A mechanical dilatation and medicament delivery device for enlarging a flow passage of a vessel by dilating and delivering a liposome or micelle-encapsulated therapeutic agent or medicament to an obstruction in the vessel. The present invention comprises a substantially cylindrically shaped expansion member and includes a means engaged to the expansion member for altering the distance between the proximal end and the distal end of the expansion member thereby transforming the expansion member between a diametrically contracted configuration to diametrically expanded configuration. A liposome or micelle-encapsulated therapeutic agent or medicament is coated on either the expansion member, or incorporated into a substrate coated on the expansion member.