Research databases with large numbers of prescriptions in observational settings can provide valuable information in addition to the initial randomized controlled trials. This paper reports on the development of prescription database IADB, formerly known as InterAction Database. IADB contains prescriptions from 54 community pharmacies in The Netherlands and covers a population of 500,000 people. Both the age distribution and the prevalence of drugs used are comparable to a large extent with the Dutch population. The representativeness of the population covered is examined by comparing population composition and drug use with data of the whole Dutch population. Enriching IADB with, among others, clinical parameters by linking to other databases is explored. A strong and unique aspect of IADB is the possibility to track patients over time, even when they receive their medication from different pharmacies. The authors conclude IADB is a useful tool for pharmacoepidemiological and pharmacoeconomic outcomes research.