The full cost to the NHS of last year's jump in generic drug prices has been revealed as £200m.

Statistics released last week show that last year's total NHS prescription bill was£5.3bn, an increase of 12.5 per cent on the previous year. The average annual increase has been about 8 per cent over recent years.

The figures show that doctors wrote 66 per cent of prescription items generically, but pharmacists only dispensed 48 per cent generically.

As a result of supply problems with generics there was a vast increase in the number of 'category D' prescriptions. Category D operated when there was a problem with generic availability, allowing a branded alternative to be dispensed instead.

'In October 1999 around 7 million scripts - 17 per cent - were affected.

Traditionally less than 1 per cent of prescription items were category D, ' the statistical bulletin says.

The rise in prices was triggered by the closure of one generics supplier.

Manufacturers also blamed a move towards dispensing drugs in individual patient packs and problems with the Category D system, which has since been abolished.

But in exchanges before the Commons health select committee, government officials also accused suppliers of exploiting the situation.

The government rushed out price-capping proposals on generics in April. But it partially backtracked earlier this month, issuing a revised tariff with higher prices after manufacturer Norton Healthcare threatened to stop production.

Junior health minister Lord Hunt said the cost increases clearly indicated why it was necessary to bring in the statutory maximum prices for generics. 'In a full year, the action we have taken to control prices will reverse the effect of these increases, 'he added.

A fundamental review of the generics drugs market is being conducted by Oxford Economic Research Associated and its report is expected shortly.

A spokesperson for the British Generics Manufacturers' Association, which represents eight companies, including Norton Healthcare, said: 'The generics industry is saving the NHS a lot of money by bringing generics online as soon as possible after patents have expired. If the government wants to abolish patent law, then that will be fine .'