OBJECTIVES: A recent clinical trial demonstrated non-inferiority in HbA1c and hypoglycaemic events with insulin detemir (IDet) compared to NPH in a basal/bolus regimen. Mean body weight in the IDet group increased less than the NPH group (0.4Kg vs. 1.3Kg respectively p=0.017). The aim of this analysis was to use a validated diabetes model to link these short-term outcomes to long-term complication rates and associated UK health care costs, and to calculate the cost-effectiveness of treatment with IDet in type-2 diabetes. METHODS: A validated, non-proprietorial model, The Core Diabetes Model, was used to predict: long-term complications; improvements in Life Years Gained (LYG); Quality-Adjusted Life Years (QALY's); long-term costs; and cost-effectiveness for IDet vs. NPH. Standard Markov/Monte Carlo simulation techniques were used to describe incidence and progression of complications. Probabilities of complications and HbA1c-dependent adjustments were derived from the UKPDS and other major clinical trials and population studies. Clinical input was taken from a 6-month multi-centre, multinational, open-label, parallel-group comparison phase III trial in type-2 patients. Costs of treating complications in the UK and utility values were retrieved from published sources. Direct costs of diabetes complications and drug treatment were projected over patients' lifetimes from a UK National Health Service perspective. RESULTS: The model projected that treatment with IDet would result in an extra 0.13 LYG and 0.08 QALYs per patient. Total lifetime costs/patient were estimated to increase by £1534. The cost per LYG was calculated to be 11,700 GBP and the cost per QALY to be £19,218. CONCLUSIONS: The model predicted that treatment with IDet would result in long term improvements in health outcomes and quality of life compared to NPH in patients with type-2 diabetes. The cost-effectiveness result is within the range considered to represent value for money in the UK.