OBJECTIVES: To evaluate the long-term cost-utility of liraglutide versus glimepiride as add-on therapy to metformin in patients with Type 2 diabetes, based on the results of clinical trial conducted in Asian population.  METHODS: The validated UKPDS Outcomes Model was used to project life expectancy, quality adjusted life years (QALYs), incidence of diabetes-related complication and cost of complications in patients receiving those regimens. Baseline cohort characteristics and treatment effects were derived from an Asian study. China-specific complication costs and utility scores were taken from local studies. Patients’ outcomes were modelled for 30 years and incremental cost-effectiveness ratios (ICERs) were calculated for liraglutide compared with glimepiride from the health care system perspective. Both costs and clinical benefits were discounted at 3%. Sensitivity analyses were also performed. RESULTS: Over a period of 30 years, compared with glimepiride, liraglutide 1.8mg was associated with improvements in life expectancy (0.1 year) and QALY (0.168), and a reduced incidence of diabetes-related complications leading to an ICER per QALY gained of CNY 256871. Sensitivity analyses indicated that the final ICER was highly sensitive to time horizon, price of liraglutide and the effects of liraglutide in improving the systolic blood pressure and lipid profiles but insensitive to the effect of liraglutide in the reduction in HbA1c. CONCLUSIONS: Long-term projections indicated that liraglutide was associated with increased life expectancy, QALYs, and reduced incidences of complication comparing with glimepiride. If the 3X per capita GDP  was adopted as the WTP threshold per QALY, however, the administration of liraglutide was not considered cost-effective in China, and less likely to be cost effective in  most Asian developing economies (e.g., Thailand, Malaysia) than Asian developed  economies (Japan, Singapore). But with a 38% reduction of  our modelled acquisition cost of liraglutide (from CNY369.2 - CNY 228.02), liraglutide could be considered cost-effective in China.