Patients want unrestricted access to Alzheimer drugs like Aricept / Getty Images

Tens of thousands of sufferers from early stage Alzheimer's disease had their hopes of treatment raised yesterday after the pharmaceutical industry scored its first victory in a three-year battle with an NHS drugs watchdog over access to the drugs.

The Court of Appeal ruled that the National Institute for Clinical Excellence (Nice) had failed to act with transparency over the way it made a decision to refuse use of the drugs on the NHS for early stage disease. The 2006 ruling limited use of the drugs to patients with more advanced "moderate" disease.

The decision to restrict the drugs has been the most controversial in Nice's nine-year history. In a final ruling issued in November 2006, Nice said the drugs were not cost effective in early stages of the disease and recommended they only be prescribed when it had progressed to "moderate". Although the drugs cost only £2.50 a day, Nice said they did not work for everybody and had only a small effect.

Eisai, the Japanese maker of one of the drugs, Aricept, challenged the process by which Nice reached its decision, complaining that the Institute had refused the company access to the computer model it used to calculate cost effectiveness.

The pharmaceutical industry has argued for years that the Nice process is not as transparent as it should be. Rather than grant access to the computer model, Nice had challenged Eisai to say which numbers were wrong and why. It has always refused access to the computer model because it feared companies would manipulate figures until they reached a result which met Nice's cost effectiveness criteria while maximising profits.

Yesterday the Court of Appeal ruled that Nice's refusal to allow companies access to the cost effectiveness model was "procedurally unfair". Lord Justice Richards said withholding information put drugs companies at "a significant disadvantage" if they wanted to challenge a ruling.

Nick Burgin, managing director of Eisai, which brought the case with Pfizer, said: "As soon as we have reviewed their cost effectiveness calculations we will submit any new findings to Nice. We hope this action will ultimately restore access for patients at the mild stages of Alzheimer's disease." Patients' groups welcomed the decision. Neil Hunt, chief executive of the Alzheimer's Society, called it a "damning indictment of a fundamentally flawed process".

Andrew Dillon, chief executive of Nice, said the institute would "consider very carefully" the implications of the court's decision but dampened expectations of any change in NHS access to the drugs. "We will provide Eisai with an executable version of the economic model used in our appraisal, so that they may comment on it. We will then take those comments into account. It is important to recognise that we have not been asked to amend or withdraw our guidance on the use of these drugs to treat Alzheimer's disease," he said.

Mr Dillon warned that the court's ruling could delay decisions on new drugs by "increasing the complexity of our appraisals". He added: "The decisions Nice makes are among the most difficult in public life."