OBJECTIVES: Insulin, often combined with metformin, is usually the last therapy option for patients with type 2 diabetes Mellitus (T2DM) who are uncontrolled on oral anti-diabetic drugs. Dutch guidelines recommend up-titration of insulin until patients maintain an HbA1c <7%, yet in practice many patients never reach this target. Clinical evidence shows that dapagliflozin – a highly selective sodium-glucose cotransporter 2 (SGLT2) inhibitor – meets a need for these patients, i.e. by reducing HbA1c and weight. We studied the cost-effectiveness of dapagliflozin added to insulin (versus not adding dapagliflozin) for patients with T2DM who have inadequate glycaemic control while on insulin. METHODS: We used the Cardiff Diabetes model to evaluate cost and effects of dapagliflozin added to insulin using direct comparative efficacy data from a randomized placebo-controlled trial (NCT00673231). In this trial up-titration of insulin was allowed in case of severe glycaemic imbalance. Risk factor progression and occurrence of future vascular events were estimated using the UKPDS 68 risk equations. Costs and utilities were derived from the literature. The analysis was conducted from a Dutch societal perspective using a lifetime horizon. RESULTS: The overall incidence of vascular complications was lower, and life expectancy was higher (19.43 LYs vs. 19.35 LYs) in those patients receiving dapagliflozin compared to patients not receiving dapagliflozin. Patients in the dapagliflozin arm obtained an incremental benefit of 0.42 QALYs. The lifetime incremental cost per patient in the dapagliflozin arm was € 2,293, resulting in an incremental cost-effectiveness ratio of €27,779 per LYG and an incremental cost-utility ratio of €5,502 per QALY gained. Sensitivity and scenario analyses showed that the results were robust to variation in modelling assumptions and input variables. CONCLUSIONS: This analysis shows that dapagliflozin increases the quality of life of T2DM patients compared to current practice (up-titration of insulin), and is cost-effective in a Dutch healthcare setting.