As policymakers debate adding a prescription drug benefit to Medicare, they must also seek ways to promote cost-effective use of drugs and minimize inappropriate prescribing. For more than a decade, all state Medicaid agencies and most private insurers have used computerized drug utilization review (DUR) programs to prevent or rectify potential prescribing errors. DUR can be retrospective, in which claims data are reviewed to identify patterns of drug use, or prospective, in which prescriptions are reviewed before a drug is dispensed. This Issue Brief summarizes a landmark study that suggests that retrospective DUR has had no measurable effects on outpatient drug use or clinical outcomes in the Medicaid program.