OBJECTIVES Canagliflozin is a sodium-glucose co-transporter 2 (SGLT2) inhibitor used in treatment of patients with type 2 diabetes mellitus (T2DM). The objective is to estimate the cost-effectiveness of canagliflozin (100mg once daily and 300mg once daily) compared with liraglutide in combination with metformin and sulfonylurea (SU) for the treatment of T2DM inadequately controlled with metformin and SU in France. METHODS The IMS CORE Diabetes Model was used to project clinical and economic outcomes for patients with T2DM treated with canagliflozin or liraglutide, each in combination with metformin and SU. Since direct trial data were not available, the relative treatment effects on HbA, SBP and BMI for liraglutide 1.8mg in combination with metformin and SU were derived from a network meta-analysis (NMA) of treatment effects at 26 weeks. This study is limited by the absence of direct or indirect data on the effect of liraglutide 1.2mg in combination with metformin and SU, therefore the relative treatment effects on HbAand BMI at 26 weeks for liraglutide 1.2mg were estimated using the dose-response relationship from a NMA based on treatments in combination with metformin only. French market share data were used to weight the results of liraglutide 1.8mg and 1.2mg. RESULTS Canagliflozin 100mg showed cost savings when compared to treatment with liraglutide (1,388 €); incremental QALYs were estimated as -0,035. Canagliflozin 300 mg was dominant, with cost savings of 1,411 € and relatively small incremental QALY gain of 0.003 CONCLUSIONS The analyses found that treatment of T2DM with canagliflozin 100mg or 300mg instead of liraglutide as add on to metformin and SU would generate substantial cost savings in France. Canagliflozin 300mg showed similar outcomes to liraglutide, suggesting that the treatments are similar in effectiveness, and is thus likely to be a highly cost-effective treatment option.