UPDATE 1-Roche's Avastin again spurned by British cost body

* NICE says drug not cost-effective for bowel cancer

* Rebuff comes despite revised pricing offer from company

* Avastin may be made available under new Cancer Drugs Fund

* Roche shares down 0.7 percent in weaker market

(Adds analyst comment, shares, sales figure)

By Ben Hirschler

LONDON, Aug 24 (Reuters) - Britain's healthcare cost agency NICE rejected Roche's (ROG.VX) drug Avastin for advanced bowel cancer again on Tuesday, saying it was too expensive, despite a fresh price deal offered by the manufacturer.

The decision highlights a continuing battle over access to pricey cancer medicines on the state health service in Britain, where drugs that can extend life by several months, and are often used widely elsewhere, are sometimes deemed too expensive.

Avastin, Roche's top seller, had global sales last year of $6 billion.

The National Institute for Health and Clinical Excellence (NICE) first rebuffed Avastin four years ago and the latest rejection is a blow to the Swiss drugmaker, as well as patient groups that had been pushing hard for a change of heart.

Andrew Dillon, NICE chief executive, noted the cost watchdog recommended several other drugs for bowel cancer, including Merck KGaA's (MRCG.DE) Erbitux, but said Roche failed to show its "complex" price scheme would make Avastin cost-effective.

"We have to be confident that the benefits justify the considerable cost of this drug," Dillon said in a statement.

Mike Ward, an industry analyst at Ambrian Partners, said the decision was unlikely to have a significant impact on Roche as Britain accounted for only some 3 percent of the global prescription drug market.

Some investors, however, are concerned that current high cancer drug prices could come under pressure in other markets, too, as governments and insurers seek to cap runaway healthcare bills in an age of austerity.

Roche stock was down 0.7 percent at 0845 GMT, broadly in line with a 1 percent decline in the European sector .SXDP.

Roche originally proposed a patient access scheme that would supply Avastin at 20,800 pounds ($32,430) per patient for one year, after which it would be free. The cost of accompanying oxaliplatin chemotherapy would also be reimbursed by Roche.

The new offer would have included these elements plus an additional upfront payment to the National Health Service (NHS) for each person starting on Avastin.

The latest draft guidance from NICE is subject to consultation and appeal.

CANCER DRUGS FUND

Roche said the fact Britain was now virtually the only country in the developed world not to provide Avastin as part of state healthcare showed that the country's reimbursement system was not working for end-of-life cancer treatments.

Barbara Moss, a 55-year-old bowel cancer patient who benefited from Avastin after paying for it out of her own pocket, said the NICE decision was a huge disappointment.

"It seems immoral to me that, as a result of negative NICE decisions like this one, people's choice of living or dying depends on whether they can afford a drug, because it isn't available to them on the NHS," she said.

The charity Bowel Cancer UK said it hoped there would soon be fairer access to treatments, following the establishment by the coalition government of a Cancer Drugs Fund, which would provide money for drugs that have not been cleared by NICE. Doctors will decide locally how the money is spent. [ID:nLDE66Q1V0]

Since 2002, NICE has assessed 94 cancer drugs, of which 66 have been recommended for use. ($1=.6413 Pound) ($1=1.041 Swiss Franc) (Editing by Sharon Lindores and Louise Heavens)