OBJECTIVES: Cost study of diabetes therapy was conducted at national level in 1997 but the introduction of health insurance system and a lot of new medicines changed treatment patterns as well the cost of therapy. The goal of this study is to analyse the cost of diabetes therapy from the National Health Insurance Fund (NHIF) point of view and to compare prescribing practice with the previous study. METHODS: Information by the NHIF electronic data base was collected at national level and representative sample of 3410 and 2440 prescriptions for type-1 and type-2 diabetic patients was analyzed. The observed patients were also systematized for the available complications and their treatment cost was calculated on the basis of NHIF tariffs. Manufacturers' information for the insulin market was collected and compared with the prescribing information. RESULTS: The number of diabetic patients increased since 1997 from 150,000 to 225,000 and patients on insulin therapy account for 35%. The cost of the ambulatory treatment with peroral antidiabetics account for €800,000 while expenditures for insulin are €32 million. The metformin was prescribed in 43% and glibenclamid in 25% of prescriptions. It was revealed substantial growth in the total insulin market from 610 MU in 1997 to 969 MU sold in 2004 with prevailing prescribing of insulin mixtures in 59%. Micro and macro vascular complications prevail in 97% of the patients and account for 59% of expenditures paid for hospitalization and 20% of ambulatory expenditures. Expenditures for insulin account for 18% of the cost of diabetes treatment while per oral antidiabetics for less than 8%. CONCLUSION: The cost of insulin treatment of one patient is close to cost reported by similar European studies but Bulgaria delay with the introduction of insulin analogues and it could affect the future complications therapy.