OBJECTIVES: The objective of this study was to examine racial differences in total and prescription related health care costs and service utilization associated with adjuvant hormonal therapy in women with primary breast cancer. METHODS: This was a retrospective cohort study of Medicaid enrollees with hormone receptor positive breast cancer newly starting adjuvant hormonal therapy. The study used North Carolina Medicaid data, which was linked to the North Carolina Cancer Registry.  The patients were followed for one year after commencing the index medication (tamoxifen or aromatase inhibitor) to collect the data on medication utilization, healthcare costs, hospitalization and emergency department (ED) visits. RESULTS: In this cohort of 609 women with primary breast cancer, mean total health care costs was $14,513.31 (SD= $15,233.17), which did not differ significantly across the racial groups [white = mean (SD) $15,261.13 ($16,225.15); black = mean (SD) $13,580.61 ($13,870.34); p > 0.05]. Overall mean prescription related costs were $4612.18 (SD = $3509.59) with white patients having a significantly higher costs [mean (SD) = $5000.51 ($3582.29)] as compared to black patients [mean (SD) = $4127.85 ($3360.83] (p<0.05). After controlling for select background variables, prescription related costs remained significantly higher in white patients [p <0.05]; however total health care costs did not differ significantly across the racial groups [p > 0.05]. The likelihood of hospitalization was significantly lower by 33% in black patients as compared to white patients after controlling for select background variables (p <0.05). Black race was associated with a 3% increase in the likelihood of an ED visit; however the difference was statistically insignificant (p <0.05). CONCLUSIONS: In this study white patients had lower non-prescription related costs as a result of lower service utilization. Higher medication compliance in white patients may drive prescription related costs upwards but may consequently reduce the total health care costs.