OBJECTIVES: Pharmacy Information System (PIS) in hospital pharmacies can optimize the institutional Pharmacy Benefit Management Program (PBMP) and patients' outcomes if the PIS has high detection and reporting capabilities. The aim of the study is to explore and investigate the PIS capabilities in tertiary and secondary hospitals in Riyadh city, Saudi Arabia.  METHODS: A cross-sectional survey targeted pharmacy mangers in hospital with inpatient and outpatient pharmacies in Riyadh City in 2014. The survey gathered information about PIS characteristics such as detection capabilities (drug interactions, drug allergy, etc.), drug utilization reporting capabilities, and PIS integration with Electronic Medical Record (EMR) Computerized Physician Ordered Entry (CPOE). RESULTS: Of 30 hospital pharmacies, 23 (76.6%) pharmacy managers responded, only 21(70%) hospital pharmacies met the inclusion criteria, 15 (71.4%) are governmental and 6 (28.6%) are private hospitals, 18(85.7% ) hospitals have EMR, 19 (90.5%) hospital pharmacies have PIS. Of the 14(66.67%) hospitals with CPOE, only 9 (64.2%) have CPOE that are integrated with inpatient and outpatient PIS. For the PIS capabilities, out of the 21 hospitals; 8 (38.1%) were able to detect incorrect dose and duration, 7 (33.3%) for drug-drug interaction, 5(23.8%) for drug-disease Interaction, 6 (28.6%) for contraindication, 6(28.6%) for the formulary non-adherence and 8 (38.1%) for early refill detection. Only six (28.6%) hospitals with PIS have the capability to generate four types of reports(ranking physicians by utilization, drug they prescribe, most utilized drug by number of patients, most utilized drug by diagnosis).    CONCLUSIONS: Adopting PIS in Saudi hospitals is improving comparing to 2003 study, however, the integration of the EMR and CPOE still not to the expected level. To ptimize the institutional Pharmacy Benefit Management Program (PBMP), the detection and reporting capabilities of the PIS should be improved to facilitate prescribing decision making process, and to improve concurrent, prospective, and retrospective drug utilization review process.