1.  The NHS could save more than £200 million a year, without affecting patient care, by GPs prescribing lower cost but equally effective medicines. Many drugs are available in both branded and generic versions, and the latter is usually much cheaper than the brand name drug, for which the manufacturers have to recover research and development costs.

2.  The proportion of prescriptions written by chemical name rather than by brand name, known as generic prescribing, rose from 51% in April 1994 to 83% in September 2006. But only 59% of prescription items were actually dispensed as generics in 2005, mainly because not all drugs prescribed were available in generic form. For some common conditions doctors have a choice of clinically equally effective drugs, some of which are available in generic form whilst others are only available as branded medicines. Where it is clinically appropriate, GPs should prescribe those available in generic form.

3.  The proportion of lower cost prescriptions for some common conditions varies greatly between Primary Care Trusts (PCTs), for example between 28% and 86% for statins. Strategic Health Authorities should work with the National Prescribing Centre to spread best practice in prescribing and help those PCTs that have difficulty implementing switching programmes to learn from PCTs that have successfully done so.

4.  Comparing GP practices and PCTs on indicators of efficient prescribing is an effective way of influencing prescribing behaviour. The Department, in conjunction with the NHS Institute for Innovation and Improvement, should develop more 'Better Care, Better Value' prescribing indicators to measure the proportion of generics dispensed and the level of potential savings where more cost effective prescribing would generate significant savings, such as for renin-angiotensins used to treat high blood pressure. Strategic Health Authorities should use these indicators to hold PCTs to account for prescribing costs.

5.  Despite large variations between PCTs in prescribing efficiency, nearly all GP practices achieve maximum points on the 'medicines management' indicators in the Quality and Outcomes Framework. Practices are rewarded for meeting a prescribing adviser 'at least annually', and agreeing 'up to three' actions relating to prescribing. The Department should strengthen the medicines management indicators when the Quality and Outcomes Framework is next renegotiated, and set more ambitious prescribing improvement targets for practices in order to be awarded the medicine management points. The Framework should also reward GPs for prescribing drugs that are available in generic form when clinically appropriate.

6.  One in five GPs responding to the NAO's survey said pharmaceutical companies had more influence on prescribing decisions than official advisers. Whenever a gift is given by a company there is a risk that it will have an inappropriate influence on the recipient's behaviour. The Department should specify the minimal level above which gifts, hospitality, etc provided to prescribers by pharmaceutical companies should be disclosed to the PCT. PCTs should publish an annual register of this information.

7.  Hospital consultants' prescribing choices are bound by agreed 'formularies' of cost effective drugs, but GPs are generally not subject to formularies. Although prescribing decisions must be sensitive to the needs of the individual patient, evidence on the cost and clinical effectiveness of treatments for a particular disease should apply consistently across the country. The Department should encourage PCTs to pilot joint primary/secondary care formularies. Strategic Health Authorities should work with the National Prescribing Centre to promote agreement and consistency of formularies across primary and secondary care, and across PCTs.

8.  88% of prescription items are dispensed free, and the remainder for a standard charge not directly linked to actual cost. The Department should do more to make patients aware of the costs of drugs, and hence the importance of not wasting them, for example by displaying on dispensed drugs information such as the cost of the specific items dispensed or an indication of the typical cost of items to the NHS.

9.  Unused and wasted drugs cost the NHS at least £100 million a year. The Department of Health does not have robust or up to date information on the cost of drugs wastage or a good understanding of the varied and complex reasons why patients do not always use their drugs. It should commission research to establish the extent to which medicines are not used, and establish the reasons why patients do not take their drugs.

10.  Generic versions of drugs can vary considerably in appearance, colour and packaging. This variation can be confusing for patients, particularly elderly patients on several medications, and can increase the risk of patients taking their drugs wrongly, or not at all. The Department should explore with the industry the scope to achieve greater consistency of appearance, labelling and/or packaging of the more common drugs supplied to the NHS.