LONDON -(Dow Jones)- The U.K.'s health-cost regulator has decided to back an expensive cancer drug from Novartis AG (NVS) for treating chronic myeloid leukemia--but not one from U.S.-based Bristol-Myers Squibb Co. (BMY)--after the Swiss drug maker offered to cut the drug's price.

The independent National Institute for Clinical Excellence, known by its acronym NICE, said Wednesday it approved Novartis's Tasigna and the company's older drug, whose brand name is Glivec, for use in treating CML on the publicly funded National Health Service. The generic names for Tasigna and Glivec are nilotinib and imatinib, respectively.

However, NICE said it wasn't approving Bristol-Myers Squibb's Sprycel, also known as dasatinib.

CML is a cancer of blood-forming cells in the bone marrow that usually develops slowly, which is why it is described as a chronic form of the disease.

NICE director Carole Longson said: "The recommendations reaffirm the use of imatinib as an effective treatment for the majority of patients and a cost-effective use of NHS resources, and we are also very pleased to be able to add a further treatment option for these patients by recommending nilotinib.

"Although no trials directly comparing dasatinib and nilotinib were available, the committee concluded from indirect comparisons that dasatinib and nilotinib could be considered equally as effective in treating CML.

"However, the manufacturer of nilotinib has already agreed with the Department of Health to provide the drug to the NHS at a discounted price. This reduction in cost enabled the independent committee to approve nilotinib for use on the NHS."

Dasatinib and nilotinib both cost over GBP30,000 per patient a year and the standard dose of imatinib costs GBP20,000.

NICE didn't disclose the price discount offered by Novartis for nilotinib.

-By Sten Stovall, Dow Jones Newswires; +44 207 842 9292; sten.stovall@dowjones.com