OBJECTIVES: To compare pharmacotherapy and health care expenditures by race for asthma patients in a Medicaid population. METHODS: This analysis used the MarketScan(r) claims and eligibility data for a multistate Medicaid population between 1999 - 2000. Because Medicaid eligibility is updated monthly, 24 monthly files were constructed to capture all Medicaid asthmatic patients in 1999 and 2000. Patients were included in the study if they had an asthma diagnosis or prescription for an asthma-related drug in any given month. Patients were grouped by race, a variable often not found in health care claims data sets. Type of pharmacotherapy, demographics, health status, health care utilization, and expenditures were measured to assess differences between the racial groups. Descriptive analysis was used to determine medication use and health care costs across racial cohorts. RESULTS: A total of 2,724,008 subjects were eligible for evaluation over the 2 year observational period. Overall, patients used 1.8 times as many rescue medications compared to long term controller medications per month. Hispanics used 2.5 times more rescue medications. African-Americans (AA) used 2 times more rescue medications, and Caucasians used 1.6 times more rescue medications. Compared to Caucasians, asthma-related drug expenditures were 20% and 69% lower for AA and Hispanics respectively. However, asthma-related inpatient costs were 94% higher for AA and 58% higher for Hispanics compared to Caucasians. Similarly, asthma-related emergency room (ER) costs were 48% higher for AA and 13% higher for Hispanics compared to Caucasians. Overall, the largest component of the asthma care among all groups was pharmacotherapy, at 50% of total asthma expenditures ($64 per month). CONCLUSIONS: Long-term controller asthma medications were underused by all, but more so among minorities. This difference in use was reflected in the cost of inpatient and ER asthma care across the racial cohorts.