Policies consisting of or including prior authorisation (PA) of pharmaceutical prescriptions have been increasingly implemented by public and private insurers in the last decade, especially in the US, in order to control drug spending. We conducted a systematic review of published articles determining the effects of these policies on drug use, healthcare utilisation, healthcare expenditures and health outcomes.A literature search was carried out in the electronic databases PubMed (which includes MEDLINE), EconLit, Web of Science and online sources including Google Scholar, from 1 January 1985 to 12 September 2006. Reference lists of retrieved articles were also searched. Peer-reviewed studies that provided empirical results about the impact of pharmaceutical PA policies, including randomised and non-randomised controlled trials, repeated measures studies, interrupted time series analyses and before-and-after studies were included. Use of, and expenditure on, directly affected drugs per patient, and overall drug expenditure, significantly decreased after PA implementation, or increased after PA removal. Health outcome changes attributed to PA policies were not directly evaluated. In most cases, except for cimetidine, PA implementation was not associated with significant changes in the utilisation of other medical services. Although the literature indicates a reduction in drug expenditure and a non-negative impact on use of other health services, policy recommendations still require improved study designs, and evidence cannot be easily transferred from one setting to another. The evidence still remains mainly limited to US Medicaid settings and to a small number of drug classes. There is a lack of consideration of implications of PA policies as heterogeneous interventions, outcome measurements require improvement, and there is a notable lack of evidence of medium- and long-term policy effects.