The DH plans to replace the current drug pricing agreement with a new, value-based system from January 2014.
Under the proposal, first set out in December 2010, NICE will no longer have the final say over whether a drug should be funded by the NHS. This will be decided by the DH following negotiations with manufacturers, and will be based on the wider value to patients and the NHS.
But an MPs' health select committee report in January said it was 'unacceptable' the scheme was still not adequately explained with less than a year to go.
Now, GP leaders have added their voices to growing concern over the plan.
GPC prescribing lead Dr Bill Beeby said: 'So far I haven't seen a worked example of how value-based pricing will be operated. All we've had is an explanation of the theoretical concept, that reimbursement of drug price will be dependent on value.'
He added: 'The concept of value-based pricing sounds a good idea when you talk about it, but it doesn't translate into something easy to implement.
'It's a soundbite, smoke and mirrors, and nobody's come up with an explanation of how it works.'
Dr Beeby warned: 'I hope people aren't stuck with it to the point of not being able to admit [if] the concept has flaws in it. If they try to fit a square peg into a round hole, it wont be any better than system we've got.'
The DH was forced to deny speculation that it had signed a joint statement with the Association of the British Pharmaceutical Industry (ABPI) to 'open up' talks on the plans. Negotiations on the new system between the two parties have been held behind closed doors.
A DH spokeswoman said: 'We will respond formally to the health select committee’s report in due course.'
GP understands a formal response will be made by the end of March.