OBJECTIVES: Various delivery systems for inhaled insulin (INI) are under development. However, they will likely be substantially more expensive than subcutaneous insulin (SCI). Whether this increased cost is justified is an important question which can be addressed through Contingent Valuation (CV), a survey technique that elicits individuals’ preferences for non-marketed products in terms of the amount they would be willing-to-pay. The purpose of this study was to assess diabetic (DM) patients’ preference and willingness-to-pay (WTP) for INI. METHODS: A face-to-face CV survey was administered to 96 type-1 and type-2 adult DM patients at St. Michael’s Hospital (Toronto, Canada) who were taking insulin and/or oral antihyperglycaemic drugs. Standardized information about INI and SCI was provided by video, and participant’s WTP was elicited using “payment scale” method, along with socioeconomic and clinical data. Published data was used to define INI attributes. The CV questionnaire received expert review for content validity and was pilot tested with 22 patients. RESULTS: Participants were 51.8±13.4 years old, and had DM for an average of 11.8±7.8 years; 77 had type-2 and 19 had type-1 DM. Significantly more participants (89%) preferred INI over SCI (P<0.01). The mean monthly WTP for INI ($153.70±$99.90) was significantly more than typical SCI cost of $50 (P<0.01). A greater proportion of type-2 patients (n=72/77) preferred INI than did type-1 patients (P<0.001). The mean WTP for INI in type-2 subgroup ($177.10±$91.60) was significantly more compared to type-1 ($154±$66.6,P=0.025). Significantly more participants who were not on insulin preferred INI compared to participants using insulin (P<0.001). Multiple-regression analysis showed strong association between participants’ income and insulin experience and their WTP for INI (P<0.001). CONCLUSIONS: DM patients prefer INI over SCI and are willing-to-pay significantly more per month than the cost of SCI. Preferences are stronger in type-1 patients DM and those with prior insulin experience.