OBJECTIVES To explore the cost-effectiveness of dapagliflozin, the first-in-class sodium-glucose co-transporter-2 (SGLT-2) inhibitor, compared to the dipeptidyl peptidase-4 inhibitor (DPP4i) class, as monotherapy for the treatment of type 2 diabetes mellitus (T2DM) that is inadequately controlled by diet and exercise alone in patients who are intolerant to metformin. METHODS The validated CARDIFF diabetes model was used. Clinical inputs for the model were sourced from a systematic review and network meta-analysis (NMA) in monotherapy. A UK healthcare perspective was used for costs, and quality-adjusted life years (QALYs) were calculated from utility data in the published literature. A range of assumptions to reflect potential clinical practice were utilised. Alterations to the HbA1c switching threshold and assumptions on weight extrapolation were considered, in order to investigate the impact of different profiles of weight change and longer-term evidence for the maintenance of weight loss. The cost-effectiveness was reported as an incremental cost-effectiveness ratio (ICER). RESULTS When the model assumptions were varied around the HbA1c switching threshold and around the profile of maintenance of weight loss to better reflect clinical practice, the ICER point estimates ranged from £1,847 to £30,795. The lowest ICER point estimate was associated with an assumption of maintaining the weight differential that is created at treatment initiation, which is generated by the better weight profile of dapagliflozin compared to DPP4i, over the whole time horizon. The highest estimate arose when the weight differential was maintained for 2 years and there was a higher switching threshold for initiating insulin. CONCLUSIONS Dapagliflozin monotherapy has potential as a cost-effective treatment option from a UK healthcare perspective for patients with T2DM who are intolerant to metformin and are inadequately controlled by diet and exercise alone, based upon a range of explored scenarios. This study also demonstrates the value of performing scenario analysis to inform decision-making.