Many socio-economic factors and health care system related issues impact the outcome of diabetes and consequently its costs and vice versa. Factors that influence delay in diagnosis also determine complication rates and thus costs. Presence and severity of complications as well as co-morbid conditions are the most important determinants of treatment and monitoring regimen as well as the need for hospitalization and are therefore important factors related to costs. The average annual direct costs of hospitalized patients are more than double to those not hospitalized. Complications are also responsible for indirect costs in terms of productivity loss and absenteeism. Our studies show that the cost of providing routine care is only a fraction of the overall costs and is perhaps still manageable; however when this is not available or its quality is poor the overall direct and indirect costs, escalate with disastrous health and economic consequences to the individual, his family and society. Effective intervention means prevention both primary (health promotion and awareness) as well as secondary prevention (reducing the burden of complications by early diagnosis and effective care). Everyone involved in diabetes care need to be aware of what drives cost: proper effective treatment of diabetes is not but not treating diabetes or treating it ineffectively is very costly.