For any disease, it is important to consider whether new treatments, which may be more effective but also more expensive, are worth paying for compared with treatments that are already being used. This is called a cost-effectiveness analysis and helps health authorities and other organisations (such as insurance companies) that pay for medications to decide whether or not to pay for the new treatment. Cost effectiveness differs between individual countries because each has its own health system, health costs and approved treatments. Semaglutide is a type of medication called a glucagon-like peptide-1 receptor agonist (or GLP-1RA) that is used by people with type 2 diabetes to help control their blood glucose (sugar). Semaglutide is administered by injection but has recently become the first GLP-1RA to be available in a once-daily oral (tablet) form. We used information from the Swedish Institute for Health Economics and two clinical trials of oral semaglutide that compared it with other oral glucose-lowering drugs—empagliflozin and sitagliptin—to work out whether oral semaglutide was a cost-effective treatment in Sweden. We found that oral semaglutide was more expensive than empagliflozin and sitagliptin over the entire time on treatment but also led to greater lowering of blood sugar. This means that patients had fewer other illnesses linked to diabetes and lower health costs as a result. Balancing the higher upfront cost of the drug versus savings from fewer illnesses linked to diabetes, we found that in Sweden, oral semaglutide was cost effective compared with empagliflozin and sitagliptin.