OBJECTIVES:  Many patients with Type 2 Diabetes Mellitus (T2DM) fail to achieve glycemic control. Medication nonadherence has been identified as a key factor contributing to suboptimal disease outcomes. Increasing adherence could influence not only clinical parameters and patient well-being, but also cost. This literature review was undertaken to identify published studies reporting on the cost of medication nonadherence in T2DM. METHODS:  The search strategy identified studies that reported healthcare costs in nonadherent versus adherent patients. We searched electronic databases (MEDLINE, EMBASE, CDSR, CENTRAL, DARE, HTA, NHSEED) for manuscripts published between January 2006 and December 2015, and 2015 abstract books (ISPOR, ADA and EASD congresses). Results were assessed for relevance by two reviewers. For eligible studies, data extracted included objectives, study design, measurement of adherence, results and conclusions. RESULTS:  4662 de-duplicated abstracts were identified from a combined search on nonadherence and a broad range of different outcomes. A full text review informed the selection of 14 studies exploring the direct link between medication nonadherence and cost. All the studies involved analysis of retrospective claims data with study follow-ups ranging from 1 to 7 years. Most studies came from the US (n=11). Medication possession ratio was used to measure adherence in 11 of 14 studies. Most of the studies (9/14) concluded that medication nonadherence increases total healthcare cost. There was an increase in pharmacy costs for adherent vs. nonadherent patients in nearly all studies reporting the cost breakdown (9/10 studies), but this increase was often offset by savings in other areas such as the emergency room or hospitalizations. CONCLUSIONS:  Despite significant research in diabetes adherence few studies have explored medication nonadherence and cost. In this review most studies found that medication nonadherence increases healthcare costs in T2DM, while increased pharmacy costs from adherence are often offset by reductions in other healthcare costs.