To perform a health economic analysis on treatment with irbesartan in patients with type 2 diabetes and hypertension. A Markov model was adapted to the Hungarian setting to simulate renal deterioration from the development of microalbuminuria to nephropathy, doubling of serum creatinine, end-stage renal disease (ESRD) and all-cause mortality. Outcomes for two treatments were evaluated: (1) a placebo regimen of standard antihypertensive medications, and (2) the addition of irbesartan 300 mg administered daily, with both treatment initiated after developing microalbuminuria. Outcomes were discounted at 5% annually to correspond with national guidelines. Treatment with irbesartan was estimated to improve undiscounted life expectancy by 0.98 +/- 0.05 years, reduce the cumulative incidence of ESRD by 7.5 +/- 0.4%, and reduce lifetime costs by Hungarian Forints (HUF) 519,993 +/- 70,814, compared to placebo. Irbesartan was projected to improved life expectancy and reduce costs compared to placebo in the Hungarian setting in hypertensive patients with type 2 diabetes and microalbuminuria.