Hydroxyurea Capsules IP 500mg is a prescription drug used to treat certain types of cancers and certain conditions such as sickle cell anemia. It works by blocking the production of certain proteins that are involved in the growth and division of cancer cells. It also works by decreasing the amount of certain types of red blood cells that can lead to sickle cell anemia. Common side effects of this medication include nausea, vomiting, and loss of appetite.