OBJECTIVES: Atopic dermatitis (AD) has been associated with atopic manifestations (AMs), such as food allergy, asthma, allergic rhinitis, and allergic conjunctivitis.  To estimate the incremental costs attributable to AMs in patients with AD, and examine the factors associated with incremental costs. METHODS: This retrospective cohort study used MarketScan® research databases from January 1, 1999-June 30, 2004. Patients were considered to have AD if they had at least 1 medical claim with a primary or secondary diagnosis of AD (ICD-9-CM codes 691.8x or 692.9x). To create comparable study cohorts, patients with AD were matched with non-AD patients using propensity scores. The relative risks (RR) of developing AMs in the AD and non-AD cohorts were estimated using competing risk-survival analysis after adjusting for the study variables.  The annual incremental cost attributable to AMs in these AD patients (AD+AM) was calculated, and 95% confidence intervals (95%CI) were calculated using the bootstrap method. Differences in usage patterns and treatment costs between AD patients with AM vs. AD only were analyzed using 2-part model. RESULTS: Patients with AD were significantly more likely to develop AMs than patients without AD (21.8% vs. 16.9%, RR=1.33, 95%CI=1.28-1.38).  The annual AD+AM treatment costs for patients with AD increased substantially after they developed AMs. The additional financial burden attributable to AMs was estimated to be $482 per year, an almost 1.5-fold increase compared to AD cost alone (from $338 before AM development to $820 afterward, P<0.001) with approximately equal distribution of costs between medical services($243) and prescription drugs($239). The largest incremental costs were observed in asthma($973), followed by allergic rhinitis($341). CONCLUSIONS:Patients with AD are significantly more likely to develop AM compared to patients without AD. The total treatment costs for AD patients who developed AMs were nearly 2.5 times the total treatment costs for patients with AD alone.