A lipophilic vehicle-based dual controlled-release matrix, suitable for encapsulation in hard or soft capsules, has been developed. The matrix is in the form of a suspension, which allows for easier formulation of low dose compounds and/or compounds which are moisture sensitive. The matrix includes two rate controlling barriers for the controlled release of one or more pharmaceutically active agents. The primary rate controlling barrier includes a relatively lipophilic oily vehicle. The primary rate controlling barrier may further comprise or more excipients, dissolved in the lipophilic vehicle, which themselves have rate controlling properties. The secondary rate controlling barrier is a hydrogel-forming polymeric material which is dispersed in the primary rate controlling barrier. As the primary rate controlling barrier breaks down, the pharmaceutically active agent is slowly released and the surrounding aqueous media begins to percolate into the polymer matrix. This results in hydration of the polymer and subsequent formation of a hydrogel, which controls the release of the drug by diffusion through, and/or erosion of, the hydrogel. By dispersing or suspending part of the pharmaceutically active agent in the primary rate controlling vehicle, a dual release profile can be obtained. The combination of release of the drug from the lipophilic oily vehicle and release of the drug from the hydrogel allows for the modulation of drug release for up to 24 hours. This system is particularly useful for moisture sensitive drugs as the oily layer prevents water migration from the shell in to the fill.