Polymeric drug formulations containing a non-releasing single-phase dispersion of a water-soluble drug in a water-insoluble tissue-compatible polymer matrix. Polymeric drug formulations are also disclosed containing a single-phase dispersion of a water-soluble drug and a water-insoluble tissue-compatible polymer matrix, and a second, phase-disrupting polymer that is non-miscible with the tissue-compatible polymer and is present in an amount sufficient to form phase-separated microdomains of the second polymer in the tissue-compatible polymer matrix, so that the release rate of the water-soluble drug from the tissue-compatible polymer matrix is related to the amount of the second polymer. Methods of preparing the polymeric drug formulations are also described, as well as methods for site-specific drug delivery utilizing the polymeric drug formulations.