Dr Richard Barker, director general of the Association of the British Pharmaceutical Industry, said restricting access to drugs led to patients missing out on the best care available.
This means patients cannot be included in many trials and creates a spiral in which care in the UK falls behind that in other countries, he said.
Dr Barker said NICE should recognise that when a drug is launched there may be limited data as to its effectiveness and value to the NHS in practice.
Rather than blocking access, the NHS should be allowed to use the drug and studies undertaken of how patients are benefitting, he said.
The NHS could then, he argued, become a 'living laboratory for healthcare innovation'.
Dr John Jeans, chief operating officer of the Medical Research Council, said the NHS should look at whether it could cut costs simply by checking whether drugs are benefitting particular patients or not.
The health White Paper aims to reform the way that drug companies are paid for NHS medicines.
It hopes a value-based pricing system will improve NHS access to effective drugs and innovative treatment.