In Type I diabetes, conclusive evidence exists that intensive insulin strategies can achieve normal or near normal blood glucose levels and, as a result, reduce the risk of major complications and produce major benefits in years of life, years of sight, and years free from end-stage renal disease and amputation. The evidence in Type II diabetes is less clear but claims are made that insulin-based strategies should be started earlier, even at initial diagnosis. Intensive strategies have also been shown to improve survival in diabetic patients with acute myocardial infarction. The economic implications of introducing intensive insulin-based strategies have assumed different rates of obesity and patients currently receiving insulin. Since the costs of an intensive insulin-based strategy are approximately 50% more than conventional strategies, the average cost per diabetic patient will increase by half the percentage increase in patients receiving intensive therapy. It is argued that the extra costs incurred by the switch in therapy are likely to be offset by savings made as a result of reductions in expensive episodes of care, such as hospitalisation. In addition, evidence exists to show that such a switch is cost effective in generating additional life years and quality adjusted life years for diabetics.