The move comes at a time when drug manufacturers are facing an uphill battle when trying to get expensive new drugs approved for reimbursement and the UK is lagging behind other western countries in giving cancer patients access to new drugs, with resultant poorer survival rates, according to a study recently published in cancer journal Annals of Oncology.

If it proves successful, this novel approach could therefore potentially revolutionise cancer drug reimbursement in the UK, however, it may leave other drug firms gritting their teeth at the prospect of having to follow suit and put their "money where their mouth is".

The drug involved is called Velcade (bortezomib) and is designed to extend the life of multiple myeloma sufferers. However, six months ago, The National Institute for Health and Clinical Excellence (NICE) had rejected a recommendation to allow national Health Service (NHS) reimbursement of Velcade, on cost grounds - treatment with the drug can cost up to £18,000 (€26,600) per patient.

However, since Janssen-Cilag, a UK-based division of Johnson & Johnson offered its "money back guarantee" NICE has reversed its decision and recommended that the drug be made available on the NHS for multiple myeloma sufferers in England and Wales who respond well to it.

If NICE's recommendations are upheld, "all suitable patients" will have access to the treatment, and the NHS will fund the drug for those patients who display a full or partial response. 60 to 70 per cent of patients are expected to fall into this bracket.

Janssen-Cilag will refund the NHS for the money the NHS spends on giving the drug to the remainder of patients who have shown an inadequate response.

The finer details of the arrangement are yet to be hammered out, however. In a consultation document NICE has proposed that the patient response criteria should be a 50 per cent or more reduction in a particular multiple myeloma protein, determined by a blood test, and that this should be achieved by four treatment cycles.

Andrew Dillon, NICE Chief Executive, said: "We are aware of the challenge that the NHS faces in ensuring that patients can access expensive, but potentially effective, treatments for life-threatening conditions such as cancer.

"If the drug's manufacturer accepts the proposals we are consulting on today, it will mean that when the drug works well the NHS pays but when it doesn't the manufacturer should bear the cost. All patients suitable for treatment will get the chance to see if the drug works well for them."

However, Janssen-Cilag is arguing that the bar should be lowered to a 25 per cent or more reduction in the protein and would like patients to have longer than four treatment cycles to achieve this.

Nearly 4,000 people in the UK are diagnosed with this form of cancer each year and there are 20,000 sufferers in the UK at any one time. The incidence of this disease is increasing faster than any other cancer in the Western world and has increased by 30 per cent over the past 30 years

The life expectancy of a newly-diagnosed myeloma patient is three to five years. Patients who respond to Velcade can expect to live an average of two to three years longer although some patients have managed to survive as long as seven years longer.

A final agreement on whether this scheme will indeed go ahead is expected between The Health Department and Janssen-Cilag later this year.

Meanwhile this innovative approach by a drug company could signal a paradigm shift in the way NICE negotiates reimbursement with manufacturers of new drugs. While welcomed by the cash-strapped NHS, this new methodology may not be embraced wholeheartedly by drug companies who stand to lose potentially millions of dollars in lost revenue if the practice becomes widespread. Several pharmaceutical firms were approached for comment on the issue by Outsourcing-Pharma.com:

"Unfortunately Novo Nordisk cannot comment on Janssen-Cilag's offer to the UK government," said the Danish drug firm.

"We do not comment on the actions of other companies," said a spokesperson from Bristol-Myers Squibb.

AstraZeneca, GlaxoSmithKline and Janssen-Cilag were all contacted for comment however Outsourcing-Pharma.com did not receive a response prior to going to press.

Meanwhile, Andrew Jones, Pharmaceutical analyst from Ernst & Young said: "The agreement offers the prospect of a win-win situation for patients, the NHS and Industry: patients get access to a new medicine; the NHS ensures efficiency of expenditure and the manufacturer secures an opportunity to get a return on its investment."

"The news should come as a welcome development to the biopharmaceutical industry which is being hit hard by pricing and reimbursement pressure across Europe. NICE's endorsement of the scheme signals willingness for flexibility, and if agreed and successfully implemented, the scheme could help guide future change to the UK system and support market access for other new therapeutics."

However, Jones cautioned that it did not solve the underlying budget problems plaguing the NHS and at the heart of this issue.

"Risk-sharing schemes offer a mechanism for the NHS to secure value-for-money from the drugs it purchases and achieve greater efficiency of expenditure. Unfortunately, such schemes do little to address the issue of affordability - the NHS will still have to find the budget to meet the cost of new and effective drugs," he said.

"With budgets under pressure across Europe, the issue of affordability raises the question of how the healthcare systems such as the NHS will be able to support the introduction of new and improtant drugs into the future without comprimising in other areas."