OBJECTIVES: The US burden of type-2 diabetes mellitus (T2DM) remains high and available treatment options leave patients with the need for innovative and safe treatments.  This study assessed the financial consequences of adding alogliptin, a novel DPP4i, plus pioglitazone fixed dose combination (FDC) therapy to a US managed care health plan formulary. METHODS: An Excel-based model was developed to evaluate the therapy costs for patients uncontrolled on any pioglitazone- or DPP4i-containing regimen. Baseline costs were estimated for branded DPP4i, GLP1s, and FDCs using national market share and average daily consumption data from IMS National Prescription Audit (2012); wholesale acquisition costs were obtained from Medispan PriceRX (November 2012). Alogliptin/pioglitazone FDC adoption was estimated based on one-year expected uptake and was priced at parity with the leading DPP4i.  Budget impact (BI) was calculated as total annual costs and costs per member per month (PMPM). Univariate sensitivity analyses were performed. T2DM prevalence and treatment data were obtained from published sources.  The percentage of T2DM patients uncontrolled on pioglitazone and/or DPP4i was estimated from health plan claims analysis from January 2011 to September 2011.  RESULTS: In a hypothetical health plan of 1,000,000 members, the estimated number of adult T2DM patients not on insulin and uncontrolled on any pioglitazone or DPP4i-containing regimen was 13,779.   Assuming proportional adoption of alogliptin/pioglitazone from all branded DPP4i agents, GLP-1, and FDCs, total annual pharmacy costs was $28,015,900 without alogliptin/pioglitazone and $28,024,195 with the new FDC, resulting in a BI of $8,295 ($0.00 PMPM, relative BI 0.03%).  In sensitivity analysis, it was assumed that the new FDC pulls share from DPP4i and GLP-1s only, resulting in BI of $12,838 ($0.00 PMPM, relative BI 0.04%). CONCLUSIONS: Inclusion of alogliptin/pioglitazone FDC on a formulary provides an additional effective treatment option and is budget neutral, having a negligible impact on the annual pharmacy budget.