OBJECTIVES: To assess the costs and effects of Januvia versus Avandia as supplementary treatment in combination with metformin, for patients with type 2 diabetes in whom metformin (in addition to diet and exercise) does not provide adequate glycemic control. METHODS: The Disease Elimination Life Table Analysis (DELTA) cohort model was used to assess the costs and effects of Januvia (100mg) in comparison to Avandia (8mg). The model contains five sub models representing diabetes related complications. Estimates of disease progression, incidence in the sub models, disease related mortality, and all cause mortality, were derived from the United Kingdom Prospective Diabetes Study. Estimates regarding drug efficacy and adverse events were based on an 18-week head-to-head comparison of Januvia 100mg versus Avandia 8mg supplementary to metformin. The analysis was conducted from a societal perspective. Direct and indirect costs were included. Effects were reported as (disease-free) life years and quality-adjusted life years (QALY). To determine the robustness of the model and the impact of uncertainty, uni- and multivariate sensitivity analyses were carried out. RESULTS: Januvia is estimated to be the dominant treatment when compared to Avandia 8mg. The univariate sensitivity analyses revealed this conclusion to be robust over a wide range of values. Results from the multivariate sensitivity analysis estimate the probability that Januvia combines additional effectiveness with cost savings at 59%, the probability that Januvia gains QALYs at additional costs at 13%. The probability that Januvia is less effective is estimated at 28% (15% with cost savings and in 13% with additional costs). CONCLUSION: Conditional on the correctness of the estimates and assumptions made, Januvia 100mg is dominant over 8mg Avandia. Sensitivity analyses suggest results are robust to reasonable changes in input parameters.