OBJECTIVES Assess the cost-effectiveness of sitagliptin versus sulfonylurea as an add-on therapy to metformin among type 2 diabetes patients currently on metformin but not achieving HbA1c goal in Belgium. METHODS We employed a previously published individual-level simulation model that incorporated risk equations/algorithms from the UKPDS Outcomes Model (68) to predict the long term risks of type 2 diabetes-related complications. The impact of treatments on risk factors and side effects was based on clinical trials, observational studies, systematic reviews and meta-analyses of relevant RCTs, as well as the most recent findings on the potential benefit of DPP4 on other-cause mortality and cardiovascular diseases and the possible detrimental effect of sulfonylurea on myocardial infarction (MI). European patient profiles and Belgium-specific data on drug prices, diabetes-related complication treatment costs, treatment patterns and guidelines were used. RESULTS A sitagliptin-based treatment strategy was projected to cost €1,102 more than a sulfonylurea-based treatment strategy per patient lifetime, with the majority of excess costs from prescription drugs. Life expectancy was 0.077 years greater per patient on a sitagliptin-based strategy compared to a sulfonylurea-based strategy. The discounted gain in QALY was 0.082 years with the sitagliptin-based strategy, driven by better hypoglycemia, weight, and MI risk profile. The estimated ICER was €13,460/QALY. Sensitivity analyses demonstrated that the ICER was somewhat sensitive to the price of sulfonylureas and the weight utility decrement, and most sensitive to assumptions on relative risk parameters. When no relative risk reduction on MI or other-cause mortality was assumed, the ICER was €17,543/QALY and €17,053/QALY, respectively. When no relative risk reduction on either MI or other-cause mortality was assumed, the ICER increased to €23,691/QALY. CONCLUSIONS Using a threshold of €15,000 per QALY gained, compared to a sulfonylurea-based treatment strategy, a sitagliptin-based treatment strategy was cost-effective in metformin-failed patients with type 2 diabetes in Belgium.