Since 1980, many Medicaid programs have instituted, adjusted, or abolished pharmaceutical copayments or limitations on the number of prescriptions per patient (caps). Studies indicate that prescription caps can harm patients and increase Medicaid costs. However, because there is little information on how state policy makers select and evaluate such policies, in-depth telephone interviews were conducted with key informants in Medicaid programs that had recently made changes in cost-sharing policies. Among the barriers to evidence-based policy making were lack of political power, skills, and infrastructure; crisis-oriented decisions; compartmentalized budgeting; lack of advocates for disadvantaged patients; and the absence of timely research. Research was applied successfully when the interests of patient advocates and the drug industry were aligned and when Medicaid analysis were able to identify and communicate relevant research to policy makers at the time, or "teachable moment," that policy was being changed.