The present invention provides a system for transdermal delivery of water insoluble drugs and methods using the same. The system includes a pharmaceutical composition of a water insoluble drug and a carrier molecule that enhances the solubility of the drug in aqueous solution, a medical patch containing the same and an apparatus that generates hydrophilic micro-channels in an area of skin of a subject using the composition or patch. The system preferably avoids the use of penetration enhancers and is particularly useful for transdermal delivery of steroids.