Objective There can be different incentives in the private versus public healthcare systems across countries influencing the delivery of health care. The implementation of regulations along with financial incentives and quality targets are key initiatives to improve rational prescribing. However, there are concerns in Iran that the different incentives in the Direct versus Indirect sectors can influence the delivery of care even among the same physicians. Consequently, the objective of this study was to evaluate the effect of Social Security Organization (SSO) rules and regulations on the prescribing patterns of physicians working simultaneously in both sectors of the SSO in Iran. Subsequently use the findings to suggest initiatives to improve future prescribing if needed.Methods Retrospective cross-sectional study on claims data. All prescriptions written by general practitioners, internists, gynaecologists and paediatricians that had at least 100 claims and working in both sectors were collected. Non-parametric tests were undertaken to compare prescribing patterns. Key findings 455 549 prescriptions were analysed. The average number of medicine items per prescription was 4 in the direct treatment setting versus 2 in the indirect treatment setting, while the proportion of prescriptions including at least one antibiotic, injectable, corticosteroid and injectable corticosteroid, were 31.5, 16.1, 8.7 and 3% respectively in the indirect treatment setting versus 28.7,13.7, 7.7 and 3.2% in the direct treatment setting. Except for antibiotic prescribing, all other differences were significant. Conclusions There are a number of areas of potential concern with physician prescribing in this study. These include the high use of antibiotics in both sectors, potentially inappropriate polypharmacy in the Direct sector, as well as possibly the overuse of injections especially in the Indirect sector, increasing costs and potentially patient harm. These will be the subject of future research projects.