A scheme to fast-track innovative new medicines to patients without waiting years to get a licence will be announced today by the government, which says it will give hope to patients and boost the pharmaceutical industry in the UK.

Under the scheme, any severely ill patient with a life-threatening or debilitating condition will be able to get new drugs that are still in development, even if they are not within the strict eligibility parameters for a specific clinical trial.

A company with a treatment it believes is promising will be able to get provisional approval from the Medicines and Healthcare Regulatory Agency once it has shown it is safe and may work. NHS doctors will then be able to prescribe it for their patients. The company will foot the bill but collect data that it can use when it eventually applies for a full licence to sell it anywhere in the world.

Behind the scheme is concern that the UK is no longer a favourite location for the drug companies to develop and trial new medicines. "Making Britain the best place in the world for science, research and development is a central part of our long-term economic plan," said the health secretary, Jeremy Hunt.

"This groundbreaking scheme will provide cutting-edge medicines earlier, give hope to patients and their families and save lives. And as part of our strategy for life sciences it will create more jobs and opportunities for people, helping secure a better future for our country."

Patients can get medicines at an early stage now if they join a clinical trial, but not everybody is eligible – they may be the wrong age, for instance, or have other diseases as well. There is also a lag between the end of the clinical trials and a licence being granted, when the drug may not be available.

"Time is of the essence for many cancer patients, particularly those with more advanced disease," said Harpal Kumar, chief executive of Cancer Research UK. "It can mean the difference between life and death. Therefore this scheme, which has at its heart the potential to bring promising new medicines to patients faster, is to be warmly welcomed."

The Association of the British Pharmaceutical Industry welcomed the scheme, which will begin in April, but it is not happy with the decision that the companies must pay for the drugs given to patients until such time as they are licensed.

"We note that the scheme is currently unfunded, which is an issue for some companies. This means companies have to bear the risk associated with the upfront investment that will be required to participate in the scheme," said Paul Catchpole, director of value and access, who added that they would be asking for a review of this aspect in a year's time.

George Freeman, Conservative MP for Mid-Norfolk, who has long campaigned for the scheme, said it would benefit small biotech companies and charities, which may have breakthrough drugs that they cannot afford to take all the way through the long and expensive regulatory process – increasingly the source of innovative medicines which are then bought up by big pharma.

They would get their drugs into NHS patients, hopefully giving them positive data which would attract investors for the large-scale clinical trials.

"In the last decade, Britain has slumped in the international league tables for adoption of new medicines," Freeman said. "This is driving pharmaceutical companies to close their R&D facilities here in the UK, as we have seen recently with Pfizer and Astra Zeneca.

"The truth is that waiting 10-15 years for pharma to develop a drug that works in everybody is no longer affordable or what we need. Tomorrow's medicines will be designed around specific patient groups, based on genetic and disease data."