Drug formularies, designed to encourage more clinically effecttive and cost effective prescribing, are now in widespread use in the secondary care system in the UK. Amongst their disadvantages, formularies are expensive to produce and require regular updating and policing. In addition, formularies do not consider alternate non-prescribing cost containment measures, and over-rigid application of formulary systems may alienate senior medical staff. In order to maximize the acceptability of formularies to all doctors, it is essential that the local Drugs and Therapeutics Committee has wide representation and focuses on clinical efficacy rather than simply on cost. Realistically, it is important that formulary committees are sufficiently flexible to allow the introduction of innovative, albeit expensive, new compounds. Enforcement of formularies into general practice is not presently achievable, but many primary care teams, realizing the benefits, have successfully introduced their own formularies to improve clinical drug usage and cost containment. If a reduction in costs is the primary aim, the global introduction of formulary systems may not be the best solution, and specific targeting of drug therapy may prove a more effective alternative. Indeed, in the South Glamorgan Health Authority, the introduction of a targeting system for the ten therapeutic areas with the highest expenditure allowed substantial savings to be made.