Medical schools have a major challenge in teaching students to choose and prescribe medicines safely and effectively. Problem-based learning based on national essential medicine lists and standard treatment guidelines has been strongly recommended to improve prescribing. In Nepal, pharmacology is taught during the first two years of the undergraduate medical course. At KIST Medical College, Lalitpur the Department of Clinical Pharmacology teaches students to use essential medicines rationally. Small group, activity-based learning is used during practical sessions. In this article the author lists the 10 basic competencies which students should have developed by the end of the pharmacology practical module and also describes a selection of activities with regard to a particular competency used during the practical module and an exercise used to assess these competencies during the practical examination.