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BACKGROUND: Prescribing and dispensing surveys are pre-requisites to achieving rational drug use. There is a dearth of such studies in India, particularly in the non-governmental organization sector. METHODS: We carried out a survey at the outpatient facilities maintained by the Southern Health Improvement Samity, a non-governmental organization in the South 24 Parganas district of West Bengal. Data were collected prospectively by interviewing patients immediately after patient-physician and patient-dispenser encounters. Pre-designed forms were used to collect data pertaining to World Health Organization drug-use indicators and some additional indices. The calculations of cost of therapy involved some approximation. RESULTS: Of the 312 prescriptions analysed, the majority were signed, legible and complete with respect to age/gender data; 95.5% used Latin abbreviations and 7.7% mentioned neither signs and symptoms nor diagnosis. The average number of drugs per encounter was 3.2; only 2 patients were treated without drugs; 46.2% of drugs were prescribed by generic name. Use of antibiotics (72.8% of encounters) and irrational fixed dose combinations (45.6% of prescribed drugs) were frequent, but injection use (3.9% of prescriptions) was low. The average drug cost per encounter was Rs 74.19, of which antibiotics comprised 37.1%. The availability of first-line antitubercular drugs was adequate but other key drugs were in limited supply. Essential drugs lists and formularies were not followed. Only 45.7% of prescribed drugs conformed to the World Health Organization model list of essential drugs. Only 12 preparations accounted for 70.9% of the prescribed drugs, including therapeutically doubtful ones such as cough syrups, multivitamins and carminative syrups. For the dispensing survey, 301 prescriptions were analysed separately. All the prescribed drugs were supplied for only 11.6% of prescriptions. There were no serious errors in dispensing but 43.8% of dispensed products were inadequately labelled. Patients knew the correct mode of use for 64.5% of dispensed drugs. The average consultation and dispensing times were 3.7 and 3.1 minutes, respectively. CONCLUSION: Frequent use of antibiotics, irrational fixed dose combinations and preparations of uncertain efficacy, inadequate labelling of dispensed drugs and lack of access to standard tools for rational drug use such as locally adapted essential drugs list, formularies and standard treatment guidelines were some of the problematic prescribing and dispensing trends identified through this survey. Educational interventions are required to rectify these problems.