A leading think-tank has described Britain's £6-per-item prescription charge as "an abject failure".

The Adam Smith Institute has called for the current system to be replaced with "patient co-payment" schemes similar to those run in Sweden, Denmark, Belgium, the Netherlands.

Under the proposed scheme NHS patients would pay a one-off bill of between £60 to £120-a-year. Ian Senior, pharmaceuticals analyst for the think-tank, claims the plan would raise an extra £2.2 billion to help the NHS. He believes that the extra cash would improve hospital standards and end the "postcode lottery" rationing of expensive new treatments.

Senior said of the current system: "Virtually everything is wrong with it. The prescription charge pays for less than a fifth of community prescription costs, because most patients are exempted. It has not stemmed the demand for free medicines - a demand which is getting increasingly hard to meet as specialist medicines become costlier."

He added: "It does not promote social solidarity because a rich person pays the same £6 as a poorer one. It does not give patients any information about the real costs of medicines, or help them make rational choices between different treatments."