The quality of nursing home care has been subject to intense investigation and scrutiny, particularly in the US. In particular, there has long been concern about the extensive use of psychotropic agents, notably antipsychotics, hypnotics and anxiolytics, in this setting. These drugs have been described as 'chemical restraints', in that they were used to sedate and subdue patients, partly to compensate for poor staffing levels and to minimise staff contact with patients. However, following a damning Institute of Medicine report to the US Congress, use of such drugs became regulated under a unique administrative initiative: the Nursing Home Reform Act, embedded within the Omnibus Budget Reconciliation Act 1987 (OBRA 87). Research has indicated that psychotropic drug use in nursing homes has declined markedly following the implementation of this regulation. In addition, explicit criteria for potentially inappropriate medication use were incorporated within the guidelines for nursing home inspectors from 1 July 1999. Because regulations have targeted poor prescribing, rather than promoting the use of effective drugs in older residents, it has been difficult to determine whether outcomes have improved for nursing home residents as a result. However, US government agencies have responded to continuing concerns about nursing home care through the implementation of quality indicators which are used to guide and plan inspections of such facilities and to compare nursing homes within the same state. Although there are a limited number of quality indicators relating to prescribing, this represents a move away from adversarial regulation, which focuses on poor practice, and attempts to improve quality of care. An important role for educational initiatives and interventions has been advocated by some commentators and these have proved to be successful in the nursing home environment. Other countries have not implemented such restrictive prescribing regulation in nursing homes. Exemplars of innovative prescribing models, involving pharmacists and encouraging resident-centred care, may offer a more palatable approach to improving drug use in this vulnerable population.