A prescription drug is a licensed medicine that is regulated by legislation to require a prescription before it can be obtained. The term is used to distinguish it from over-the-counter drugs which can be obtained without a prescription. Different jurisdictions have different definitions of what constitutes a prescription drug.

Dispensation of prescription drugs often includes a package insert (in Europe, a Patient Information Leaflet or PIL) that gives detailed information about the drug.

Regulation in United States

In the United States, the Federal Food, Drug, and Cosmetic Act defines what requires a prescription. Prescription drugs are generally authorized by veterinarians, dentists, optometrists, and medical practitioners. It is generally required that an MD, DO, PA, OD, DPM, DVM, DDS, or DMD write the prescription; basic-level registered nurses, medical assistants, clinical nurse specialists, nurse anesthetists, and nurse midwives, emergency medical technicians, psychologists, and social workers as examples, do not have the authority to prescribe drugs.

The package insert for a prescription drug contains information about the intended effect of the drug and how it works in the body. It also contains information about side effects, how a patient should take the drug, and cautions for its use, including warnings about allergies.

The safety and effectiveness of prescription drugs in the US is regulated by the federal Prescription Drug Marketing Act of 1987. The Food and Drug Administration is charged with implementing this law.

As a general rule, over the counter (OTC) drugs are used to treat conditions not necessarily requiring care from a health care professional and have been proven to meet higher safety standards for self-medication by patients. Often a lower strength of a drug will be approved for OTC use, while higher strengths require a prescription to be obtained; a notable case is ibuprofen, which has been widely available as an OTC pain killer since the mid-1980s but is still available by prescription in doses up to four times the OTC dose for use in cases of severe pain not adequately controlled by the lower, OTC strength.

Herbal preparations, vitamins, minerals, and food supplements are not regulated by the FDA, so the individual consumer must be aware of the potential negative effects of using these preparations and also the potential interactions with prescription drugs they may be taking.

In the United States, the term "prescription drug" is most commonly used, but they are also called Rx-only drugs or legend drugs, after the Federal and State laws which mandate that all such drugs bear a "legend" prohibiting sale without a prescription; though more complex legends have been used, on most original drug packaging today the legend simply says "Rx only". In the United Kingdom, they are referred to as Prescription Only Medicine or POM.