Health service chief executives care more about managing their budgets than saving the lives of their patients, the head of the country's medicines watchdog said yesterday.

Professor Sir Michael Rawlins, chairman of the National Institute of Clinical Excellence (Nice), said NHS managers would prefer that some new drugs were not invented at all so they wouldn't have to pay for them.

He was backed by Sir John Bell, President of the Academy of Medical Sciences, who described the NHS as a "repulsive force to innovation".

Speaking in his capacity as head of the Academy's working party on health research, Sir Michael said: "The traditional attitude of an NHS chief executive when he hears there is a new drug [which] may save lives but is going to cost him money is: 'Oh my God another new drug, another hit on my budget and I really wish that the company who manufactured it had never done so.'"

Nice has responsibility for deciding which drugs and treatments should be available on the NHS. But as part of the Government's health reforms, that power will be stripped away and given to new local GP Commissioning Boards. Critics of the plan believe this will lead to more drugs being rationed as the NHS tries to save £20bn over the next four years.

Sir Michael added that hospital trusts were also far too reluctant to take part in research into new drugs and treatments, which in the long term could have significant benefits for both their patients and the wider UK economy.

"UK hospitals should be proud of the research that they do. In the United States the great teaching hospitals use the fact that they are doing research as a great advertising opportunity," he said.

Giving their response to the Government's Health Bill, Sir Michael and Sir John said it was vital that research and innovation was enshrined in the new legislation.

Sir John said: "Research is one of the key areas which needs to be thought about in reforming the NHS, because the NHS has been a spectacular repulsive force when it comes to innovation and if you're thinking about reforming it you need to address this."