Hospital drug management was an important part of hospital management,the new Hospital Financial System and Hospital Accounting System made reform on the accounting and management of drugs,which put forward higher requirement on more objective,accurate and timely information,so as to provide important evidence for the hospital managers making scientific and reasonable decision for the management and development of hospitals.Based on the current status of hospital drug management,it analyzed the medicine circulation process and the corresponding accounting treatment,and summarized the method so as to provide reference ofr the further regulating drug management,optimizing the accounting,improving the economical benefits and management level of hospitals.