The Science and Technology Committee analysed scientific literature on homeopathic treatment and found no evidence of efficacy.
Homeopathic products should no longer be licensed by the MHRA because they are not medicines, the committee advised.
The NHS spends £4 million on homeopathy annually, according to the Society of Homeopaths.
In the report the select committee criticised the government for a ‘mismatch' between evidence of efficacy and policy.
‘It sets an unfortunate precedent for the DoH to consider that the existence of a community which believes that homeopathy works is 'evidence' enough to continue spending public money on it,' said chairman of the committee Phil Willis (Liberal Democrat, Harrogate and Knaresborough).
Explanations for why homeopathy would work are ‘scientifically implausible' and there is no evidence of how it works beyond the placebo effect, they concluded.
The Royal Pharmacuetical Society (RPS) welcomed the findings. ‘The society believes that all medicines available on the NHS should be efficacious and give value for money,' said RPS chief scientific advisor Jayne Lawrence.
In a joint response, the DoH and MHRA said they appreciated the ‘strength of feeling' for and against homeopathy on the NHS and would review the report. Until then, PCTs and clinicians were ‘best placed' to decide what treatment is appropriate for their patients. ‘This includes complementary or alternative treatments such as homeopathy,' said the DoH and MHRA.