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Aim: To investigate the cost-effectiveness of liraglutide as add-on to metformin vs. glimepiride or sitagliptin in patients with Type 2 diabetes uncontrolled with first-line metformin., Methods: Data were sourced from a clinical trial comparing liraglutide vs. glimepiride, both in combination with metformin, and a clinical trial comparing liraglutide vs. sitagliptin, both as add-on to metformin. Only the subgroup of patients in whom liraglutide was added to metformin monotherapy was included in the cost-utility analysis. The CORE Diabetes Model was used to simulate outcomes and costs with liraglutide 1.2 and 1.8 mg vs. glimepiride and vs. sitagliptin over patients' lifetimes. Treatment effects were taken directly from the trials. Costs and outcomes were discounted at 3.5% per annum and costs were accounted from a third-party payer (UK National Health System) perspective., Results: Treatment with liraglutide 1.2 and 1.8 mg resulted, respectively, in mean increases in quality-adjusted life expectancy of 0.32 ± 0.15 and 0.28 ± 0.14 quality-adjusted life years vs. glimepiride, and 0.19 ± 0.15 and 0.31 ± 0.15 quality-adjusted life years vs. sitagliptin, and was associated with higher costs of £ 3003 ± £ 678 and £ 4688 ± £ 639 vs. glimepiride, and £ 1842 ± £ 751 and £ 3224 ± £ 683 vs. sitagliptin, over a patient's lifetime. Both liraglutide doses were cost-effective, with incremental cost-effectiveness ratios of £ 9449 and £ 16,501 per quality-adjusted life year gained vs. glimepiride, and £ 9851 and £ 10,465 per quality-adjusted life year gained vs. sitagliptin, respectively., Conclusions: Liraglutide, added to metformin monotherapy, is a cost-effective option for the treatment of Type 2 diabetes in a UK setting., (© 2011 The Authors. Diabetic Medicine © 2011 Diabetes UK.)