The drug, called Aricept, has been licensed by the Medicines Control Agency for use in those with mild to moderate disease, who number about 200,000.
At a cost of pounds 1,000 a year for each person, the total bill could be an extra pounds 200m, which health authorities will find it hard to provide. But doctors, who have been running clinical trials on the drug, hope that it will not be seen in terms only of its cost to the Exchequer.
"It should be seen as a way to alleviate the burden of a terrible disease," said Dr Con Kerry, consultant in the psychiatry of old age at St Bartholomew's and Homerton Hospitals, east London.
"Those of us who work with the elderly feel strongly there should be money available. We don't think we have found a wonder drug, but we would like to be able to some patients in the early stages of Alzheimer's disease ."
The drug, which has been developed by Eisai Ltd, a Japanese company, and which is to be marketed in the UK by Pfizer Ltd, has been trialled on 450 people in the United States and is being tested on 750 people in Europe. Britain is the second country, after the US, to get a license for the drug, supplies of which will be available from 11 April. Harry Cayton, director of the Alzheimer's Disease Society, said: "I say two cheers for the drug. Phase Three trials suggest that about two thirds of patients show some measurable improvement. A small number of people improve a great deal; some people just stop deteriorating, and in some people there is no effect at all.
"There are anecdotal stories about some individuals making huge improvements. People have been able to go shopping again on their own and count their own money.
"I know someone who was a plumber, who was able to go back to work for a period of time. Some carers have been able to leave their relatives alone for the first time, which transforms their lives.
"If you have a fatal disease, even if it is a long, slow disease, an extra six months maybe a real improvement," Mr Cayton added.
"I have to say that I am disappointed that the Department of Health has not planned as well as it might have done for the arrival of this drug. We have known that it was going to get a license for about nine months, but no money has been made available."
The drug, which is of the same family as Tacrine (an earlier Alzheimer drug that never got a licence because of its side effects), works by inhibiting the action of a chemical called acetylcholinesterase. This chemical breaks down acetylecholine, which is important for the transmission of messages between the brain synapses. The drug has not been found to have any serious side effects.
Dr Kelly said: "The advent of treatment for this disease will give hope to many people and their carers. We have not got any scientific data yet show whether it is useful in the advanced stages of the disease."
500,000 people in the United Kingdom suffer from Alzheimer's disease
AD is one cause of dementia; other causes include: multi-infarct dementia (small strokes in brain); Pick's disease; Creutzfeldt-Jakob disease.
The total number of people suffering from dementia is about 670,000.
There are 17,000 aged between 40 and 65 with AD.
Cost of care for people with AD is about pounds 1.6bn per annum.
Almost three-quarters of family doctors feel that they do not have adequate training in dementia.
Famous people who have had, or are living with AD, include: the actress Rita Hayworth; footballer Danny Blanchflower; boxer Sugar Ray Robinson and ex-US president Ronald Reagan.Reuse content