Most people pay $3 per medicine when they collect their prescription from the pharmacy.
After members of any one family have paid for 20 prescription items in a year, all those people are supposed to be exempt from the charge.
But Pharmac data shows 180,000 people throughout the country are paying for prescriptions after becoming exempt.
This costs patients about $2.5 million a year.
Those affected are likely to include some of the country's most vulnerable people, a continuing study into equity in prescription use undertaken by researchers at Otago University and at Victoria University of Wellington indicates.
Using anonymous data from community pharmacy computers, researchers identified individuals who had more than 20 items dispensed to them in a year and found most were from the most socioeconomically deprived areas.
A total of 40% of patients still paid the prescription fee for 90% of the medicines they received, despite being exempt.
Standard charges for prescription medicines are due to rise from $3 to $5 next January.
The overall study is being led by Prof Pauline Norris, of the Otago School of Pharmacy and other participants include Dr Simon Horsburgh, of Otago University, and Associate Prof Jackie Cumming, of Victoria University of Wellington.
Prof Norris said the exemption meant families should not be required to pay more than $100 a year after next year's increased charge.
But she was "very worried" some patients with multiple health problems, and using a lot of prescription medicines, would pay much more, given the exemption often did not seem to work in practice.
Exemption from the charges required people to have a Prescription Subsidy Card, to have one main pharmacy, to collect receipts from any other pharmacies they visited, and take these to their main pharmacy.
Many people might not know about the card, and might visit multiple pharmacies, and pharmacists might not be aware of family relationships.
She favoured improving the system to make it more effective for vulnerable people, including the elderly.
The Servants Health Centre, in Dunedin, provides free health care for "lower income" patients.
Centre practice manager Jo Rowe said many people using the service were unaware of the subsidy scheme.
More efforts should be made to inform people in at-risk groups about the scheme, which should be reformed to make it "more portable and accessible".
