In 2004-05, prescribing cost nearly £8bn in England - over 681 million items at an average of nearly 13 per GP list patient and £150 per year.

In 2004-05, prescribing cost nearly£8bn in England - over 681 million items at an average of nearly 13 per GP list patient and£150 per year.

But the real story is buried below; variations in these figures require some explaining.

As with the Department of Health's national programme budget, variations in spending by primary care trusts on different disease areas, differences in prescribing across the country have been known about for years. And for just as long, attempts have been made to explain them.

Prescribing data from the Prescription Pricing Authority for 2004-05 shows a three-fold variation in number of items prescribed per patient across the old PCT boundaries. At over 19, Wyre PCT had the highest number of items per patient per year, with Kensington and Chelsea recording the lowest at around 6.5.

There was also a two-fold variation per prescription item across England - from around£8 in Bradford City to nearly£16 in North Surrey.

Interestingly, there seems to be a North-South divide: 80 per cent of the PCTs in the top 50 in terms of highest number of prescription items per patient are north of Birmingham. And there was a corresponding concentration of southern PCTs at the bottom of the league.

And although more items were prescribed per head in the North they tended, on average, to be cheaper per item. The second charts shows a significant trade-off between volume of items per patient and cost per item.

Of course, all these variations are based on crude data; much of the difference in prescribing should be as a result of differences in demographic and health needs. Adjusting healthcare use patterns for need can be problematic. But the current weighted capitation formula contains a specific age, sex and needs index specifically for the prescribing component of PCTs' allocations.

This formula first weights PCTs' populations for age, sex and temporary residents on the basis of originated prescribing units. Higher age groups are given greater weighting for need. The overall prescribing needs index 'explains' 60 per cent of the variation in prescribed items per head, but only 18 per cent of the variation in cost.

There are two scenarios: either the weighted capitation needs adjustment and is failing to capture all needs-related variation - in which case PCTs' allocations are wrong - and/or the adjustment is doing its job, and the 40 per cent unexplained variation is a reflection of unjustifiable prescribing behaviour.

John Appleby is chief economist at the King's Fund.