The world's largest drugs company, Pfizer, warned European governments yesterday that attempts to limit the use and price of new medicines threatened the survival of the pharmaceutical industry in Europe.

"In the 1980s, Europe was known as the world's medicine chest. At present, does anyone still believe this?" chairman and chief executive Mr Hank McKinnell asked delegates at a Financial Times pharmaceutical conference. He said firms chose to locate in the US because potential return on capital is higher due to free-market pricing. Pfizer employs 1,500 people in Cork and Dublin.