Pfizer is to withdraw its arthritis painkilling drug Bextra in the United States and Europe after regulators said the risk of heart disease and life-threatening skin reactions outweighed its therapeutic benefits.

Patients taking Bextra, including about 10,000 in Britain, have been advised to consult their doctor to get alternative treatments.

The drug, also known as valdecoxib, had sales of $1.3bn (£690m) last year. The news came just days after the American company said it would have to lay off a significant proportion of its global workforce of 120,000 in an effort to cut costs by 12% - or $4bn (£2.1bn) a year - to cope with the loss of revenue from other treatments due to the expiry of patents.

The withdrawal of Bextra follows safety concerns about a similar arthritis painkiller, Vioxx, which was voluntarily pulled from the market by its manufacturer, Merck, last year due to evidence that it caused heart attacks and strokes. Both Bextra and Vioxx are from the same class of drug, known as Cox-2 inhibitors.

Pfizer said yesterday that it was asked to withdraw Bextra because of an increased risk of skin diseases, although US regulators thought that the risk of heart disease was similar to that of other drugs in the class.

The European Medicines Agency had already said the rate of serious skin reactions appeared to be greater for Bextra than for other Cox-2 drugs and warned doctors about the risks last year. Yesterday it said the withdrawal of the drug was an "interim measure" while it decided the fate of Cox-2 inhibitors.

Britain's Medicines and Healthcare products Regulatory Agency, said: "Patients should see their doctor at the next convenient appointment to arrange alternative pain-relieving treatment."

Regulators have reported a range of skin diseases in people taking Bextra, including the potentially fatal Stevens Johnson syndrome, where the patient's skin falls off. It is a rare allergic reaction to all drugs, although regulators have seen a higher incidence among people taking Bextra.

Since the withdrawal of Vioxx, the safety of Cox-2 inhibitors has been questioned. In February US scientists had recommended, by a slim majority, that Bextra and Vioxx should remain on sale, although there was some controversy because a proportion had had consultancy arrangements with drugs firms. European regulators are still deciding what to do and should report later this month.

The US food and drug administration, which governs the biggest pharmaceutical market in the world, said yesterday that all Cox-2 drugs must display a warning about possible heart and gut side-effects, as will related drugs such as ibuprofen.

The FDA will allow Pfizer's drug Celebrex to stay on the market with a strict warning, and said it would "carefully review" any proposal from Merck to put Vioxx back on the market.

The British drug company GlaxoSmithKline said it "remains committed" to its Cox-2 drug, which is undergoing clinical trials.

The withdrawal of Bextra is a blow for Pfizer, the world'slargest drugs firm, which has consistently denied there are risks from its arthritis drugs. The company said yesterday it "respectfully disagreed" with the FDA's decision on Bextra. "In deference to the agency's views, the company has agreed to suspend sales of the medicine pending further discussions with the FDA," said the company in a statement. It indicated that it would try to get it back on the market.