OBJECTIVES: Canagliflozin (CANA) is a novel inhibitor of the sodium glucose co-transporter 2 in development for treating patients with type 2 diabetes mellitus (T2DM).  In a previously reported randomized, double-blind, 4 arm parallel group (placebo, CANA 100mg, CANA 300mg and sitagliptin 100mg [SITA]) study of 1284 subjects inadequately controlled on MET monotherapy, CANA 100mg and 300mg significantly decreased HbA1c versus placebo after 26 weeks of therapy by 0.62% and 0.77%, respectively; SITA decreased HbA1cversus placebo by 0.65%. In this trial, both CANA doses and SITA significantly reduced systolic blood pressure (CANA 100mg: 5.36 mmHg; CANA 300mg: 6.58 mmHg; SITA 3.34 mmHg), however, only CANA significantly reduced body weight (CANA 100mg: 2.5%; CANA 300mg: 2.9%) versus placebo. The objective of this study was to simulate the health outcomes and associated costs attributable to using CANA versus SITA in Mexico. METHODS:     Forty-year outcomes associated with adding CANA 100mg or CANA 300mg versus SITA to MET were simulated using ECHO (Economic and Health Outcomes)-T2DM, a validated micro-simulation model.  Treatment effects and patient characteristics were sourced from the trial.  Simulated treatment was intensified when HbA1cexceeded 7.5% by adding basal insulin, and subsequently prandial insulin.  Disutilities associated with micro- and macro-vascular events were obtained from the literature and costs were adapted to the Mexican setting.     RESULTS: Using CANA 300mg versus SITA was projected to reduce relative risks for key events (e.g. myocardial infarction 10.2%; congestive heart failure 6.6%; macroalbuminuria 6.6%; microalbuminuria 6.2%),  improve QALYs (0.046), and result in lower costs per patient ($1927MXN). Simulation results of CANA 100mg versus SITA were generally similar, albeit estimates of reductions in relative risks, QALY gains and associated costs differences were smaller. CONCLUSIONS: These simulations suggest that using CANA versus SITA as an add-on to MET could result in improved outcomes and reduced costs in Mexico.