Many people with type 2 diabetes cannot maintain target blood glucose levels when taking a single oral drug. The purpose of this study is to assess the long-term safety and effectiveness of vildagliptin, an unapproved drug, compared to that of pioglitazone in lowering overall blood glucose levels when added to metformin in people with type 2 diabetes not at target blood glucose levels on metformin alone.

Inclusion Criteria:

• On a stable dose of metformin as defined by the protocol
• Blood glucose criteria must be met
• Body mass index (BMI) in the range 22-45

Exclusion Criteria:

• History of type 1 diabetes
• Pregnancy or lactation
• Evidence of significant diabetic complications
• Serious cardiovascular events within the past 6 months
• Laboratory value abnormalities as defined by the protocol
• Known sensitivity to pioglitazone
• Other protocol-defined exclusion criteria may apply