Thousands more women could benefit from the life-saving breast cancer drug, Herceptin, at no increased cost to the NHS, by reducing the dose and duration of treatment, researchers suggest today.

But there is no mechanism for the Government's watchdog on medicines, the National Institute for Clinical Excellence (Nice), to consider a lower dose, even though it was set up to promote cost-effective use of drugs on the NHS, they say.

The disclosure reveals a flaw in the process for assessing new drugs, at a time when mounting NHS trust deficits have led to increasingly grim projections. Leaked government documents this week forecast future shortages of nurses as trusts sought to limit soaring wage bills.

Health economists from the University of Sheffield say Herceptin costs about £20,000 per woman for a year's treatment at the standard dose.

When the drug was approved for use in record time by Nice last year, it provoked protests from NHS trusts, which said they would be forced to cut other treatments to pay for it

Newbury and Community Primary Care Trust appealed against the Nice decision on the grounds that Herceptin was unaffordable and too many other patients would suffer. The appeal was rejected.

Latest findings published in The Lancet today show that Herceptin improves survival after three years by 2.7 per cent - described as an "extremely uncommon" result after such a short time by Professor Ian Smith, of the Royal Marsden Hospital, London, who led the study. In 10 years that could increase to a 15 per cent improvement, he said.

But members of the Sheffield University team who advised Nice on its original decision to approve Herceptin say they are now having second thoughts. Writing in The Lancet, they say a small study in Finland has shown that giving a fifth of the standard Herceptin dose, over a shorter time (nine weeks instead of a year) has equally good results in reducing the recurrence of cancer and deaths in the treated women. Further larger studies are required, they say, but if confirmed the finding suggests women could be treated with Herceptin at a cost of £2,000 instead of £20,000, reducing pressure on NHS budgets and allowing more women to be treated. The drug is suitable for 15 to 20 per cent of the 40,000 new cases of breast cancer a year.

New Zealand's drug authority has already concluded that uncertainty over whether the standard dose is necessary is "too great to justify the expenditure" and is considering recommending a lower dose regime.

But in the UK, Nice said it was restricted to assessing "licensed indications" and Roche, the manufacturer, had sought marketing authorisation for a one-year schedule only.

Sue Ward, who led the Sheffield group, said yesterday: "The Finnish regime was not looked at by Nice because it was not a licensed indication. You could say that is a flaw in the process. Clinicians agree it requires further investigation."

Professor Smith said Roche was now researching a two-year regime. "Understandably there is not a lot of enthusiasm for a shorter duration of treatment [from Roche]."