Drug-related problems include medication errors (involving an error in the process of prescribing, dispensing, or administering a drug, whether there are adverse consequences or not) and adverse drug reactions (any response to a drug which is noxious and unintended, and which occurs at doses normally used in humans for prophylaxis, diagnosis or therapy of disease, or for the modification of physiological function). Furthermore, adverse drug events can be defined as an injury--whether or not causally-related to the use of a drug. Drug-related problems are relatively common in hospitalised patients and can result in patient morbidity and mortality, and increased costs. In order to get an overview of studies on drug-related problems in hospitalised patients, with specific attention to the incidence of drug-related problems and their costs, to the possibilities of prevention and to the effect of these interventions, we performed a literature search. Incidences of medication errors reported in studies vary widely. The range of reported incidences of adverse drug reactions is even wider. These wide ranges can be largely explained by the different study methods and definitions used. Problems related to drug therapy may be averted by preventive interventions. Several possibilities for prevention exist, especially for the prevention of medication errors. Prescribing, transcription and interpretation errors can be reduced by using computerised physician order entry. Together with the use of automated dispensing systems and bar-code technology, this will aid in the reduction of both dispensing and administration errors. Education of nursing staff involved in the process of drug distribution is another important measure for preventing medication errors. Finally, the introduction of systems for the early detection of adverse drug reactions may help to reduce problems related to drug therapy. Identifying risk factors that contribute to the development of adverse drug reactions, may aid in the prevention of these reactions.