The Innovation Pass pilot, which will run for three years, is to be funded from a ringfenced £25m budget in 2010/11.

The pilot will allow patients who have rarer diseases to access innovative new drugs that have not yet been appraised by NICE. 

The small number of patients on these drugs means there is a lack evidence so NICE cannot conduct a full assessment for their use on the NHS.

The pilot will allow data to be collected on the impact of these new drugs on patients and their cost effectiveness, helping contribute towards a future NICE appraisal.

The announcement, made by health minister Mike O'Brien and science and innovation minister Lord Drayson on Friday, follows the Office for Life Sciences (OLS) blueprint in July.

This document set out the Government's commitment to create the innovation pass pilot.

Only licensed drugs will be included in the scheme and NICE is to develop the eligibility criteria for the pilot.

All drugs included on the pilot would be submitted for NICE appraisal at the end of the three years.

The consultation will run until 8 February 2010.