Prescription charges raise about £300m a year for the NHS.

However, the bill for free prescriptions amounts to around £1.3bn a year - more than four times the amount prescription charges raise.

Only 20% of people pay for their prescriptions: the rest are entitled to exemptions.

They include children under 16, students aged 16 to 18, people on income support, women who are pregnant or who have had a child in the last 12 months, people on a war or MoD disablement pension, and people with chronic illnesses such as epilepsy, diabetes and thyroid problems.

People who are exempt from prescription charges for one condition receive a blanket exemption for all medication.

The British Medical Association is calling for an overhaul of the current system which they claim is unfair and full of anomalies.

Earlier this year, Health Minister Alan Milburn announced a crackdown on prescription charge fraud, which is costing the NHS an estimated £100m a year, a third of what it raises from prescriptions.

Patients claiming they are on income support are behind the majority of prescription fraud.

Later this year the Government will appoint a fraud buster to spearhead the fight against prescription and other fraud.

The history of prescription charges

Prescription charges were introduced by the Conservatives in June, 1952, in an attempt to meet the rising cost of prescribed drugs to the NHS.

The initial charge was one shilling - 5p. By 1956, the NHS was dispensing 228 million prescriptions at a cost of £58m.

Labour returned to power in 1964, and a year later abolished the prescription charge, which was by then two shillings (10p) per prescription.

As a result, more prescriptions were issued for cheap products that patients had previously bought for themselves - such as painkillers and dressings.

In 1968 Labour reintroduced prescription charges, but created exempt groups for the old, the young, people on benefit, and people with chronic diseases such as diabetes.

As a result the number of prescriptions fell again, and people increasingly bought common household remedies across the counter.

Since then, prescription charges have gradually increased. The last rise was in April 1997 when the cost was put up to £5.65.

Labour repeatedly attacked the Tories for raising prescription charges throughout their 18 years in office.
 

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