OBJECTIVES: A recent randomized, open-label, parallel group trial showed that liraglutide is superior to sitagliptin for reduction of HbA1c. Although these findings support the use of liraglutide as an effective GLP-1 agent to add to metformin, the value of liraglutide needs to be quantified in the framework of a cost-effectiveness (CE) analysis in a US setting. This current study sets out to assess the long-term CE outcomes of liraglutide vs. sitagliptin based on treatment effects data from the 52-week trial. METHODS: The IMS CORE Diabetes Model, a non-product-specific, validated computer simulation model that projects the long-term outcomes related to interventions for type 2 diabetes, is used for simulation over 35 years. Patients were simulated on one of the 3 treatment options: liraglutide 1.2 mg daily, 1.8 mg daily, or sitagliptin 100 mg daily, each used as add-on therapy to metformin. Incremental cost-effectiveness ratios (ICER) were generated for liraglutide 1.2 mg versus sitagliptin and liraglutide 1.8 mg versus sitagliptin. Transition probabilities, health state utility values and complication costs were obtained from published sources. All outcomes were discounted at 3% per annum, and the analysis was conducted from the perspective of a third-party payer in the US.  Sensitivity analyses were performed to test robustness of the base case scenario. RESULTS: For liraglutide 1.8 mg versus sitagliptin, the ICER was $37,234 per QALY gained, while for liraglutide 1.2 mg versus sitagliptin, the ICER was $25,742 per QALY gained. In all sensitivity analyses including setting the HbA1c reduction to its 95% lower limit, the ICERs remained below USD 50,000/QALY, a commonly accepted threshold in the United States, except for the shortest time horizon of 10 years. CONCLUSIONS: The availability of liraglutide 1.2 mg and 1.8 mg with improved efficacy profiles over sitagliptin could improve patient care, while being cost-effective treatment options as add-on to metformin.