Asthma is a chronic pediatric disease characterized by inflammation of the airways. The objectives of this study were to explore risk factors for asthma incidence, estimate the effects of exposure to anti-allergic medication on asthma incidence in a patients suffering from atopic dermatitis or allergic rhinitis and to explore the impact of these medications on asthma cost. Continuously eligible newborn children in GA Medicaid and MarketScan were included in the exploratory analysis. Asthma risk factors of interest such as diagnosis of atopic conditions and such were assessed. For the treatment exposure, continuously eligible newborn children with a diagnosis of atopic dermatitis (ICD-9-CM=691.8, 692.9 and 373.3) OR allergic rhinitis (ICD-9-CM=477.**) were studied. Exposure to anti-inflammatory agents such as first generation, second generation antihistamines (FGAH, SGAH), intra-nasal steroids (INS) was recorded. Cox Proportional Hazards models along with sample selection methods were used to explore the impact of these agents on asthma incidence. Impact of these agents on annual treatment costs was also explored. The exploratory analysis suggested that patterns of asthma development follow certain patterns. While maternal asthma, lower respiratory tract infections were significant risk factors for asthma, the impact of atopic disease could not be refuted or established. Asthma incidence was 8.46% and 3.44% in GA(N=79,957) and the commercial AD/AR cohort(N=16,051). In GA AD/AR, exposure to all anti-inflammatory agents (vs. no exposure) reduced the likelihood of a diagnosis of asthma by 92% and was significantly protective in the commercial cohort was well.. However, exposure to only FGAH increased the risk for an asthma diagnosis in commercial AD/AR. In GA Medicaid, exposure to any agent was associated with a non-significant lower net per member per year(PMPY) mean total cost of $ -87 and in the commercial exposure was associated with a non-significant reduction in mean PMPY net costs by $ 546. Asthma is associated with a set of risk factors that is fairly stable across different populations. Exposure to anti-inflammatory agents seemed to reduce the risk of an asthma diagnosis in groups of children suffering from AD or AR. This set of information can be used to formulate intervention programs against asthma development. Keywords: Asthma, risk factors, atopic dermatitis, allergic rhinitis, first generation and second generation anti-histamines, intra-nasal steroids, costs, Medicaid, MarketScan