(Adds background and comment from Department of Health.) By Sten Stovall Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Britain's healthcare cost-effectiveness watchdog Wednesday said it could not approve publicly funded use of GlaxoSmithKline PLC's (GSK) oral breast cancer drug Tyverb, saying the medicine didn't represent good value for money when compared with the alternative currently available treatment. The independent National Institute for Health and Clinical Excellence said its draft guidance advises against National Health Service funding of Tyverb, or lapatinib, in combination with Roche Holding AG's (RHHBY) cancer drug Xeloda for the treatment of an aggressive form of advanced breast cancer. The regulator's guidance follows its initial rejection of Tyverb last year and comes despite Glaxo's attempts to change NICE's stance by offering a so-called patient access program giving NHS patients Tyverb for free for the first 12 weeks of treatment. Tyverb received conditional marketing approval in Europe two years ago. NICE Chief Executive Sir Andrew Dillon said in a statement that "We are disappointed not to be able to recommend lapatinib but evidence suggests it only extends life by a small amount of time--around 10 weeks or 2.4 months--and costs thousands of pounds more than one of the more commonly used NHS treatments for this indication--capecitabine on its own." Glaxo's U.K. general manager, Simon Jose, responded by saying that "GSK has worked really hard to offer the best possible value to the NHS, which makes this decision particularly disappointing. It again highlights the limitations of the NICE appraisal process when evaluating cancer treatments for patients facing a relatively short life expectancy... We will continue to offer the patient access program to the NHS despite this ruling." Criticizing the latest decision, Dr Alison Jones, medical oncologist at the University College London Hospital and London's Royal Free Hospital, said: "NICE's decision places the U.K. in contrast to other European countries, which allow access to this much needed treatment option for their patients. This is an effective oral treatment that can offer significant extra time and is the only option for some women." The issue will further fan debate over how NICE rations access to healthcare services based on cost-effectiveness. The country's new Conservative-led administration last month said it wants to revamp NICE with so-far undetailed steps which would "reform NICE and move to a system of value-based pricing, so that all patients can access the drugs and treatments their doctors think they need." When asked for its reaction to NICE's latest decision, the U.K. Department of Health said: "We respect the expert independence of NICE, and believe that it must be allowed to continue to issue guidance free from political interference. However, we believe that there are fundamental failings within the wider system for drug pricing and access. We are determined to address this and are clear that NICE plays a vital advisory role. "There will be significant reforms to the way in which we pay for drugs so that we can give effect to our intention that patients can access the drugs most clinically effective for them; and that the price paid by the NHS reflects value for money. In the meantime, Primary Care Trusts should continue to consider carefully whether there are particular local or individual circumstances that would make it appropriate to fund drugs NICE has been unable to recommend for routine use," it added. NICE said consultees have until June 24 to appeal against its decision. -By Sten Stovall, Dow Jones Newswires; +44 207 842 9292; [email protected] (END) Dow Jones Newswires June 09, 2010 11:10 ET (15:10 GMT)