The fines, which carry a maximum penalty of £100 and are issued to those who wrongly claim free medication, are issued after an NHS exemption certificate has expired.

But the data confirms that 342,882 penalty notices were subsequently withdrawn because the patient was entitled to the free prescription.

“These Freedom of Information requests appear to show a penalty system that is dysfunctional,” said Lucy Watson, chair of the Patients Association. “Any organisation issuing penalty notices and then having to withdraw nearly one in three because they were issued in error is not operating as it should. This compounds the unjust and haphazard nature of prescription charging in England, with some patients facing substantial costs to manage their conditions, and others being entitled to free prescriptions.”

Part of the problem stems from patients moving home and failing to update their records.

The NHS Business Services Authority, the agency in charge of issuing the fines, said it was continually reviewing its data-matching process and making improvements to ensure eligible patients were not wrongly pursued. It said it was also trying to educate patients on the importance of keeping the details on both their GP records and their exemption or prescription prepayment certificates up to date.

“The NHS loses millions each year through fraudulent and incorrect claims for free prescriptions,” said Alison O’Brien, head of loss recovery services at the authority. “On behalf of NHS England, and in discussion with the Department of Health and Social Care, the NHS Business Services Authority checks claims randomly and retrospectively to appropriately recover funds and return them to NHS services.”

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