OBJECTIVE: to assess systematically, using a panel of physician experts, the assumptions made for a pharmacoeconomic model regarding the indications, treatment initiation and decision rules for management of type 2 diabetics. METHODS: The panel consisted of 7 physicians (three family physicians, two internists and two endocrinologists) who were randomly selected from a pool of high-volume prescribers. The panel was contacted by phone and upon acceptance, they were mailed a 63-item questionnaire cover clinical criteria for treatment management, adherence to diabetes guidelines, decision rules for failure treatment, resource use and tests requested for drug-naïve and previously treated patients. The questionnaire was developed based on literature review and pilot-tested between two clinicians for appropriateness. The ratings were done using a 5-item Likert scale ranging from “strongly agree” to “strongly disagree”. RESULTS: All participating physicians completed the questionnaire. Endocrinologists and internists follow the American Diabetes Association guidelines (ADA). Only two family physicians use the ADA guidelines. The main assumptions for the pharmacoeconomic model coincided with the experts’ opinion, such as the initial treatment for a drug-naïve type 2 diabetic patient is monotherapy and after its failure an increased dose followed by addition of another treatment is recommended. Treatment adjustment is based on glycosylated hemoglobin, post-prandial glucose or fasting plasma glucose. For any treatment changes, patient should visit physician office but they are not usually hospitalized. The presence of side effects is an indication to decrease the dose. Number and type of laboratory tests are independent of drug-naïve status. There are no differences in the criteria used for treatment selection and treatment changes between drug-naïve patients and previously treated patients. Furthermore experts do not recommend switching medications. CONCLUSIONS: An expert panel is a useful tool to assess model assumptions