Prior to 1994, most Delhi hospitals and dispensaries experienced constant shortages of essential medicines. There was erratic prescribing of expensive branded products, frequent complaints about poor drug quality and low patient satisfaction. Delhi took the lead in developing a comprehensive Drug Policy in 1994 and was the only Indian state to have such a comprehensive policy. The policy's main objective is to improve the availability and accessibility of quality essential drugs for all those in need. The Delhi Society for the Promotion of Rational Use of Drugs (DSPRUD), a non-governmental organization, worked in close collaboration with the Delhi Government and with universities to implement various components of the policy. The first Essential Drugs List (EDL) was developed, a centralized pooled procurement system was set up and activities promoting rational use of drugs were initiated. In 1997, the Delhi Programme was designated the INDIA-WHO Essential Drugs Programme by the World Health Organization. The EDL was developed by a committee consisting of a multidisciplinary group of experts using balanced criteria of efficacy, safety, suitability and cost. The first list contained 250 drugs for hospitals and 100 drugs for dispensaries; the list is revised every 2 years. The pooled procurement system, including the rigorous selection of suppliers with a minimum annual threshold turnover and the introduction of Good Manufacturing Practice inspections, resulted in the supply of good quality drugs and in holding down the procurement costs of many drugs. Bulk purchasing of carefully selected essential drugs was estimated to save nearly 30% of the annual drugs bill for the Government of Delhi, savings which were mobilized for procuring more drugs, which in turn improved availability of drugs (more than 80%) at health facilities. Further, training programmes for prescribers led to a positive change in prescribing behaviour, with more than 80% of prescriptions being from the EDL and patients receiving 70-95% of the drugs prescribed. These changes were achieved by changing managerial systems with minimal additional expenditure. The 'Delhi Model' has clearly demonstrated that such a programme can be introduced and implemented and can lead to a better use and availability of medicines.