Roche breast cancer drug at centre of UK pricing row

* Agency says price for Roche's Kadcyla still too high

* Stand-off reflects growing tension over drug pricing

By Ben Hirschler

LONDON, Nov 17 (Reuters) - A Roche drug that can prolong the lives of some women with advanced breast cancer has been plunged back into the centre of a drug pricing row after Britain's health cost agency declared that it is still too expensive.

The stand-off shows how the price of medicines is as pressing and emotive an issue in Europe as in the United States, where Democratic presidential candidate Hillary Clinton has promised to clamp down on alleged profiteering by the drug industry.

Britain's National Institute for Health and Care Excellence (NICE (Milan: NICE.MI - news) ) said on Tuesday that the price of Roche's Kadcyla remained too high to justify its use on the state-run National Health Service (NHS).

Kadcyla has become a test case for drug access in Europe, where NICE has taken a lead in assessing the cost-effectiveness of new medicines by weighing the benefits they offer against a standard benchmark.

Two weeks ago Kadcyla was included in the Cancer Drugs Fund that covers drugs not routinely paid for by the NHS, after Roche offered a significant discount.

NICE, however, said it had been offered a different, smaller discount by the company and, as a result, Kadcyla was not deemed cost-effective for routine, long-term use.

Kadcyla costs about 90,000 pounds ($137,000) per patient at its full list price, according to NICE. Roche contends the cost is actually somewhat less because the drug is typically given for shorter periods than NICE assumes.

Roche CEO Severin Schwan, who slammed Britain's cancer drug system as "stupid" two months ago, expressed frustration at the rigid system used in Britain to determine value for money in healthcare.

"I fundamentally believe there is no objective answer to value of life," he told an FT pharmaceutical conference, noting that drugs spending in Europe accounted for only around 1 percent of gross domestic product.

Industry critics, however, argue that medicine prices are rising far faster than inflation, especially in cancer treatment, and returns demanded by the industry on newly launched products are unsustainable.

"There is no blank cheque big enough to solve this problem," said Karl Claxton, professor of health economics at the University of York, who helped develop some of the economic modelling used by NICE.

The pharmaceutical industry frequently points to rising research costs to justify high drug prices but Claxton said this was wrong-headed.

"It (Other OTC: ITGL - news) is exactly the other way round," he told the conference. "It is the price that people are willing to pay that determines how much you are willing to invest in marginal investments. That's the way capital markets work."

Global new drug launches hit a 17-year high of 46 last year, up from 29 in 2013, and the high pace of approvals has continued in 2015. But getting these products prescribed to large groups of patients is a challenge on both sides of the Atlantic. ($1 = 0.6582 pounds) (Reporting by Ben Hirschler; Editing by Mark Trevelyan)