An implantable drug delivery system uses a hydrophobic compound as an outer layer or barrier for retarding release of water soluble drugs from the implantable system. The system includes an inner portion of a water soluble drug in a drug matrix material which stabilizes the drug. An outer portion of the drug delivery system separates the inner portion from a surrounding environment. The outer portion retards the release of the water soluble drug from the inner portion. The outer portion includes a hydrophobic non-polymer compound and a binder. The hydrophobic compound can be another drug which can be delivered at an entirely different release kinetic from the water soluble drug and for treatment of the same or a different condition. When the drug delivery system is implanted in a body the outer portion retards the release of the water soluble drug by controlling fluid passing from the body into the inner portion and by controlling passage of the water soluble drug from the inner portion into the body.