OBJECTIVES: Allergic rhinitis (AR) affects 10-20% of the US population, with treatment costs exceeding $6 billion annually. US practice guidelines suggest treatment with a combination of intranasal corticosteroids and antihistamines.  MP29-02 is intranasal formulation of azelastine hydrochloride and fluticasone propionate in an advanced delivery system indicated for the relief of symptoms of seasonal AR (SAR). Patients treated with MP29-02 experience significantly greater symptom relief in comparison to first-line therapy in trials.  OBJECTIVE: To use an economic model to calculate the per-member per-month (PMPM) budget impact on a US health insurer of moving MP29-02 from third-tier to second-tier pricing and reimbursement. METHODS: Population is SAR sufferers seeking treatment. MP29-02 is assumed to gain market share annually with second-tier pricing. Time horizon is one year and five years. Perspective is a US health plan with 500,000 enrollees. BIA is a pharmacy cost impact model using data from literature and supplied by Meda. Model assumes 10% branded drug price inflation; 80% brand to generic share shift and 50% price reduction; tiered payer rebate percentages and patient copay amounts. RESULTS: Estimated treated SAR population ranged from 63,165 at baseline to 68,630 in Year 5.  Branded share of fluticasone-based products declined from 17% to 7%.  Overall SAR treatment budget declined from $3.2 million annually at baseline to $3.1 million in Year 5 reflecting expected shift from branded to generic market share.   According to baseline assumptions, marginal change in costs over the one-year time horizon from moving MP29-02 from third-tier to second-tier pricing are $19,659 (<$0.01 PMPM).  Costs associated with the 5-year horizon, given changes in market shares, are $97,342 ($0.01 PMPM). CONCLUSIONS: MP29-02 offers an appropriate means of adhering to AR practice guidelines and improving outcomes, and this BIA model shows that the added costs of those benefits are minimal to US payers.