OBJECTIVES We sought to evaluate the impact of pharmacy cost-containment policy actions by state Medicaid programs on cost-related underuse of medicine, controlling for concurrent non-pharmacy cost-containment policy actions and socio-environmental differences among states. METHODS We used the data from the 2003 Community Tracking Study (CTS) household survey, and linked them with the census demographic data and the cost containment policy actions based upon 50 States Surveys on state Medicaid spending growth and cost containment policy actions by the Kaiser Family Foundation in 2003. A cross-sectional study was performed to evaluate the impact of policy actions, by comparing Medicaid beneficiaries to non-Medicaid-pharmacy-cost-containment-action-eligible residents. The outcome measures included: patients do not receive needed medical care, patients cannot afford needed prescriptions, patients postpone needed medical care, and patients worry about the medical care cost. The outcomes were analyzed using logit model, with prior authorization, generic drugs required, copayment method, step therapy of fail-first requirement, limit on number of prescriptions and number of refills per month, preferred drug list, over the counter coverage, and prescription drug payment practices (payment and purchasing policies) as predictors. Additionally, non-pharmacy cost-containment policy actions, patients' demographics and states' socio-environmental variables were controlled. RESULTS On average, each state has implemented 6.5% pharmacy cost containment policy actions in 2003. Only the worrying about costs was statistically significantly associated with individual pharmacy cost-containment policy action; however, such significance disappeared after other concurrent pharmacy cost-containment policy actions were controlled for. When the total number of pharmacy cost-containment policy actions was entered in the regression instead of individual policy action, each incremental policy action was associated with 14% increase in odds ratio for unmet medical needs (p=0.003), and 5% increase in odds ratio for postponing medical needs (p=0.02). CONCLUSIONS There was variable impact of pharmacy cost-containment policy actions when assessed concurrently, and collectively.