Medicines waste in primary and community care should not be regarded as “a serious systemic problem”, a new report published by the Department of Health has concluded.

Instead it recommends managers should focus on ensuring patients are taking medicines in line with instructions in order to improve their cost effectiveness.

The report, Evaluation of the Scale, Causes and Costs of Waste Medicines, estimates the cost to the NHS of patients not taking medicines properly at more than £0.5bn a year.

Researchers from the health economics consortium at the University of York and the school of pharmacy at the University of London analysed data on medicines compliance of patients with five long term conditions to work out the cost of non-adherence in terms of extra GP appointments, hospital attendances and additional drugs.

Over four years the figure is equivalent to 10 per cent of the £20bn efficiency savings the NHS needs to make by 2015.

By contrast researchers estimated that less than half of the £300m of medicines thrown away annually could be saved due to unavoidable factors such as patient recovering or dying before a course of drugs has been completed or changing a treatment due to side effects.

The report found the average English primary care trust was unlikely to realise much more than £500,000 a year in savings through targeting medicines management, equivalent to between £1 and £2 per head of population.

The DH has set up a new steering group to identify how people can be better supported to take drugs correctly, realising their full benefits and improve cost effectiveness.

Health minister Lord Howe said: “We want to look at how patients can make the most of the medicines they take. This isn’t just about saving money – most importantly, it is about making sure that patients stay well and get the best outcomes from their medicines.”

The steering group to improve the use of Medicines will be made up of experts and patients representatives and will initially report in early 2012.

The group will be jointly chaired by Robert Johnstone, a trustee of patients charity National Voices and Rob Darracott, chief executive of Pharmacy Voice.

Mr Darracott said: “There are lots of good ideas around for how health professionals can provide better support for patients and the public to help them use their medicines more effectively. What the NHS needs now is a real plan for embedding those ideas in systems that historically have been more concerned with the product than the person.”