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OBJECTIVE: This study aimed to examine the extent and type of variation in antipsychotic prescription patterns between African American and Caucasian patients with schizophrenia. METHOD: Subjects were 2,515 adult Medicaid recipients treated for schizophrenia in 1995 with one of four types of antipsychotic medication (traditional antipsychotics, clozapine, risperidone, or depot antipsychotics). Prescription and mental health service use data were collected from Medicaid claims files for the 12 months following the first filled antipsychotic prescription. Patterns of antipsychotic prescription were compared for African American (N=1,538, 61%) and Caucasian (N=977, 39%) subjects. RESULTS: African American subjects were significantly younger and more likely to receive Supplemental Security Income than were the Caucasian subjects, who received mental health services more continuously. African American subjects were less likely than Caucasian subjects to receive clozapine (8% versus 15%, respectively) and risperidone (25% versus 31%) and more likely to receive depot antipsychotics (26% versus 14%). The likelihood of receiving clozapine or risperidone remained significantly different after demographic and service use characteristics were controlled. CONCLUSIONS: This study found ethnic disparities in antipsychotic prescription patterns among a large number of publicly insured clients treated for schizophrenia. Given the rapidly changing pharmacological treatment environment, these findings have significant implications for differential quality of care for African American patients. Future studies employing client and provider characteristics are urgently needed to test alternative explanations for ethnic disparities.