Novartis, the Swiss pharmaceutical group, warned yesterday there was no economically sustainable system that could provide low-cost innovative medicines to the developing world.

Daniel Vasella, the company's chief executive, unveiling plans to take further losses on a pioneering malaria drug, said he was being forced to subsidise production of Coartem, Novartis' new combination therapy for malaria, by more than $10m (€8m, £5m) a year in order to boost orders towards the levels of current production capacity.