Patients with life-long conditions are being fined up to £100 for collecting their free prescriptions, the BBC has discovered.
They say they were not told of a rule change that meant their exemption certificates had to be updated.
Charities and pharmacists said patients were being labelled "fraudsters" and being "unfairly" punished.
The NHS said it was the "patient's own responsibility to check their entitlement".
Radio presenter Sybil Ruscoe told BBC Radio Oxford: "I have been fined for having free insulin.
"Hundreds of us have had fines in the post. Basically we're being criminalised for having a chronic illness.
"It's bad enough having type 1 diabetes - you have to prick yourself with needles seven or eight times a day - and now I'm being criminalised for doing something I wasn't told was wrong."
She had type 1 diabetes diagnosed in 1999 and was told that she was entitled to free prescriptions for life.
The system changed in 2002 and a new medical exemption certificate that needed renewing every five years was introduced.
But those issued the old exemptions were not informed of the change.
They have started facing fines since the NHS Business Services Authority took over responsibility for checking people's eligibility last September.
The body started issuing fines of up to £100 plus the cost of the prescription.
Government ministers have openly championed getting tough on prescriptions.
The charity Diabetes UK says "large numbers" of people are affected, although there is no clear overall total.
Its chief executive, Barbara Young, told the BBC: "This is a policy designed to tackle fraud, but because of the poor way it has been implemented it has resulted in the unfair fining of people with a lifelong health condition.
"It is unacceptable and needs to change."
She said that people should have been warned first, rather than just fined.
Neal Patel, of the Royal Pharmaceutical Society, shared that sentiment: "No-one should be labelled a fraudster just because they have forgotten to renew their medical exemption certificate.
"The effect of this fine is to punish people with long-term conditions for their illness.
"We'd like to see a far more constructive approach which supports and informs patients rather than make them bear the bureaucratic burden of an unfair system."
An NHS Business Services Authority spokeswoman said: "It remains the patient's own responsibility to check their entitlement before claiming free prescriptions.
"To be clear, it is written in regulation that it is the exemption certificate that entitles a patient to free prescriptions, not the medical condition alone."