Background <p>Dapagliflozin and empagliflozin are emerging as promising treatment options for diabetic kidney disease (DKD).</p> Objective <p>This study sought to evaluate the cost effectiveness of incorporating dapagliflozin and empagliflozin into the standard treatment for DKD in China.</p> Methods <p>A Markov model was constructed to evaluate the cost-effectiveness of dapagliflozin and empagliflozin plus standard treatment versus standard treatment alone for DKD treatment from a healthcare perspective. Costs and utility data was obtained from published literatures within the Chinese context. The primary outcome included total cost, quality-adjusted life-years (QALYs), and incremental cost-effectiveness ratio (ICER). GDP per capita of 2023 in China (¥89,358) was utilized as the willingness-to-pay threshold.</p> Results <p>Compared to standard treatment alone, add-on therapy of dapagliflozin or empagliflozin resulted in a higher total cost than those solely receiving standard treatment (+¥19,203.56 and +¥9496.92, respectively). However, both dapagliflozin and empagliflozin also yielded more life-years (+1.72 vs. +1.40) and QALYs (+1.40 vs. +0.88). The ICER per life-year and ICER per QALY was ¥11,178.52 and ¥18,192.50 for dapagliflozin and ¥6773.10 and ¥10,811.64 for empagliflozin, respectively. The incremental net monetary benefit was ¥75,120.54 and ¥68,994.90 for dapagliflozin and empagliflozin, respectively. Sensitivity analysis supported the main findings of the base-case analysis as the cost-effectiveness of dapagliflozin or empagliflozin was sustained for most plausible ranges of parameter values.</p> Conclusions <p>Considering that the ICER falls below the predefined willingness-to-pay threshold, incorporating dapagliflozin and empagliflozin into standard treatment for DKD is likely to be a cost-effective strategy in China.</p>