simulate the behavior of a hypothetic population with 40 years follow-up, to evaluate the number of complications (ischemic heart disease, myocardial infarction, congestive heart failure, stroke, amputation, retinopathy and ESRD), their costs and quality-adjusted life years (QALY’s); and the expected cost with the use of metformin+DPP4 (MDPP4), metformin+sulfonylureas (MSU), metformin+thiazolidinediones (MTZ) and metformin (MF). The demographic and clinical background of the patients used in the model was obtained based on expert panel opinions (11 physicians). A systematic literature review was performed to get information on effectiveness (reduction in HbA1c level and related complications risk as reported in the UKPDS) and quality of life. Utilization of health care resources was collected from clinical files (n=182) at Hospital General Zona n° 8 of the Mexican Social Security Institute. Private costs of complication treatments were obtained from institutional sources applying a conversion ratio of 2.46 times as referred in the literature. Drug prices as based on private reference prices (fixed by the regulatory authorities). All costs are expressed in 2009 US$. Probabilistic sensitivity analysis was performed (1000 Monte Carlo iterations) and acceptability curves were constructed. Both cost and QALY’s were discounted at 5% RESULTS: The expected treatment cost and QALY’s for MF is $250,213.26 and 12.97 respectively; MSU $255,910.09 and 13.26; MTZ $255,177.26 and 13.27; MDPP4 $245,055.52 and 13.41. The probability of being cost-effective at a threshold of $30,621.30 (equivalent to 3 times the Mexican GDP per-capita) with MSU is 0.543 CI95%(0.512-0.574); MTZ 0.593 CI95%(0.563-0.623); and MDPP4 0.867 CI95%(0.846-0.888) CONCLUSIONS: The scheme based on metformin+DPP4 presents the best cost effectiveness ratio against metformin+sulfonylureas or metformin+thiazolidinediones.