OBJECTIVES: Based on findings of a recent meta-analysis, evaluate long-term cost-effectiveness of acarbose given in addition to existing treatments in type-2 diabetes patients in a German setting. METHODS: The CORE Diabetes Model (peer-reviewed, published, validated computer simulation model) was used to project long-term clinical and cost outcomes in type-2 diabetes patients receiving acarbose or placebo in addition to their existing treatment. Transition probabilities and risk adjustments came from published sources. Treatment effects and baseline cohort characteristics were based on recently published retrospective meta-analysis of placebo-controlled, double-blind, long-term studies in type-2 diabetes, showing that acarbose treatment was associated with improvements in HbA1c, systolic blood pressure, lipid levels and BMI, and significant reduction in the risk of cardiovascular events. Direct costs were retrieved from published sources and projected over patient lifetimes from a third party health care payer perspective in Germany. Costs and clinical benefits were discounted at five percent per annum. Sensitivity analyses were performed. RESULTS: Acarbose treatment was associated with improvements in mean discounted life expectancy of 0.21 years (7.78 ± 0.13 versus 7.57 ± 0.13 years [mean ± standard deviation]) and quality-adjusted life expectancy of 0.19 QALYs (5.36 ± 0.09 versus 5.17 ± 0.09 QALYs). Lifetime direct costs were on average €134 per patient more expensive with acarbose than with placebo (€32,778 ± 1194 versus €32,643 ± 1285). Reduced complicaiton ocosts parially offset greater treatment costs in the acarbose arm, leading to incremental cost-effectiveness ratios of €633 per life year gained and €692 per quality-adjusted life year gained. Sensitivity analysis showed that these results were robust under variation in a range of assumptions. CONCLUSIONS: Addition of acarbose to existing treatment was projected to lead to improvements in life expectancy and quality-adjusted life expectancy, and provide excellent value for money over patient lifetimes by current standards in the German setting.