OBJECTIVES: Regular glucose monitoring is important for T2DM patients receiving intensive insulin. A novel, factory-calibrated flash continuous glucose monitoring system (the FreeStyle Libre™ system) continuously measures glucose levels from interstitial fluid. Data transfers to a handheld reader from a wearable arm sensor without requiring routine self-monitoring of blood glucose (SMBG). The REPLACE RCT showed a reduced time spent in hypoglycemia in T2DM patients receiving intensive insulin for the flash monitoring system compared to SMBG, while decreasing the number of blood glucose tests by 92%. A time trade-off study demonstrated a utility benefit with the flash monitoring system compared with SMBG (Matza 2015). This analysis assesses the cost-effectiveness of the flash monitoring system versus SMBG in T2DM patients receiving intensive insulin from a UK NHS perspective. METHODS: The IMS Core Diabetes Model was run over a 40-year lifetime horizon, modelling a population reflecting the REPLACE study. Intervention effects included study-based reductions in hypoglycemic events (27.7% reduction in glucose <70 mg/dL) and the utility benefit (0.03; Matza 2015). Costs were reported in 2015 GBP. Incremental cost-effectiveness ratios (ICERs) were calculated, with sensitivity analyses conducted for key inputs. RESULTS: The base case ICER was £23,842 and cost per hypoglycemia event averted was £93. For the scenario analyses, ICERs ranged from £6,555 to £29,517. CONCLUSIONS: Improved hypoglycemia and a health utility benefit translate to a base case ICER under the NICE threshold for cost-effectiveness for medical devices of up to £30,000 per QALY. This result was confirmed across a range of scenario analyses. The flash monitoring system may be considered cost effective for use in the UK NHS for T2DM patients receiving intensive insulin.