OBJECTIVE: In 2002 in Montenegro there was no efficient system to follow up the prescribing practice in outpatient clinics. The total expenses for drugs were so high that they threatened to diminish the whole system of drug supply. Therefore in 2003 at the whole Montenegro republic a system to follow up the drug prescribing in outpatient practice was implemented. METHODS: The system consisted of the central unit in the Republic health system in the Republic central health service, and the all pharmacies which give drugs on the prescriptions were covered financially by the Republic health centre. System started on January 1,2004; System contains bases with all drugs on market in Montenegro, all doctors, pharmacists, drug users and enables to follow the drugs way from each doctor to the patient. At the same time the Republic health centre introduced the new list of drugs refunded by the Republic health centre. The list of drugs refunded by the Republic health centre so called positive list covered all important drugs, and was prepared in accordance to new pharmacotherapeutic guidelines. ATC/DDD classification of drugs was used.RESULTS: Analysis performed one year after implementation showed that the use of drugs significantly decreased(15,68%) when compared with 2002. Expenses were 1,5 mil E lower than in 2002/2003. From the all drugs, the most often issued drugs were for arterial hypertension and for tonsilopharingitis, more than 25% of all prescriptions. The structure of drugs prescribed was improved when compared with the pre-implementation period. CONCLUSIONS: Permanent monitoring and periodic analyses of informations obtained from an information system in the future will improve rationalization of the drug prescribing. Monitoring and analyses will show if some other administrative measurements are needed to keep this positive trend on.