The US moved closer yesterday to starting a trade dispute with Europe over what it claims are the low price of prescription drugs in Europe.

American politicians have increasingly complained in recent months that US patients pay higher prices for drugs and as a result support a larger part of medicine research costs.

Speaking at a gathering of health ministers in Paris, Mr Tommy Thompson, the US secretary of health, said yesterday the administration's complaint about drugs prices could be taken to the World Trade Organisation.

"European drugs prices are starting to act as a barrier to trade," he said. As the main body to encourage free trade, the WTO "should probably be strongly considered as an avenue to explore this issue", he said.

According to IMS Health, the healthcare information group, the US accounts for 54 per cent of global pharmaceutical sales and analysts believe it makes up a much larger share of industry profits. Although it is hard to calculate the difference in prices between the US and Europe because of the free samples and discounts companies offer in the US, analysts and industry executives agree that US prices are significantly higher.

Mr Thompson called on Europe to spend more on research. "I don't think the US can continue to fund all the research. Other countries should share the cost," he said. "We need to do more on drug pricing. We need more of a free markets system than currently exists."

However, Mr Thompson's comments were met with scepticism by some European representatives. Mr Pascal Couchepin, head of Switzerland's department of home affairs, said it would be naive to take his comments at face value as there were now few strong pharmaceuticals companies left in Europe.

"I'm worried that Americans talk about sharing the burden of research when research is concentrated in US and when the European industry is weak." The recent Medicare reform bill in the US called on the US Trade Representative to investigate drugs pricing in other countries.