OBJECTIVES: To evaluate 2-year real world outcomes of glycemic control in patients with T2DM initiating insulin glargine vs NPH insulin. METHODS: Patients with T2DM (March 2001–March 2005) who failed oral antidiabetic agents, initiated glargine (n=2105) or NPH (n=734), with continuous plan enrollment for >18 months (6 months (baseline) prior to and 12 months after insulin initiation) and with available laboratory HbA1C values, were evaluated using a US managed care claims database. Baseline demographics, HbA1C, co-morbidities, health care utilization, pharmacy copayment, and concomitant followup antidiabetic medications were controlled. Costs were evaluated using actual paid claims by health insurance, adjusting for inflation to the most current year value. RESULTS: Patients at baseline had same mean age 54 years, 44 vs. 52% female, baseline HbA1C 9.3 vs. 8.9%, access to endocrinologist 36 vs 46%, average number of oral antidiabetic agents 2.3 vs. 2.0, patients with medical insurance claims for hypoglycemia 3.2 vs. 4.3%, Charlson comorbidity score for overall comorbidities 0.64 vs 0.82, and 6-month total health care costs $8,797 vs $12,924 in glargine vs NPH initiator groups, respectively. Adjusted 1-year mean HbA1C was 8.05 vs 8.51% (d=-0.45, p=0.0036) and 2-year mean HbA1C was 8.03 vs 8.37% (d=-0.33, p=0.0099) for glargine and NPH, respectively. At end of 2 years, 16.6% NPH initiators dispensed glargine prescriptions while 2.7% glargine initiators dispensed NPH prescriptions. Adjusted rate of patients per quarter in the first year with medical claims for hypoglycemia was 1.7 vs. 2.9% (d=-1.2%, p=0.0559) and 2-year quarterly rate was 1.55 vs. 2.51% (d=-0.96%, p=0.0139). Adjusted 1-year total healthcare costs were $16,184 vs. $21,104 (quarterly d=-$1,034, p=0.0372) and 2-year costs was $30,032 vs. $42,208 (quarterly d=-$1,522, p=0.0029). CONCLUSION: Initiation of insulin glargine, relative to NPH, was associated with sustained improvements in glycemic control with lower rate of medically claimed hypoglycemia and lower total healthcare expenditures in patients with T2DM.