The NSW Government will launch a statewide investigation into attention deficit hyperactivity disorder (ADHD) amid warnings doctors were creating a "Ritalin generation".
Health Minister Reba Meagher has also called for a national inquiry into the issue, citing concern among experts about the use of the drug to treat ADHD, News Limited newspapers reported.
It follows claims by a leading judge that doctors prescribing Ritalin had created a generation who were now committing violent crimes and coming before the courts.
Since 1992 the number of Ritalin prescriptions has risen from 11,114 to 264,000 last year.
Australia's ADHD diagnosis rate is among the highest in the world and 32,000 NSW school students are medicated for it.
"Community concern is escalating around prescriptions and use of these types of drugs to treat conduct disorders of children," Ms Meagher said.
She said there was "significant debate" in the clinical community about ADHD treatment.
"I have therefore established a review committee to carefully consider current practice in NSW public health services."
The committee will be comprised of some of the state's top clinicians, including Clinical Excellence Commission chief Professor Clifford Hughes.
It has been instructed to report back to the minister within three months.
Ms Meagher backed federal Labor health spokeswoman Nicola Roxon's call for a national investigation.
"The availability and prescription of these drugs is largely a matter for the commonwealth, so we believe this is best looked at at a national level," she said.