OBJECTIVES: To investigate the long-term clinical and economic outcomes associated with exenatide versus insulin glargine as "add-on" treatments to oral therapy in individuals with Type 2 diabetes inadequately controlled with combination oral agents in the Swiss setting. METHODS: A computer simulation model of diabetes was used to project complications, life expectancy, quality-adjusted life expectancy and direct medical costs over a 35-year time horizon. Cohort characteristics and treatment effect data were derived from a 26-week randomized clinical trial comparing exenatide and insulin glargine. Modeled treatment effects included reductions in glycosylated hemoglobin (HbA1c) by -0.99% and -1.07% and in body mass index (BMI) by -0.80 and +0.55 kg/m2 with exenatide and insulin glargine respectively. Changes in systolic blood pressure and serum lipid levels were also captured. Simulations incorporated published quality of life utilities and Swiss costs from 2006. Extensive sensitivity analyses were conducted to assess the robustness of projected outcomes. Future clinical and economic outcomes were discounted at 2.5% per annum. RESULTS: In the base-case analysis exenatide was associated with comparable life expectancy (11,549 years versus 11,468 years) and an improvement in quality-adjusted life expectancy of 0.43 quality-adjusted life years (QALYs) versus insulin glargine over a 35-year time horizon. Exenatide was associated with a reduced cumulative incidence of most diabetes-related complications including an absolute reduction in myocardial infarction by 0.28%. Assuming an annual treatment cost of CHF 2,797.74 for exenatide, direct costs increased by CHF 8,378 per patient over the 35-year time horizon compared to insulin glargine. The resultant incremental cost-effectiveness ratio was CHF 19,450 per QALY gained for exenatide versus insulin glargine. CONCLUSIONS: Exenatide was associated with comparable life expectancy and an improvement in quality-adjusted life expectancy versus insulin glargine over a 35-year time horizon. Based on current standards exenatide would be a cost-effective treatment alternative to insulin glargine in Switzerland for Type 2 diabetes patients inadequately controlled on oral therapy.