The irrational use of drugs is a major problem of present day medical practice and its consequences include the development of resistance to antibiotics, ineffective treatment, adverse effects and an economic burden on the patient and society. A study from Attock District of Pakistan assessed this problem in the formal allopathic health sector and compared prescribing practices of health care providers in the public and private sector. WHO recommended drug use indicators were used to study prescription practices. Prescriptions were collected from 60 public and 48 private health facilities. The mean (+/- SE) number of drugs per prescription was 4.1 +/- 0.06 for private and 2.7 +/- 0.04 for public providers (p < 0.0001). General practitioners (GPs) who represent the private sector prescribed at least one antibiotic in 62% of prescriptions compared with 54% for public sector providers. Over 48% of GP prescriptions had at least one injectable drug compared with 22.0% by public providers (p < 0.0001). Thirteen percent of GP prescriptions had two or more injections. More than 11% of GP prescriptions had an intravenous infusion compared with 1% for public providers (p < 0.001). GPs prescribed three or more oral drugs in 70% of prescriptions compared with 44% for public providers (p < 0.0001). Prescription practices were analysed for four health problems, acute respiratory infection (ARI), childhood diarrhoea (CD), fever in children and fever in adults. For these disorders, both groups prescribed antibiotics generously, however, GPs prescribed them more frequently in ARI, CD and fever in children (p < 0.01). GPs prescribed steroids more frequently, however, it was significantly higher in ARI cases (p < 0.001). For all the four health problems studied, GPs prescribed injections more frequently than public providers (p < 0.001). In CD cases GPs prescribed oral rehydration salt (ORS) less frequently (33.3%) than public providers (57.7%). GPs prescribed intravenous infusion in 12.3% cases of fever in adults compared with none by public providers (p < 0.001). A combination of non-regulatory and regulatory interventions, directed at providers as well as consumers, would need to be implemented to improve prescription practices of health care providers. Regulation alone would be ineffective unless it is supported by a well-established institutional mechanism which ensures effective implementation. The Federal Ministry of Health and the Provincial Departments of Health have to play a critical role in this respect, while the role of the Pakistan Medical Association in self-regulation of prescription practices can not be overemphasized. Improper prescription practices will not improve without consumer targeted interventions that educate and empower communities regarding the hazards of inappropriate drug use.