OBJECTIVES: Estimating the budget impact of the introduction of vildagliptin as addition to insulin in the treatment of patients with type 2 diabetes mellitus with inadequate glycemic control (HbA1c> 7%) compared to the same group of patients treated with insulin monotherapy in Colombia, from third-party payer perspective. METHODS: Markov model, which simulates the natural history of the disease, budget impact analysis (AIP) was made under the Colombian context for a five-year period using direct health costs associated with the natural history of the disease, including macrovascular  and microvascular events and episode of hypoglycemia in a mobile cohort of patients, looking at prevalence, incidence and death. In the alternative scenarios, it will estimate reductions in insulin doses for the corresponding arm vildagliptin in addition to insulin. Direct health care costs were taken from insurers and individual records of health benefits (RIPS) 2012. RESULTS: With a disease prevalence and incidence rate of 0.04 & 0.00879 respectively in Colombia and assuming that 8.6% of patients require insulin according to the stage of the disease, the cumulative cost to 5 years of patients treated with insulin alone, would be COP $3,030,742,552,215(USD1.565.522,80), compared to COP $3,546,840,289,383(USD 1.832.111,85) treated with insulin + Vildagliptin. Additionally, contemplating a reduction of approximately 27% in the dose of insulin, savings were generated under the use of vildagliptin in addition to insulin from the third year on total cost as well as reduction of cardiovascular and adverse events. Similarly, savings accumulated over the capitation payment unit of 0.000093% in 5 years, accompanied by lower mortality. CONCLUSIONS: The use of vildagliptin in addition to insulin will be significantly less expensive than using insulin monotherapy for patients with type 2 diabetes with inadequate glycemic control, in the Colombian health system context, along with better health care outcomes.