OBJECTIVE: To assess the clinical and economic benefits of atorvastatin for Canadian patients with type 2 diabetes from a Canadian Ministry of Health perspective. METHODS: A Markov cost-effectiveness model based on the clinical outcomes of the Collaborative Atorvastatin Diabetes Study was populated with a hypothetical cohort of patients with type 2 diabetes and no history of cardiovascular (CV) events, receiving 10 mg/day atorvastatin or placebo. Model inputs were retrieved from published literature and public data sets. The time horizon was 5 years, with additional projections for 10 and 25 years. Deterministic and probabilistic sensitivity analyses were performed. RESULTS: Over 5 years, patients treated with atorvastatin experienced fewer CV events, gained 0.02 quality-adjusted life years (QALYs) on a per-patient basis and had 1% fewer deaths vs. placebo, at an additional cost of $1388 per patient. The incremental cost-effectiveness of atorvastatin was $70,773 (95% CI $33,981-$195,914), $12,687 (95% CI dominant-$66,048) and $1,362 (95% CI dominant-$49,432) per QALY at 5, 10 and 25 years, respectively. The model was sensitive to variations in hazard ratios for CV events, age, systolic blood pressure and cholesterol levels. CONCLUSIONS: This study supports the cost-effectiveness of atorvastatin for the primary prevention of major CV events in patients with type 2 diabetes.