The analysis comes two years after Wang and his colleagues reported that hydroxyurea reduced episodes of acute pain and pneumonia-like illness, eased other symptoms, reduced the need for blood transfusions and cut hospitalizations for infants and toddlers with sickle cell anemia. Sickle cell anemia is the most common and severe form of sickle cell disease.Earlier studies had demonstrated that adults and adolescents with the disease benefited from hydroxyurea. BABY HUG showed the drug, which is inexpensive and easy to administer, was safe and effective for young children. The study involved 193 children who were 9 to 18 months old when they enrolled at one of the 13 participating medical centers. The children were randomly assigned to receive either a daily dose of hydroxyurea for two years or an inactive look-alike. Continued concern about U.S. health care spending prompted BABY HUG researchers to retrospectively assess hydroxyurea's impact on treatment costs. Investigators used a national database of Medicaid expenditures to estimate the 2009 cost of caring for BABY HUG participants. Medicaid is the state-federal health insurance program that covers lower income and disabled children and adults. The six-year BABY HUG study ended in 2009. The results showed that hydroxyurea was associated with higher outpatient costs, but lowered overall expenditures. Children who received the drug were hospitalized 232 times during the study, compared to 324 hospitalizations for those in the placebo group. The estimated annual treatment cost $11,072 for children who received hydroxyurea compared to $13,962 for children who received the placebo. Wang said actual savings associated with hydroxyurea treatment are likely greater, since medical costs are roughly 25 percent less for children enrolled in Medicaid than for those with private health insurance. The analysis was unable to capture all treatment-related costs. "The analysis also could not capture the anxiety patients and family experience when children must be hospitalized," Wang said.