OBJECTIVES: In 2001 a new law was passed to allow Danish pharmacies to distribute dose dispensed medicine (DDM). Studies have shown that DDM can reduce medicine costs. Other studies have evaluated patient satisfaction and compliance. No studies have evaluated the health effects of DDM. The objective of this study was to describe the development in medicine costs; contacts to GPs; and hospital costs before and after starting on DDM. METHODS: National register analysis of patients receiving DDM from 2001 to 2004 (n=19,004). The data set included medicine use and costs (Danish Medicine Register), hospital admissions (Danish Patient Register), health care contacts and costs (Health Insurance Register). The analysis covers data from six months before and after first day of DDM. RESULTS: 3.464 patients are included in the 2003 analysis and 4.491 in the 2004 analysis. On average patients used 5.3 DDM and 1.1 medicines that could not be dose-dispensed. Approx. 25% of the total medicine costs were due to dispensing fees. The proportion of patients with GP contacts decreased (from 0.75 per month to 0.57). The average cost per patient on a semi-annual basis was 115.0 Euro before and 99.7 Euro after (2003 data). The proportion of patients hospitalised decreased from 0.06 per months before to 0.04 per months after (2003 data) and from 0.07 to 0.04 per months (2004 data). The average cost per patient on a semi-annual basis was 1445.0 Euro before and 882.0 Euro after (2003 data). The mean length of stay decreased (from 9 to 6 days) as well as the total number of hospital-days (from 15.397 to 5.909) (2004 data). CONCLUSION: The introduction of DDM resulted in an increase in medicine costs and a decrease in health care costs. Both the proportion of patients hospitalised and the length of stay in hospital decreased.