A drug that can extend the lives of women with advanced breast cancer has been approved for routine use on the NHS.

Charities and campaigners reacted with huge disappointment when the National Institute for Health and Care Excellence (Nice) rejected the drug, Kadcyla, on cost grounds in 2016.

But a deal has now been struck between NHS England and the manufacturer Roche, backed by Nice, to make the drug available to around 1,200 women a year in England. Until now, the drug has been funded only through the cancer drugs fund.

In clinical trials, Kadcyla, which has a full list price of £90,000 a year per patient, was shown to extend the lives of people with terminal cancer by an average of six months. It also dramatically improves quality of life, compared with other treatments, and reduces side effects.

Details of the price agreed between Roche and the NHS are being kept confidential.

Kadycla is for people with Her2+ breast cancer that has spread to other parts of the body and cannot be removed through surgery. Previous treatments, usually Herceptin, must have failed for patients to receive the drug.

Kadcyla, also called T-DM1, combines Herceptin with a potent chemotherapy agent. It works by attaching itself to the Her2 receptor on cancer cells, blocking signals that encourage the cancer to grow and spread. The chemotherapy element also goes inside the cell and causes it to die from within.

Kadcyla is given intravenously once every three weeks.

The chief executive of NHS England, Simon Stevens, speaking at the NHS Confederation conference in Liverpool, said: “NHS cancer survival rates are now at record highs, and this year we’re going to be making major upgrades to modern radiotherapy treatments in every part of England.

“NHS England is also taking practical action to drive greater value from taxpayers’ growing investment in modern drug treatments, and that work is beginning to bear fruit.

“Today’s announcement on Kadcyla shows that for companies who are willing to work with us, there are concrete gains for them, for the NHS and, most importantly, for patients able to get new and innovative drugs.

“In this case, tough negotiation and flexibility between the NHS and Roche means both patients and taxpayers are getting a good deal.”

Richard Erwin, general manager at Roche, said: “This is a positive example of how solutions can be reached when all parties show flexibility.”

Delyth Morgan, chief executive of the research charity Breast Cancer Now, said: “We are absolutely delighted that tough negotiation and flexibility by Nice and NHS England, and the willingness of Roche to compromise on price, have ensured that thousands of women with incurable breast cancer will be given precious time to live.

“We want to congratulate and thank the hundreds of thousands of women, men and families across the country for their relentless campaigning to ensure this crucial lifeline drug is routinely available to those that need it.

“However, this news comes at a time when there is a real possibility that Perjeta, the first-line treatment for this group of patients, could soon be removed from NHS use, with a decision imminent.

“Perjeta’s benefits are extraordinary, offering nearly 16 additional months of life to women with incurable breast cancer, and it is imperative that a solution is found to save this drug, at a cost affordable to both the NHS and the taxpayer.”

Prof Carole Longson, director of the centre for health technology evaluation at Nice, said: “The committee acknowledged the comments received from patients during the consultation on the draft recommendations for trastuzumab emtansine [the generic name for Kadcyla], in particular that 115,000 people had signed a Breast Cancer Now petition urging Nice and the company to ensure that it remains available.

“We are therefore very pleased that the company and NHS England have been able to agree a deal that will achieve this.”