NHS England will have the power to delay the adoption of new drugs that will cost more than £20m a year under newly-agreed changes to the NICE evaluation process.

At its board meeting yesterday, NICE backed proposals for a budget impact test for drugs that will cost more than £20m in any one of their first three years of use. Hitting that threshold will trigger price negotiations between the company and NHS England but – if no agreement can be reached – full introduction could be delayed by up to three years.

It is a sea change in NICE's appraisal process which currently holds that drugs deemed to fall under the upper cost-effectiveness threshold of £20,000-£30,000 per extra year of quality-adjusted life (QALY) for an individual patient are automatically recommended for NHS and should be made available within 90 days.

Now, NICE will also take into account the number of patients eligible to receive a new drug via the NHS, adding what some claim is an additional barrier to the adoption of new medicines.

The move will be introduced from April and, according to NICE chief executive Sir Andrew Dillion, "will enhance our ability to optimise access to innovative treatments in the light of the significant financial challenge facing the NHS". Last year, the NHS spent £16.8bn on medicines, according to the British Medical Journal, up 8% on the prior year and almost £4bn more than was spent in 2011.

The move has however already drawn swift criticism from patient and drug industry groups, who insist that it will introduce unacceptable delays in access to new drugs for patients.

Sarah Woolnough, executive director of policy and information at Cancer Research UK, said the move to introduce an "affordability test" was unacceptable, and that cancer patients could die as a result of the change.

"If NICE thinks a cancer treatment is clinically effective and represents value for money, then patients should receive it without delay," she added, estimating that the new hurdle would apply to one in five new medicines across all diseases. The additional barrier will disproportionately affect diseases with large numbers of patients, such as breast and lung cancer.

In a statement, Association of the British Pharmaceutical Industry’s (ABPI) chief executive Mike Thompson said the measures "break the Conservative Party's 2015 Manifesto promise to speed up the introduction of cost-effective medicines into the NHS".

"These new plans will prevent patients from receiving NICE-approved, cost-effective medicines, undermining their basic rights under the NHS constitution," he continued, claiming that thousands of patients will wait longer for treatment for conditions like heart disease, cancers and diabetes while medicines are held up in the system.

On a similar theme, Bioindustry Association’s (BIA) CEO Steve Bates said the decision by NICE and NHS England "sends an immediate, stark, negative signal to the global life science investors and companies that the UK needs to attract in the Brexit era".

"In addition the proposals will damage the UK," he added. "They will build a Hadrian’s Wall for English patients who will no longer be able to access innovative new treatments that will continue to be available in Scotland."

In a stick and carrot move, NICE also agreed to speed up the approval of cheaper drugs by almost five months under a new fast-track procedure for treatments which offer "exceptional value for money" – in other words a likely QALY of less than £10,000.

That proposal – first unveiled last year – is estimated to apply to only around 15% of all appraisals carried out by NICE in its entire history. NICE has indicated they would consider broadening the fast-track approach to a wider group of treatments, including medical devices and diagnostics, over the next two years.

The agency also announced that it will introduce greater flexibility in how it evaluates treatments for very rare conditions under its highly specialised technologies programme, raising the upper threshold limit to £300,000 from £100,000 for treatments considered to offer substantial clinical benefit.