OBJECTIVES: To review the health care expenditures of patients with comorbid allergic rhinitis (AR) and asthma, and determine if AR treatment offsets the costs of asthma of these patients. METHODS: A retrospective analysis was performed using the MarketScan claims databases. The study population consisted of privately insured and Medicare patients diagnosed with AR (N = 347,363) in 1999 or 2000. Patients with at least two outpatient prescriptions for asthma medication, or a diagnosis of asthma and at least one outpatient prescription for asthma medication, were classified as having asthma. Asthma-related health care expenditures were accumulated over a 12-month follow-up period. Expenditures among treated AR patients were compared to untreated AR patients. RESULTS: Approximately 16% of AR patients had comorbid asthma. The majority (90.8%) of these patients received at least one AR treatment of a nonsedating antihistamine, inhaled nasal corticosteroid, or inhaled antihistamine during the 12 month follow-up period. Patients without AR treatment had mean annual asthma-related emergency room (ER), inpatient, and outpatient expenditures of $24 (127 S.D.), $201 (3340 S.D.), and $240 (561 S.D.), respectively. Compared to untreated AR patients, persons receiving AR treatment had significantly lower mean annual asthma-related costs (p <0.05) for ER, inpatient and outpatient expenditures, $18 (151 S.D.), $114 (1575 S.D.), and $181 (588 S.D.), respectively. Costs of outpatient prescription drug for asthma were higher among AR-treated patients than untreated ($447 vs. $355, p <0.05), nevertheless, mean total asthma costs for AR-treated patients were $760 (1931 S.D.), significantly lower than for untreated patients, $820 (3515 S.D.). AR-treated asthma patients also had lower asthma expenditures compared to the untreated after controlling for differences in demographics, comorbidities, and asthma severity. CONCLUSIONS: Asthma is a common comorbidity of AR. Use of AR drug treatment may offset some asthma expenditures.