UK patients and the healthcare system will suffer if the upcoming medicine pricing negotiations between the government and manufacturers fails to reward innovation, the pharma manufacturers' trade body has warned.

Stephen Whitehead, chief executive of the Association of the British Pharmaceutical Industry (ABPI), has urged the government to reward success in drugs development, saying he feared "for the future of UK medical research" if it failed to do so.

"The [forthcoming national] pricing negotiations [for branded medicines] will decide the future of pharmaceutical research in the UK," said Mr Whitehead. "If we minimise the reward for innovation in the UK, then our manufacturers will go abroad. Our industry, our economy, and our healthcare system will suffer – UK patients will suffer."

"The pricing negotiations will decide the future of pharmaceutical research in the UK," ABPI's Stephen Whitehead warned

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Mr Whitehead said the government was too focused on encouraging breakthrough drugs, failing to take into account the "significant gains for patients from incremental innovation in medicines". Explaining the huge cost of developing drugs in the UK, Mr Whitehead said manufacturers would be reluctant to take a £1 billion gamble "if there is no reward for success", adding: "We have to ensure that the huge risks discoverers and developers take are rewarded."

The ABPI chief's words come as the pharmaceutical industry gets ready for the next round of medicine pricing negotiations with the government this autumn, as prices are renegotiated every five years under the pharmaceutical price regulation scheme.

There is a limit on the profits companies can earn from supplying drugs to the NHS and, from January 2014, the government is set to switch to a "value-based pricing" system where medicines will be priced depending on the expected benefits to patients.

NPA chief executive Mike Holden has previously warned of the impact that value-based pricing could have on pharmacists, saying that unless the new system matched drug prices in other European countries, parallel export could lead to shortages of new medicines