OBJECTIVES: Insulin degludec (IDeg) is a basal insulin with an ultra-long duration of action for the management of patients with type 1 (T1DM) and patients with type 2 (T2DM) diabetes. IDeg has demonstrated effective blood glucose control with less hypoglycaemic events and with an option for flexibility in dose time compared to insulin glargine (IGlar). The aim of this analysis was to evaluate the cost-effectiveness of IDeg versus IGlar in adults with T1DM in the UK. METHODS: Meta-analysis data from two phase III clinical studies were used to populate a simple, transparent short-term model. The analysis was conducted from the UK National Health Service perspective and costs and benefits were calculated over a 12-month period. Sensitivity analyses were conducted to assess the degree of uncertainty around the results. In order to test the robustness of the results, two versions of the model were used. One applied disutilities derived from the SF-36 questionnaire used in the clinical trials, the other applied disutilities associated with the occurrence of hypoglycaemic events. In both approaches an additional utility gain was attributed to the benefit of dosing flexibility. Baseline incidence of hypoglycaemia was taken from a real-life study from the UK. Resource use associated with hypoglycaemia was documented in the clinical trials. Published tariffs were used as unit costs.   RESULTS: The base-case ICERs were £12,637/QALY and £13,349/QALY in the two modelling approaches, which are below commonly accepted thresholds for cost-effectiveness. The results were robust and largely insensitive to changes in input parameters. CONCLUSIONS: This short-term modelling approach allows the economic evaluation of newer insulin analogues when advanced long-term modelling based on HbA1c differences is inappropriate due to the treat-to-target nature of the clinical trials resulting in equivalent HbA1c levels. For patients in the UK with T1DM IDeg is a cost-effective treatment option compared with IGlar.