UK's NICE reconsiders block on Glaxo cancer drug

* NICE review will consider Tyverb use as end of life drug

* Move follows partial victory for Glaxo at appeal

LONDON, July 9 (Reuters) - Britain's cost-effectiveness watchdog is to reconsider a decision blocking the use of GlaxoSmithKline's GSK.L breast cancer drug Tyverb on the National Health Service (NHS).

The National Institute for Health Clinical Excellence (NICE), which assesses drugs for reimbursement on the state health service, had ruled in March that the treatment had limited benefits and was too expensive. [ID:nL4649364]

But elements of a Glaxo appeal against the decision have now been upheld in the light of new supplementary NICE advice for the assessment of treatments in small patient populations with a short life expectancy, the agency said on Thursday.

The move means Glaxo and other interested parties will have a fresh opportunity to make a full submission to NICE under the new end of life criteria, which were introduced in January.

Although Britain is only a minor market for Glaxo, the rebuff from the cost-effectiveness agency in its home market was a blow, since Glaxo aims to make Tyverb -- also known as Tykerb or lapatinib -- a key part of its expanding business in cancer.

Decisions from NICE, which has a track record of rejecting a number of other pricey new medicines, are closely followed by governments and healthcare insurers worldwide.

In a bid to bring down the cost of treatment, Glaxo has already initiated a programme in Britain to pay for the first 12 weeks of treatment, with the NHS only paying for those patients who still benefit from the drug after that.

Tyverb is the first once-daily pill for breast cancer patients who over-express a protein called HER2. It is used in combination with Roche's ROG.VX drug Xeloda and the two drugs together cost around 25,000 pounds ($40,000) a year. ($1=.6224 pounds) (Reporting by Ben Hirschler; Editing by Mike Nesbit)