An improved medication dispensing system is provided for controlled preprogrammed dispensing of medication to a patient and for creating a retrievable patient medication record. The system includes a dispensing unit located, for example, at patient bedside within a hospital room or the like and adapted to receive a pair of medication canisters having magazines with individual cassettes which have been preloaded in a preprogrammed manner in the hospital pharmacy or the like respectively to contain scheduled and unscheduled medications for administration to the patient. The dispensing unit is programmed according to individual patient needs to signal a nurse or other personnel at selected times when scheduled medication is prescribed, whereupon the scheduled medication can be accessed for dispensing only after entry of valid nurse or other personnel identification code into a dispensing unit memory. The unscheduled medications may be accessed by the nurse or other personnel in a similar manner but on an untimed basis as required by the patient. The dispensing unit further includes sensors for detecting removal of any medication cassette and for signalling the dispensing unit memory to create a corresponding patient medication record. A data transmission device is provided for selectively programming the dispensing unit memory and/or for reading the patient medication record from the memory.