Analysis of drug utilization is an important factor in promoting rational pharmacotherapy. The aim of this paper was to present and analyse prescribed medication consumption in community pharmacies in Serbia, during 1996 and 1997. Results of this analysis were expressed as defined daily doses (DDD/1000 inhabitants/day). It was shown that in both years the same five drugs comprised the five most frequently prescribed. The most frequently prescribed was the anxiolytic, diazepam (15.62 in 1996; 14.71 in 1997) with a trend of decreasing consumption. The second drug was indapamide also decreasing in use (14.20; 11.91), although its pharmacodynamic characteristics are not enough justification for its dominant position among antihypertensives. In the third position, in both years, was the H(2)-receptor antagonist ranitidine (6.01; 5.31). The next most prescribed drug in both years was ampicillin (3.30; 3.11). Decreased consumption in 1997 of the oral form of penicillin with an extended spectrum is encouraging, although consumption has still been high and this demands additional efforts from the health professionals. In the fifth position was cephalexin (2.45; 2.43) which indicated that antiinfectives for systemic use in both years increased the budget of health insurance. The decrease in utilization of certain drugs during 1997 in comparison with 1996, was a consequence of medical factors (partial rationalization of pharmacotherapy), and non-medical factors (periodic deficiency of certain drugs). Copyright (c) 2000 John Wiley & Sons, Ltd.