NHS organisations that lose patients' medical records could soon face fines of up to £500,000.
Information Commissioner Christopher Graham said he wants to see harsher punishments brought in for hospitals and health trusts to bring an end to the 'disturbing' trend of losing data.
It is feared that millions of people have had their personal records lost by health staff who have misplaced documents, laptops and memory sticks.
Mr Graham told The Independent that data losses among the health service were too common, and said he planned to discuss the problem with NHS chief executive Sir David Nicholson.
He said: "The senior management is aware of the challenge but the breaches continue. Whether it's a systemic problem in the NHS or an epidemic we have got to do something about it.
"Health service workers look after their patients very carefully but don't always look after their data very carefully."
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