Patients will now be able to receive osimertinib on the NHS, following the publication of final draft guidance by NICE.
The drug is used to treat a form of advanced lung cancer caused by a specific mutation known as EGFR T790M positive non-small-cell lung cancer.
Taken as a tablet once per day, it targets cancer cells directly, meaning patients can suffer less severe side effects than with other chemotherapy.
Trials for the drug found it helped stall progression of the cancer by an extra four months compared with another treatment, and over twice as many patients responded to treatment.
But the institute initially held off recommending the drug, which was only officially licensed in February, because its long-term benefits were unclear.
Cancer Drugs Fund
NICE finally opted to include it in the Cancer Drugs Fund after new trial data suggested it would be cost-effective provided the company, AstraZeneca, offers it to NHS England under an agreed managed access agreement.
NICE estimates around 300 patients every year in England and Wales will be eligible for the treatment.
A panel will assess the draft guidance and have the opportunity to appeal against it.
Professor Carole Longson, director of the health technology evaluation centre at NICE said: ‘People with this particular type of lung cancer usually have distressing symptoms and their disease can progress very quickly.
‘Osimertinib is clinically effective in the short-term. However, we do not have the full picture yet and we need more information on its long term benefits to find out if it is truly cost effective.
‘For the first time, we are able to give patients access to a promising new cancer treatment whilst more evidence is gathered on its effectiveness. This is the system working as it should.’
Dr Jonathan Fielden, NHS England’s director of specialised commissioning, said: ‘We welcome the publication of these draft recommendations which show that NHS England's new Cancer Drugs Fund can offer faster access for patients to new and innovative treatments.
‘The new approach allows NHS England to negotiate with the pharmaceutical industry, in this case AstraZeneca, to reach sound commercial agreement then enabling NICE to give the go ahead for osimertinib.
‘This shows the benefits of strong commercial, patient focused discussions really delivering for patients.’