Introduction: to evaluate the impact on the Italian National Health Service (NHS) budget of the recent introduction of the DPP-4 inhibitor vildagliptin in combination treatment for NIDDM patients. Methods: NIDDM patients eligible to vildagliptin treatment were identified and quantified based on approved indications and prevalence data review; adequate alternative strategies were identified; direct medical costs associated with competing strategies were calculated according to national practice and prices (drug acquisition, therapeutic monitoring, cost for managing severe adverse events – severe hypoglycemia events, fractures, new heart failure cases) and the NHS budgetary impact was estimated according to market penetration assumptions (base-case: 5% and 10% for the first and second year, respectively). Results: patients estimated eligible for vildagliptin in Italy are about 237,500: pts inadequately controlled with metformin monotherapy (166,500), pts inadequately controlled with sulfonylurea monotherapy and intolerant/contraindicated to metformin (70,200), and those inadequately controlled with thiazolidinedione monotherapy (800). Costing and comparing of the vildagliptin-based and competing strategies revealed differences in both directions, depending on patient subgroup. Assuming uniform penetration among identified patient subgroups, vildagliptin introduction is expected to raise NHS costs by 2,750,000 Euro in the first and by 5,500,000 Euro in the second year, respectively representing 1,6% and 3,2% of the estimated total management cost of this patient population. Conclusions: the introduction of vildagliptin in the treatment of Italian NIDDM patients offers a new therapeutic option for three inadequately controlled NIDDM subpopulations; the financial impact on Italian NHS expenditures depends on patient selection and can be expected not to exceed 2-3% of the currently dedicated budget in the first two years.