The base-case analysis with a reduction of HbA1c levels of 0.9% and a severe hypoglycaemic event rate of 18.7 episodes per 100 person years reduced by 50%, over a time horizon of 50 years, produced an ICER of £37,712 per QALY gained for CSII compared with MDI therapy. Changing the reduction in the rate of severe hypoglycaemia events to 0% or 75% did not change the ICER significantly. With the higher baseline rate of severe hypoglycaemia assumed in the manufacturers' submission (designated as academic in confidence; see section 4.1.6), a 50% reduction, and baseline HbA1c levels reduced to 7.9% from a baseline of 8.8%, the ICER was £36,587 per QALY gained. When a greater reduction in HbA1c levels of 1.4% was assumed, with no reduction in severe hypoglycaemic event rates, the ICER was £24,720 per QALY gained. In the cohort with good glycaemic control, when there was assumed to be no improvement in HbA1c levels but the severe hypoglycaemic event rate was 134 per 100 person years, the ICER was £273,992 per QALY gained for a 50% reduction and £152,058 per QALY gained for a 75% reduction in severe hypoglycaemia rate. Avoidance of severe hypoglycaemic events can lead to quality of life gains by avoiding the disutility of the event itself and because of the reduced fear of such events. In the scenario with a 0.9% decrease in HbA1c from a baseline of 8.8% and a 50% reduction in the rate of severe hypoglycaemia events from that in the manufacturers' submission, which was associated with an ICER of £36,587, an assumed annual 0.01 quality of life increment in the CSII arm decreased the ICER to £29,300 per QALY gained. When the assumed quality of life increment was 0.03, the ICER decreased to £21,000 per QALY gained. In the cohort with good glycaemic control, when there was assumed to be no improvement in HbA1c levels, the severe hypoglycaemic event rate was 134 per 100 person years, an annual quality of life increment of 0.05 was assumed and a reduction in the rate of severe hypoglycaemia events by 50%, the ICER was £28,600 per QALY gained. For the same cohort but with a 75% reduction in severe hypoglycaemia events, and an annual quality of life increment of 0.04 the ICER was approximately £31,300 per QALY gained.