Methods of drug procurement used by hospital pharmacies are discussed. Pharmaceuticals may be purchased directly from the manufacturer or from one or more local wholesalers. Factors influencing the extent to which each of these procurement sources is used are described, and the advantages and disadvantages of group purchasing and the prime-vendor concept are discussed. Finally, factors to be considered when evaluating proposed modifications of a hospital purchasing program are discussed. Prime-vendor relationships and pharmaceutical purchasing groups offer some potential advantages to hospital pharmacists in terms of cost and efficiency. The applicability of these methods must be carefully analyzed in each individual hospital setting.