OBJECTIVES To evaluate the long-term clinical and economic outcomes of adding Niaspan® to statin treatment in type 2 diabetes patients with persistently low HDL-c. METHODS Two models were developed to project long-term clinical and economic benefits. The first simulated the evolution of lipid levels with treatment utilising second order Monte Carlo methodology, and the second was designed to calculate the risk of coronary heart disease (CHD) events each subsequent year using standard Markov modelling techniques. Transition probabilities for CHD events were derived from the Framingham risk formulae. Baseline cohort characteristics and simvastatin treatment effects were taken from the 4S clinical trial (diabetes sub-group). Patients with persistently low HDL-c (<1 mmol/L) on statin treatment received either add-on Niaspan® or continued statin monotherapy. Treatment effects of Niaspan® were taken from several clinical studies summarized in the European SPC. Direct costs (2004 Euros) were accounted from a third party payer perspective. Annual discount rates of 5% (Germany) and 3% (Sweden) were applied to clinical outcomes and costs. RESULTS A total of 23.42% of patients were projected to have persistently low HDL-c levels after statin treatment. In these patients mean undiscounted life expectancies of 19.72 years and 19.13 years were projected for the Niaspan® and statin monotherapy arms respectively (undiscounted difference 0.59 years). Improvements in discounted life expectancy were 0.26 and 0.35 years respectively for Germany and Sweden. Lifetime direct medical costs were higher by €6,038 in Germany and €6,170 (SEK 56,308) in Sweden with addition of Niaspan®. Incremental cost-effectiveness ratios based on discounted life expectancies were €23,404 in Germany and €17,538 (SEK 160,099) per life year gained in Sweden for statin plus Niaspan® versus statin monotherapy. CONCLUSIONS In Germany and Sweden, addition of Niaspan® to statin treatment was highly cost-effective in type 2 diabetes patients with persistently low HDL-c compared to statin monotherapy.