Angiotensin II receptor antagonists (angiotensin II receptor blockers; ARBs) are a class of antihypertensive drugs that are generally considered comparable to ACE inhibitors in the prevention of heart and kidney failure. However, these two classes of agents do interfere in different stages of the renin-angiotensin system. In patients with type 2 diabetes mellitus, advantages for ARBs over conventional (non-ACE inhibitor) therapy on progression from micro- to macroalbuminuria and overt nephropathy and end-stage renal disease have been shown in clinical trials. In patients with type 2 diabetes and end-stage renal disease, the need for dialysis and/or transplantation results in the use of major healthcare resources. This paper reviews the available economic evidence on treatment with ARBs in type 2 diabetic patients with advanced renal disease.Within-trial analytic and Markov model economic evaluations of the RENAAL (Reduction of Endpoint in Non-insulin dependent diabetes mellitus with Angiotensin II Antagonist Losartan), IDNT (Irbesartan Diabetic Nephropathy Trial) and IRMA (IRbesartan in type 2 diabetes with MicroAlbuminuria)-2 studies suggest that treatment with ARBs in patients with type 2 diabetes with overt or incipient nephropathy confers health gains and net cost savings compared with conventional (non-ACE inhibitor) therapy. For reimbursement and reference pricing decisions, there is a need for a head-to-head comparison of an ACE inhibitor with ARBs to model all possible costs and effects of ACE inhibitors and ARBs. This will result in a proper pharmacoeconomic outcome, where both types of drugs can be compared for healthcare decisions.