A method of producing a microencapsulated pharmaceutical formulation is disclosed comprising causing a dye to be attached to the surface of pharmaceutical particles or particle clusters and applying a source of radiant energy to the dye in the presence of a liquid polymeric or polymerisable material so as to cause the material to cross-link, producing a conformal layer of cross-linked polymer on the particulate surfaces. Preferably, the polymer provides an immuno-protective layer around the particles, while allowing therapeutic components to exit the microcapsules. Microencapsulated pharmaceutical formulations and their medical use are also disclosed, especially for the treatment of diabetes by encapsulating insulin secreting cells.