OBJECTIVES: Type 2 Diabetes is a major public health care problem in Mexico. Some patients may require more than one oral antidiabetic treatment to achieve glycemic control. Vildagliptin, a DPPIV inhibitor is an option in combination with the standard treatment of metformin.  The objective was to assess the cost-effectiveness of Vildagliptin/Metformin FDC versus other oral treatments available in the public market. METHODS: Cost-effectiveness analysis of the oral antidiabetic treatments available in the public market in Mexico was conducted. The comparisons included the following options: Vildagliptin/Metformin FDC, glibenclamide, and thiazolidinediones (Rosiglitazone and pioglitazone). Cost effectiveness analysis versus other oral antidiabetics incorporated the incidence and costs of adverse events according to Ferrannini 2009 and Gonzalez-Ortíz 2009 for glibenclamide and Motola 2012 for thiazolidinediones. Drug costs were elicited from public tenders and health care services from unitary costs of the IMSS. The perspective is the public health provider and the time horizon is one year. RESULTS: The use of Vildagliptin/Metformin FDC (50/500 or 850 mg) BID compared to glibenclamide, is a dominant strategy if the cost per hypoglycemia exceeds US$714.03. Vildagliptin/Metformin FDC is dominant versus   pioglitazone,if the cost of fractures incurred by pioglitazone exceeds US$56.56. Drug acquisition costs of Vildagliptin/Metformin FDC are 150% cheaper per patient treated vs rosiglitazone; additionally rosiglitazone is associated with myocardial infarction events. CONCLUSIONS: Vildagliptin/Metformin FDC is an opportunity for resource optimization in the public sector. This cost effectiveness analysis is not considering other potential adherence benefits which are related with having two treatments in one pill.