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OBJECTIVES Electronic health records (EHR) provide a valuable resource for assessing drug side-effects, but treatments are not randomly allocated in routine care creating the potential for bias. We conduct a case study using the Prior Event Rate Ratio (PERR) Pairwise method to reduce unmeasured confounding bias in side-effect estimates for two second-line therapies for type 2 diabetes, thiazolidinediones and sulfonylureas, . STUDY DESIGN and settings. Primary care data were extracted from the Clinical Practice Research Datalink (n=41871)