A system, apparatus and method for dispsensing medications prescribed by a doctor or other medical personnel. A portable memory device (such as a magnetic card) is used to store data representing prescription information. Prescription information is encoded into the memory device by a programming device located in a pharmacy. A container having a plurality of individual compartments is filled at the pharmacy with medications in accordance with the prescription information. The portable memory device and filled container are transported together to a medication dispenser located near a patient. The dispenser includes apparatus which reads the prescription information from the memory device and makes medications within the individual compartments available to the patient only at prescribed times. The medication dispenser also includes apparatus for monitoring whether or not the patient is complying with the prescribed medication schedule. Patient compliance information is stored within the memory device. The system also includes a monitor through which medical personnel can obtain a video display or printed record of the prescription information and patient compliance information stored within the memory device.