A method of pharmacoepidemiologic data analysis that utilizes computerized Medicaid data is presented. A cohort design in which Medicaid enrollees receiving drugs that are normally used to treat similar underlying conditions is described. A period of time in which Medicaid service transactions are evident is required before an individual is eligible for selection into a cohort. Selection of study subjects and descriptions of cohorts are based on Medicaid service histories occurring during the preliminary, prerequisite period. Time at risk is considered to begin after a prescription for a study drug is dispensed and continues until either a refill is dispensed, a prescription for an alternative drug within the same therapeutic class is dispensed, or a predetermined number of days has passed. Subjects are followed forward in time and relevant health care transactions that are suggestive of suspected adverse drug reactions are noted. Incidence densities associated with sequentially ranked prescriptions within sequential courses of therapy are compared. Methods to increase the accuracy of case ascertainment are briefly discussed. Separate validation studies may be used to evaluate the validity of computerized case ascertainment methods and to compensate for misclassification of outcome. The proposed method is intended to provide timely estimates of risk for selected outcomes. For outcomes that cannot be accurately ascertained from computerized data, this method may be useful in determining the feasibility of more customized studies.