Pfizer Germany said the changes - part of a wide-ranging programme of public spending cuts - unfairly penalise drug companies.

The comments came from the head of Pfizer Germany, Walter Koebele, in an interview with Die Welt newspaper.

Pfizer - which employs 6,000 people in Germany - said it had already decided to move its research department, which employs 150 people, from Freiberg, in the south west of Germany, to the UK.

Greater competition

Chancellor Gerhard Schroeder is pushing through reforms to Germany's health, welfare and employment systems as he battles to breathe life into the country's moribund economy.

The health reform package include greater competition in provision and higher patient contributions.

Companies will also be forced to offer discounts on new "innovative" medications - a step that will hurt companies like Pfizer, Mr Koebele said.

"The compromise on health care reform puts the burden on those who are pushing for advancement in medical care," he said.

"Leading pharmaceutical companies are in no way the winners of this reform, as it is often claimed."

Hurdle cleared

Mr Koebele added that the company's growth forecasts in Germany were further grounds for its cost-cutting drive.

"We are not growing to the extent we had planned," he said.

Growth in turnover was only expected to remain in the single digits, he added.

Germany's centre-left coalition and the conservative opposition on Friday cleared the remaining obstacles to a joint draft law on health care reforms.

The legislation, which will be presented to the Bundestag lower house of parliament in September, would lower contributions to the state health care system to 13.6% of gross salary in 2004 and 12.15% in 2006.

The measures are expected to come into effect in 2004.