The price of a prescription has dropped by a quarter in the run-up to eventual abolition of charges in Wales.
Only prescriptions issued in Wales are eligible
From 1 April, the cost of a prescription fell from £4 to £3, compared to £6.65 in England.
The assembly government froze prescription prices at £6 in 2001, and in the past 18 months has reduced the cost three times.
From 2007, no-one living in Wales issued with a prescription by a Welsh surgery will have to pay.
Health Minister Dr Brian Gibbons said: "Making prescriptions free for all is a major part of our drive to reduce inequalities in Wales and make health services accessible to everyone.
"Free prescriptions for all is the simplest and most effective way of resolving any inequalities and inconsistencies in prescribing.
"To introduce exemptions to certain groups would be complex to introduce and implement.
"Our proposals are straightforward and effective. This way everyone benefits, from the chronically ill to the low paid."
He said research showed many people were dissuaded from taking regular medication that would help them live healthier lives because of cost.
He argued long-term costs to the NHS could be far greater in terms of avoidable hospital treatment than giving drugs for free.
"We now have legislation in place which means the people entitled to reduced prescriptions are those whose medicines are prescribed by a prescriber contracted to a Welsh Local Health Board, on a Welsh prescription form and dispensed by a pharmacist in Wales," Dr Gibbons added.
The cost of pre-payment certificates will also go down to £43.09 for a year and £15.69 for four months.