A draft report by the European Commission on Ireland's EU IMF bailout has recommended a strict new system for doctors prescribing medicines to encourage more use of generic drugs.
The new proposed prescriptions would seek to ensure doctors prescribe by active ingredients instead of by the brand name of a drug.
It said there should be "regular monitoring of doctors' prescription behaviour to check their compliance with the binding prescription guidelines."
It also suggests electronic monitoring to ensure doctors are seeking the most cost effective alternatives.
The document, seen by RTÉ, points out spending on pharmaceuticals in Ireland is the highest in the EU at 34% above average "while health outcomes are not better than the average for EU countries over a range of high level indicators. This suggests a potential for savings well beyond the measures already announced."
It says the cost of drugs in Ireland nearly tripled between 2000 to 2008.
The draft report, details of which first emerged on thejournal.ie, suggests further opening the supply of labour for suitable qualified doctors from other countries. It points out other countries such as the UK 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. But 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 report says: "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 also says that the Department of Finance is "more optimistic on GDP growth" than the European Commission.