A draft report by the European Commission on Ireland's bailout programme has recommended major changes to deal with overspending.

The report is part of the assessment carried out every three months by the Troika since the bailout. 

Today's report is the most hard hitting.

On the Croke Park deal, it suggests some allowances and salary scales could be cut back.

But it singles out health as a major problem area.

It recommends a new strict new regime for doctors prescribing medicines to cut costs.

The new suggested prescriptions would see doctors prescribing by active ingredients instead of using brand names of drugs as most do now.

It says there should be regular monitoring of doctors to check their compliance with the binding prescription guidelines.

The report says that spending on pharmaceuticals in Ireland is the highest in the EU.

It is deemed to be 34% above average while health outcomes are not better than the average.

In the report it points to the cost of drugs in Ireland have nearly tripled since from 2000 to 2008.

The report suggests where spending on drugs exceeds limits the money should be clawed back from the pharmaceutical companies.

It also says spending in the Department of Health overran partly because steps to contain costs which had been annouced were not fully taken.

The report indicates that discussions during the Troika mission evidenced that those commitments have been only partly implemented.

The Troika says steps to stop over spending must be swiftly and fully implemented.

It says public sector workers are paid more than equivalent workers in the private sector.

The report says there is no explanation for this difference.

Troika health recommendations

The draft report also suggests further opening the supply of labour for suitably qualified doctors from other countries.

It points out other countries, such as Britain, have a higher number of foreign doctors per head of population.

The report says: "There have been overruns in the health sector, which require durable reforms to reduce the risk of future spending pressures in this area."

It says the Government announced in July that it had taken steps to curb the overspending.

However, it adds: "Discussions during the [Troika] mission evidenced that those commitments have been only partly implemented, resulting in an estimated overrun of €370m through November 2012.

"The authorities have also begun an engagement with unions representing public servants including health sector workers, to seek additional savings from the public sector pay and pensions bill, along with additional productivity reforms (including hours worked).

"The mission took the view that all options should be kept on the table and that additional savings in the public sector pay bill should be made in a manner that does not compromise the delivery of key public services, including the option to review pay scales and allowances besides relying on further reductions in payroll numbers."

The document shows that the European Commission has also cut its growth forecast for Ireland for 2013 from GDP growth of 1.4% to 1.1%.

It says that the Department of Finance is "more optimistic on GDP growth" than the European Commission.

Meanwhile, The Irish Medical Organisation has said it has wanted to change the way drugs are prescribed here for some time.

It claimed that the Department of Health has not engaged with doctors.

Chairman of the IMO's General Practitioner committee Raymond Walley said that the IMO was willing to discuss drug prescriptions.

He said the notion of generic prescribing exists in other jurisdictions and many GPs in Ireland did so already.

On the matter of GPs being required to prescribe drug ingredients rather than brandnames, Dr Walley said it depended how specific the Troika wanted doctors to be.

He said people can have reactions to different brands and that there would have to be a degree of flexibility for the safety of patients.

On the issue of qualified doctors being brought in from abroad, Dr Walley said Ireland had always been an open market for the supply of GPs.

He continued, that Irish trainees were leaving because salaries were higher elsewhere and health services were better, in that they were not as stressful a work environment as the Irish health service.

Dr Walley also said the IMO had met with the Department of Health two days ago and none of the issues mentioned in the Troika report had been raised with them at that point.