The coalition has launched a drive to save £150 million by cracking down on fraud at chemists.
Under the proposals, a new IT system will allow staff to access Department for Work and Pensions records on the spot and see whether individuals are entitled to free prescriptions.
The existing retrospective checks by the NHS Business Services Authority are also being beefed up, with fraudsters facing fines of up to £2,500.
Meanwhile, a new team is being created to tackle fraud and error at dentists - with the aim of halving the £92 million a year bill by 2016.
Health Minister Dr Dan Poulter said: “We have a duty to ensure that every available penny of NHS cash is available for frontline patient care.
“This abuse of the NHS must stop. Claiming a free prescription when you are not entitled takes money away from other frontline patient services, and reduces the amount of money available to spend on patient care.
“We are taking action to ensure that people who are entitled to access free prescriptions, for the over 60s, are better supported to do so and we are getting tough on those who avoid paying their fair share.”
Chief pharmaceutical officer Dr Keith Ridge said: “These new measures aim to strike the right balance between encouraging the public to abide by the law, whilst ensuring healthcare professionals can meet their primary obligation to provide safe and effective care to their patients.”
But David Branford, board chair of the Royal Pharmaceutical Society (RPS), said: “This move to make pharmacists police the Government’s unfair charging system is totally unacceptable to us. We are opposed to any move that adds to the bureaucratic burden of pharmacists without improving patient safety in any way.
“We are concerned the Government is using provocative language to label those with incurable illnesses such as diabetes as ‘fraudsters’ just because they have forgotten to renew their medical exemption certificate. People need better access to their medicines, not a financial penalty for a minor mistake.
“We understand that the IT systems which are being deployed will allow pharmacists to check peoples’ benefit status in the pharmacy.
“We believe this will disrupt and distort the relationship between pharmacist and patient, impacting on the trust that currently exists and creating a culture of fear and uncertainty when asking for a prescription to be filled.”