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This study investigated hydroxyurea use in people with sickle cell disease (SCD) outside of a research setting. Pharmacy data, outpatient visits, hospital admissions, and length of stay were assessed for all patients with SCD enrolled in a Medicaid managed care organization in Maryland. Three hundred and ninety (390) people with SCD were covered between the years 2001–2005. A large majority (85.9%) never had a claim for a hydroxyurea refill. Hydroxyurea users had higher admission rates than non-hydroxyurea users (5 vs. 1.5, p=.004). Patients who were in the highest tertile of refills of hydroxyurea had significantly fewer hospital admissions than patients in the lowest tertile (2.44 vs. 7.57, p=.043). Patients with the lowest hydroxyurea refill usage had significantly higher mean costs per month enrolled than those with the highest number ($4,553 vs. $2,017, p=.031). Hydroxyurea was underutilized in this patient population. Patients with more regular refills of hydroxyurea had fewer admissions to the hospital and markedly decreased costs.