OBJECTIVES: To project the long-term clinical and economic outcomes associated with continuous subcutaneous insulin infusion (CSII) compared with multiple daily injection (MDI) in patients with type 1 diabetes in Sweden and Norway. METHODS: A previously published and validated computer simulation model of type 1 diabetes was adapted to project life expectancy (LE), quality-adjusted life expectancy (QALE) and costs in Norwegian and Swedish settings. Effects associated with CSII and MDI delivery systems and baseline simulated cohort characteristics (mean age 26 years, duration of diabetes 12 years, 54% male, mean HbA1c 8.68%) were taken from a recent meta-analysis. Direct medical costs and indirect costs (human capital approach) were accounted in year 2005 values. Clinical and cost outcomes were projected over a lifetime horizon and discounted at a rate of 3% per annum. RESULTS: CSII treatment was associated with increased LE versus MDI in the Norwegian and Swedish settings (0.81 and 1.03 years, respectively) and increased QALE (0.90 and 1.03 quality-adjusted life years (QALYs), respectively). The cumulative incidence of diabetes-related complications, particularly nephropathy and retinopathy complications was also lower in the CSII treatment arm compared to MDI. Mean lifetime costs were greater for CSII treatment compared to MDI in the Norwegian setting (NOK 1,189,181±16,317 versus 845,183±16,432), which produced an incremental cost-effectiveness ratio (ICER) of NOK 380,519 (~€48,500) per QALY gained for CSII versus MDI. In the Swedish setting CSII was also associated with higher lifetime costs compared to MDI (SEK 3,026,056±58,873 vs 2,965,366±60,025) which led to an ICER of SEK 58,830 (~€6,300) per QALY gained for CSII versus MDI. CONCLUSIONS: CSII was associated with increased LE and QALE and reduced incidence of diabetes-related complications compared to MDI. CSII represents good value for money in the Norwegian and Swedish setting from a societal perspective by generally accepted standards.