The report on the future of the NHS also suggests a new, wider role for nurses which would allow them to carry out tasks at present undertaken by doctors.
Plans to demand proof that drugs are cost-effective before they are put on the market could force companies to relocate outside Britain, an industry spokesman said last night.
A draft consultation paper approved by the Prime Minister says that in future both the overall benefits and the costs of drug treatment must be considered. "Drug companies will have to be more forthcoming with information on their products. In the future the NHS will be looking for further and better particulars about the effectiveness of drugs and their cost-effectiveness," it says.
The paper, drawn up by a policy commission co-chaired by Frank Dobson, Secretary of State for Health, says Labour recognises the importance of commercial drugs research carried out in Britain. But the suggestion that firms might have to jump an extra hurdle before they can sell their products was greeted with dismay by the industry. At present, companies have to prove that drugs are safe and effective and that their manufacturing process has adequate quality control.
Richard Ley, spokesman for the Association of the British Pharmaceutical Industry, said it was not possible to assess costs properly before drugs hit the market. "Many companies might be looking at whether their research is correctly based in this country... They might well be starting to say to themselves, 'I'm not sure we are necessarily based in the right place'."
Drug trials on a few thousand people could not be used to gather evidence on possible prices for the drugs, he said.
Between 1986 and 1996, the NHS drugs bill almost tripled from pounds 1.6bn to pounds 4.5bn. This was partly because more drugs were prescribed and partly because the average cost of a prescription rose from pounds 4.21 to pounds 8.12.
Controversy has blown up over a number of expensive drugs which are available in some health authority areas but not in others. Beta Interferon, a treatment for multiple sclerosis, costs around pounds 10,000 per year, while Taxol (pictured) - which is prescribed for advanced ovarian cancer - costs around pounds 7,000 per year.
A large-scale relocation by pharmaceutical companies would hit the British economy hard because the UK is one of the leading centres in the world for drug research.
The paper, which has already been discussed by Labour's National Policy Forum and which will be debated in at least 45 local policy forums around the country, also asks whether nurses' roles should be broader.
"Restrictions on extending opportunities account for the top three reasons why nurses leave the NHS. Is there too much rigidity between professions, for example between doctors and nurses - would more flexibility between professions enhance job fulfilment?" it asks.
The Royal College of Nursing has already successfully pushed for a change in the law which allows nurses to employ doctors instead of doctors employing nurses. Two clinics are already run by nurses but employ general practitioners to come in and help.
A spokeswoman said "nurse practitioners" were already able to screen patients themselves, admit or discharge people and prescribe drugs. But this was not a cheap option, she said. Nurses wanted more resources as well as more freedom.
A Labour Party spokeswoman said negotiations on the cost of drugs were already going on as part of discussions through an existing forum on pricing. "This is really about how pharmaceutical companies and the NHS can work together."