Shortages of generic drugs have produced 'a crisis' in prescription processing, the chief executive of the Prescriptions Pricing Authority has said.

PPA chief executive Nick Scholte said that the current backlog of unprocessed prescriptions stood at 150 million items.

The authority saw a huge increase in the number of prescriptions in the 'category D' scheme - used to reimburse pharmacists for the price of branded drugs when generics are unavailable - from an historic level of 1 per cent to 17 per cent of the total, the authority's annual report says.

The category D prescriptions are more complex to process, bringing a sharp increase in the authority's workload.

Mr Scholte said: 'We have had to cope with what is in effect a crisis in the complexity of items we have had to process.'

Measures to tackle the problem had cost the PPA£4.8m in this financial year, he said. In the annual report, he warns that the backlog 'could not have occurred at a worse time' for those managing prescribing, with drug expenditure charged to health authority and primary care cash limits for the first time in 1999-2000.

HAs and primary care groups faced the immediate effect of spiralling generic prices in the wake of the shortage while PPA prescribing information fell three months behind schedule.

In 'an unprecedented year', the PPA recruited 700 extra staff and saw operating expenses rise by just under 10 per cent as measures to cope with the flood of extra work were introduced.

Among measures taken were record levels of overtime, staff recruitment increased 'up to the limit our buildings and computer infrastructure could support', and re-engineering of computer systems to speed staff training.

Mr Scholte said: 'Without those steps it's fair to say the backlog would have been even greater.'

He was 'reasonably confident' that the measures would mean the prescribing information would return to normal by September 2001. But he warned that the government's abolition of the category D scheme might not prevent a similar crisis in future.

NHS Alliance chair Dr Mike Dixon said the generic price rise was 'a great disaster'.

Primary care groups and trusts had been 'in the process of changing prescribing patterns' to increase the use of generics when their prices spiralled.