What is the most cost-effective medication for type 2 diabetes?

Most Cost-Effective Medication for Type 2 Diabetes

Metformin is the most cost-effective medication for type 2 diabetes, followed by sulfonylureas (specifically glipizide or glimepiride) as second-line therapy when metformin alone is insufficient. 1

First-Line Therapy: Metformin Dominates

• Metformin remains the clear cost-effectiveness winner as initial therapy, with extremely high cost-effectiveness given its very low cost and proven efficacy in reducing HbA1c by approximately 1.5 percentage points 2, 3
• When compared to newer agents as first-line therapy, SGLT2 inhibitors cost $508,430 per QALY gained versus metformin, and oral GLP-1 receptor agonists cost $875,000 per QALY gained versus metformin—both far exceeding the $150,000 per QALY willingness-to-pay threshold 1
• Injectable GLP-1 receptor agonists as first-line therapy are even worse: they cost more and actually shorten quality-adjusted life expectancy compared to metformin 1

Second-Line Therapy: Sulfonylureas Win on Cost

When metformin monotherapy fails to achieve glycemic control, the cost-effectiveness hierarchy is clear:

Sulfonylureas Are Most Cost-Effective

• Adding a sulfonylurea to metformin costs $12,757 per QALY gained—the most favorable cost-effectiveness estimate among all second-line options 4
• Specifically, glipizide or glimepiride are preferred over glyburide due to lower hypoglycemia risk, particularly in elderly patients and those with renal impairment 5
• The American Diabetes Association recommends glipizide over glyburide for most patients due to its safer profile 5

Newer Agents Are Poor Value as Second-Line

• GLP-1 receptor agonists added to metformin cost $807,000 per QALY gained versus sulfonylureas 1
• DPP-4 inhibitors added to metformin are more expensive and less effective than sulfonylureas (dominated strategy) 1
• Long-acting insulin analogues added to metformin cost $1,194,000 per QALY gained versus sulfonylureas 1

When Newer Agents May Be Intermediate Value

The cost-effectiveness picture changes when comparing newer agents to adding nothing:

• GLP-1 receptor agonists and SGLT2 inhibitors may be of intermediate value when added to background therapy (metformin ± sulfonylureas) compared with adding nothing 1
• Empagliflozin added to standard care costs $86,000 per QALY gained (96% probability <$113,000), which approaches acceptable cost-effectiveness thresholds in patients with high cardiovascular risk 1
• Tirzepatide added to background therapy costs $59,000 per QALY gained versus background therapy alone 1

Third-Line Therapy: NPH Insulin Beats Everything

When three medications are needed:

• NPH insulin is more cost-effective than all alternatives when added to metformin plus sulfonylureas 1
• GLP-1 receptor agonists cost $2,072,000 per QALY gained versus NPH insulin 1
• DPP-4 inhibitors are more expensive and less effective than NPH insulin 1
• Long-acting insulin analogues (degludec, glargine) are similarly effective but more expensive than NPH insulin 1
• Insulin degludec costs $192,000-$406,000 per QALY gained versus insulin glargine 1

Critical Caveats

When to Deviate From Pure Cost-Effectiveness

While sulfonylureas and NPH insulin win on cost-effectiveness, clinical context matters:

• In patients with established cardiovascular disease, chronic kidney disease, or heart failure, SGLT2 inhibitors and GLP-1 receptor agonists provide cardiovascular and renal benefits (12-39% risk reduction for major outcomes) that may justify their higher costs despite unfavorable cost-effectiveness ratios 3
• These benefits are demonstrated in randomized trials and represent direct effects beyond glucose lowering 3

Hypoglycemia Risk Management

• Glipizide is preferred over glyburide because it lacks active metabolites and has lower hypoglycemia risk, especially in elderly patients and those with renal impairment 5
• Glimepiride is not associated with weight gain, hypoglycemia, or negative cardiovascular events relative to other sulfonylureas 6
• NPH insulin carries higher hypoglycemia risk than long-acting insulin analogues, which is the primary trade-off for its superior cost-effectiveness 1

The Bottom Line Algorithm

Step 1: Start with metformin (unless contraindicated) 2, 3

Step 2: If metformin insufficient and no cardiovascular/kidney disease:

• Add sulfonylurea (glipizide or glimepiride preferred) 1, 5, 4

Step 3: If two agents insufficient:

• Add NPH insulin 1

Alternative pathway: If established cardiovascular disease, heart failure, or chronic kidney disease present at any step:

• Consider SGLT2 inhibitor or GLP-1 receptor agonist despite higher costs, as cardiovascular/renal benefits may outweigh cost-effectiveness concerns 3

Key Limitation

All cost-effectiveness estimates are extremely sensitive to drug acquisition costs 1. Large reductions in newer drug costs would be required to achieve high cost-effectiveness (<$50,000 per QALY gained), with threshold costs generally far lower than current wholesale acquisition prices 1.