A new drug which treats multiple sclerosis has been rejected by the British watchdog for not being cost-effective and for questions around its clinical effectiveness.

The National Institute for Health and Clinical Excellence (Nice) said today that they have not been provided with enough evidence to suggest Novartis's new pill Gilenya, known as fingolimod, which was licensed in Europe in March, would be an improvement on current treatments.

As a result of this decision, payment for the drug by the NHS will not be recommended.

Carole Longson, director of Nice's health technology evaluation centre, said: "Unfortunately, our independent committee wasn't given sufficient evidence to show that fingolimod could reduce relapses considerably better than the other treatments currently being used."

Gilenya is cheaper in Britain than in the US but still costs around £19,000 per person a year, according to Nice, making it an expensive drug to administer.

The pill marks a departure from existing drugs which have to be injected. Nice said that comparisons against existing treatments should have been provided, rather than just results where the drug is compared against a placebo.

The decision was met with disappointment from the MS Trust charity, who said that Nice have denied 5,500 people with MS a valuable extra treatment option.

Simon Gillespie, chief executive of the MS Society, said it will "leave some people with no effective treatment option".

He added: "Access to MS treatments in the UK is very poor - in fact people with MS would be better off living almost anywhere else in Europe - and this decision will only deepen that inequality."

Novartis said that the drug is "a highly efficacious and cost-effective treatment" and have agreed to work with Nice to hopefully change their decision before the final ruling in November.

Despite the decision by Nice, Thomson Reuters Pharma predict that sales of the drug will reach $2.2 billion a year by 2015, due to the preferable dosing and encouraging results from clinical trials.

The pill is the first of its kind but competitors are being developed. One alternative, laquinimod from Teva Pharmaceutical Industries, produced disappointing clinical trial results earlier this week.

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