The legal issues associated with selecting drug products under the formulary system when there are two or more recognized drug therapies are discussed. The primary legal issue involved is whether a decision by a health-care provider to use a particular drug product can be viewed as "reasonable" under the circumstances when there are two or more recognized drug therapies for treating a patient. In the institutional setting, the physician diagnoses and prescribes drug products but authorizes, under the formulary system, the selection of alternative agents. Imposition of civil liability on health-care providers for a patient's drug-related injury based on a formulary decision has not yet occurred. Liability would most likely be based on negligence in such a case. The standard of care a medical provider will be measured against is what a "reasonable provider" would do under like circumstances. An institution's decision whether or not to routinely have available a particular drug product that is among several accepted therapies would probably not be viewed as negligent, so long as that decision was based on the objective clinical judgment of the medical staff operating under the formulary system. It is unlikely that a decision to use one of two (or more) drug products would be "negligent" if that decision was based on a current and objective evaluation of the medical literature and supported by a recognized segment of medical opinion.