OBJECTIVES Canagliflozin is a novel oral agent for the treatment of T2DM that inhibits sodium-glucose co-transporter 2 (SGLT2), a mechanism that is complementary to other anti-hyperglycaemic drug classes, including insulin.  SGLT2 inhibition leads to inhibition of glucose reabsorption and urinary glucose excretion, thereby reducing blood glucose, weight, and blood pressure. An economic (cost-effectiveness) evaluation of new technologies versus routine care is required prior to uptake in Ireland to ensure good value-for-money.  This study evaluates the cost-effectiveness of canagliflozin compared to liraglutide – a currently reimbursed and routinely used glucagon-like peptide 1 (GLP-1) agonist – as dual therapy in combination with metformin from the payer perspective in the Irish healthcare setting. METHODS The Economic and Health Outcomes Model of T2DM (ECHO-T2DM) [using updated UKPDS 82 mortality and risk equations] was used to simulate 40-year costs and outcomes associated with canagliflozin (100mg titrated to 300mg in patients requiring tighter glycaemic control) compared to liraglutide 1.2mg. Patient characteristics were sourced from canagliflozin RCTs in patients uncontrolled on metformin monotherapy and treatment effects were obtained from a network meta-analysis. The costs of treatments and outcomes were localised and inflated to 2013 values where possible.  Utilities were sourced from the literature. Costs and outcomes were discounted at 5% annually. RESULTS In the base case, canagliflozin was associated with incremental cost savings of €3,382 compared to liraglutide 1.2mg. It was also associated with a 0.022 more life years and 0.020 more quality adjusted life years (QALYs), suggesting that canagliflozin dominates liraglutide. Results were driven by lower acquisition costs for canagliflozin. Sensitivity analyses indicated that the dominance observed was robust. CONCLUSIONS In these simulations, canagliflozin dominated liraglutide 1.2mg in dual therapy (add-on to metformin) in the Irish setting.  These results suggest that canagliflozin represents good ‘value for money’ in treating these patients, compared to a routinely used GLP-1 agonist.