OBJECTIVES: In 2009, the price of colchicine, an anti-gout agent that is also used to treat familial Mediterranean fever, skyrocketed, surprising physicians, patients, and payers. Objectives are to (1) determine the cost consequence to the U.S. Medicaid programs of this price rise and (2) explain why it occurred. METHODS: Medicaid drug utilization data were used to identify all colchicine products from 2000 quarter 1 through 2010 quarter 1. The first five digits of each product’s NDC code were used to identify the manufacturer.  A retrospective, descriptive analysis was conducted to determine the trends of colchicine utilization (prescriptions and tablets), spending (in 2009 US$), and reimbursement per tablet as a proxy for price. RESULTS: Colchicine utilization by Medicaid enrollees increased from 2000 to 2005, reaching 417,000 prescriptions (18 million tablets, $4.5 million). Following Medicare Part D and the movement of dual eligibles from Medicaid to Medicare, Medicaid colchicine utilization dropped 72% in terms of number of prescriptions.  The average spending for colchicine not marketed by URL Pharma increased from $0.27 per tablet in 2000–2009 to $0.35 in the first quarter of 2010 (30% increase), while the Colcrys® price (URL’s branded drug) rose from $0.29 in 2000–2008 to $3.79 in 2009–2010 (12-fold increase). It is estimated that an additional $21 million could be added to Medicaid spending if all patients on single-ingredient colchicine treatment switched to Colcrys®. CONCLUSIONS: The rise in price is an unintended consequence of a drug-safety initiative launched in June 2006 by the U.S. Food and Drug Administration (FDA) to phase out unapproved drugs, including single-ingredient oral colchicines. Meanwhile, the FDA granted approval to URL Pharma in July 2009, inadvertently creating a monopoly in the anti-gout market.  If additional drugs are not approved to stimulate competition, a substantial financial burden will be placed on patients and taxpayers.