This paper presents a summary of the evidence review group (ERG) report into the clinical effectiveness and cost-effectiveness of liraglutide in the treatment of type 2 diabetes mellitus, based upon the manufacturer's submission to the National Institute for Health and Clinical Excellence (NICE) as part of the single technology appraisal process. The manufacturer proposed the use of liraglutide as a second or third drug in patients with type 2 diabetes whose glycaemic control was unsatisfactory with metformin, with or without a second oral glucose-lowering drug. The submission included six manufacturer-sponsored trials that compared the efficacy of liraglutide against other glucose-lowering agents. Not all of the trials were relevant to the decision problem. The most relevant were Liraglutide Effects and Actions in Diabetes 5 (LEAD-5) (liraglutide used as part of triple therapy and compared against insulin glargine) and LEAD-6 [liraglutide in triple therapy compared against another glucagon-like peptide-1 agonist, exenatide]. Five of the six trials were published in full and one was then unpublished. Two doses of liraglutide, 1.2 and 1.8 mg, were used in some trials, but in the two comparisons in triple therapy, against glargine and exenatide, only the 1.8-mg dose was used. Liraglutide in both doses was found to be clinically effective in lowering blood glucose concentration [glycated haemoglobin (HbA1c)], reducing weight (unlike other glucose-lowering agents, such as sulphonylureas, glitazones and insulins, which cause weight gain) and also reducing systolic blood pressure (SBP). Hypoglycaemia was uncommon. The ERG carried out meta-analyses comparing the 1.2- and 1.8-mg doses of liraglutide, which suggested that there was no difference in control of diabetes, and only a slight difference in weight loss, insufficient to justify the extra cost. The cost-effectiveness analysis was carried out using the Center for Outcomes Research model. The health benefit was reported as quality-adjusted life-years (QALYs). The manufacturer estimated the cost-effectiveness to be £ 15,130 per QALY for liraglutide 1.8 mg compared with glargine, £ 10,054 per QALY for liraglutide 1.8 mg compared with exenatide, £ 10,465 per QALY for liraglutide 1.8 mg compared with sitagliptin, and £ 9851 per QALY for liraglutide 1.2 mg compared with sitagliptin. The ERG conducted additional sensitivity analyses and concluded that the factors that carried most weight were: in the comparison with glargine, the direct utility effects of body mass index (BMI) changes and SBP, with some additional contribution from HbA1c, in the comparison with exenatide, HbA1c, with some additional effects from cholesterol and triglycerides in the comparison with sitagliptin, HbA1c and direct utility effects of BMI changes. The European Medicines Agency has approved liraglutide in dual therapy with other oral glucose-lowering agents. NICE guidance recommends the use of liraglutide 1.2 mg in triple therapy when glycaemic control remains or becomes inadequate with a combination of two oral glucose-lowering drugs. The use of liraglutide 1.2 mg in a dual therapy is indicated only in patients who are intolerant of, or have contraindications to, three oral glucose-lowering drugs. The use of liraglutide 1.8 mg was not approved by NICE. The ERG recommends research into the (currently unlicensed) use of liraglutide in combination with long-acting insulin.