An invitational expert meeting on indicators of prescribing quality was held on 13-15 May 2004, bringing together--from 19 European countries, the US, Canada, and Australia--40 researchers specialized in the development and application of indicators. The meeting was organized by the European Drug Utilization Research Group (EuroDURG), the Belgian National Health Insurance Institute (RIZIV-INAMI), and the World Health Organisation Regional Office for Europe (WHO-Euro). The field of prescribing quality was defined and delineated from the medical error field. A conceptual grid for classifying quality indicators was discussed, combining two axes (a drug/disease/patient axis and a structure/process/outcome axis). In addition, available databases were listed for continuous monitoring of drug utilization in Europe, with a description of the content and the richness of the collected data, as well as the impact on the potential and limitations to develop quality indicators. The importance of the origin of data for validity assessment was stressed, as data on drug utilization may originate from physician sources (prescribing data), from pharmacist or health insurer sources (distribution data), or directly from patient sources (compliance data). The different aspects of validity and their methods of assessment were listed. An overview of the (in)appropriate uses of indicators was given. The state of the art of the development and application of prescribing quality indicators in all represented countries was made, together with a first draft of a database of prescribing quality indicators, already subjected to validation procedures.