OBJECTIVES: This study sought to evaluate the cost utility of insulin glargine in the UK for people with Type 1 diabetes mellitus (T1DM) using observational data in patients switching from NPH to insulin glargine and combining the effect of HbA1c and hypoglycaemia reduction. METHODS: A discrete event life time simulation with microvascular complications incorporated via the DCCT (Diabetes Control and Complications Trial) study and cardiovascular events modelled using the Framingham equations was adapted to include the combined effects of HbA1c and hypoglycaemia reduction using published meta-regression results from 11 randomised clinical trials. Direct costs and quality of life (EQ5D) were derived from published sources and the HODaR database respectively; costs and benefits were discounted annually at 3.5%. The model was adapted to the profile of T1DM patients switched from NPH to glargine identified via the THIN database. Analysis was conducted on a total of 383 patients with data for the 12 month period prior to, and post switch; using primary outcome measure of adjusted Hba1c change. As hypoglycaemia was not directly collected from the THIN database a sensitivity analysis was performed taking into account HbA1c benefit only. RESULTS: The median age of patients switched from NPH to glargine was 34 years with mean duration of T1DM of 11.4 years. Baseline HbA1c was 8.71% and patients switching to glargine showed a reduction in HbA1c of 0.195% (p=0.0045) between switch and 12-months post initiation. In a simulated cohort of 10,000 the discounted incremental cost effectiveness ratio (ICER) was £3,665 per quality adjusted life year gained (QALY). In sensitivity analysis using HbA1c benefit only the ICER was £9411. CONCLUSION: Based on real life observational data, switching to glargine is cost-effective when compared to NPH; with a corresponding ICER well within accepted thresholds, even in sensitivity analysis using HbA1c effect only.