The prevalence of diabetes and cost of associated treatment are steadily increasing, as is the resulting burden on healthcare systems worldwide. Current treatment recommendations for Type 1 and Type 2 diabetes advise a prominent role for basal insulin. We examined the published health-economic literature pertaining to the basal insulin analog insulin detemir (IDet) to determine whether IDet is a cost-saving and/or cost-effective treatment for suboptimally controlled Type 1 or Type 2 diabetes. A total of 15 modeling studies were assessed, most of which found IDet to be cost effective compared with neutral protamine Hagedorn and as cost effective as insulin glargine. Those that did not find IDet to be cost effective set the disutility of hypoglycemic events to almost zero or assumed a higher dose of IDet with no difference in treatment effect, ignoring the clinical benefits and cost savings associated with IDet in studies demonstrating comparable or superior glycemic control with less hypoglycemia versus other basal insulins. The evidence suggests that IDet is cost effective versus neutral protamine Hagedorn and at least as cost effective as insulin glargine in the treatment of patients with suboptimally controlled Type 1 and Type 2 diabetes.