OBJECTIVES: Thiazolidinediones (TZDs) were first introduced in the late 1990s as adjunctive oral therapy for patients with type 2 diabetes mellitus (T2DM). The comparative economic values of TZD therapeutic options currently available in the US marketplace are not well characterized. We estimated the cost-effectiveness of pioglitazone compared with rosiglitazone in treating T2DM consistent with AMCP cost-effectiveness guidelines. METHODS: Clinical efficacy and baseline parameters were taken from Goldberg RB et al, 2005, and entered into a previously validated, Markov-based economic model for T2DM. The model was used to project long-term improvements in clinical and economic outcomes comparing pioglitazone with rosiglitazone. A series of Markov constructs simulated the progression of diabetes-related complications (cardiovascular, neuropathy, renal and eye disease). Transition probabilities and HbA1c-dependent adjustments were derived from published epidemiological studies. Costs of T2DM complications were taken from published sources. Drug acquisition costs for pioglitazone and rosiglitazone were assumed to be $4.91/day and $4.18/day, respectively (WAC prices, 2007), and remained constant. A time horizon of 35 years was used, with costs and clinical outcomes discounted at 3% per annum. Univariate sensitivity analyses were conducted to test robustness of the base case cost-effectiveness ratio scenarios. RESULTS: The incremental life-years and quality-adjusted life years gained for pioglitazone versus rosiglitazone were 0.180 and 0.129 years, respectively, at an overall increased cost of $3241 per patient over the simulation period. Therefore, the incremental cost-effectiveness ratios were $17,981/LY and $25,219/QALY gained, respectively, in our base case analysis. One-way sensitivity analyses demonstrated that with variation in key input parameters (discount rates, HbA1c, lipid effects, etc.); cost-effectiveness findings were most sensitive to changes in HbA1c and high density lipoprotein (HDL) effects. CONCLUSION: Our economic modeling analysis suggests that pioglitazone delivers superior economic value when compared to rosiglitazone due to improved clinical outcomes specifically related to HDL effects.