As the roll-call of NICE-approved drugs gets longer, health authorities are under increasing pressure to juggle budgets. Jeremy Davies reports

The rationing of expensive drugs has always been a headline-grabbing issue in the NHS, and most health authorities are more than happy to leave decisions about such treatments to the National Institute for Clinical Excellence. As long as the money is there to back up its recommendations, that is.

The latest NICE guidance, issued on 19 January, approved the use of three drugs - donepezil (Aricept), rivastigmine (Exelon) and galantamine (Reminyl) - for the treatment of Alzheimer's disease. It also approved riluzole (Rilutek) for motor neurone disease.

NICE claims that the total cost to the NHS of prescribing the Alzheimer's drugs is likely to be around£42m per year,£12m of which would result from 30,000 patients being prescribed a drug for six months at an annual cost of£800 per patient. The other£30m would arise if, as expected, around half of these patients showed sufficient response to the therapy to continue with the drug until either their condition became too severe to continue taking the drugs, or they succumbed to another disease.

But, NICE says, offsetting entry to nursing homes by improving people's condition with the drugs could produce significant savings as a result. It points out that a delay of just 12 weeks in entering a home costing£370 per week would save around£4,500 per patient. Were such a target achievable for the 15,000 patients in continuing drug therapy, this would translate to a saving of nearly£68m - which is more than half as much again as the initial investment.

At HA level, these estimates would translate broadly into local investments of around£400,000, for a future gain of around£700,000. HAs are supposed to set aside money to deal with these high-profile NICE decisions, and the government has made clear that it will hold local managers to account if they deviate from its guidance.

But finance directors point out that setting aside money to cover NICE guidance is an almost impossible task, which has the potential to take away money from other, equally pressing areas of service.

'The problem is that when you try to work out what NICE are likely to recommend, and the local implications of that, you're crystal ball gazing, ' says Mark Millar, director of finance and healthcare commissioning at Suffolk HA, and chair of the Healthcare Financial Management Association.

'If my pharmaceutical adviser says such-and-such drug would eventually cost£2-6m a year, but will impact in a phased way, how much should we set aside? If we overestimate hugely in one year, we could badly deprive other services of funds. '

For an HA to go the other way, and admit that it simply does not have the money to fund NICE treatments, appears to be beyond the pale, though, ifWiltshire HA's brush with the press last week is anything to go by.

Wiltshire's director of public health, Professor Philip Milner, told The Daily Telegraph on 25 January that the HA could not afford to follow NICE's Alzheimer's guidance, issued a week previously.

Professor Milner had outlined in a paper for an HA board meeting - held on the day the article appeared - how the authority was already having to delay implementation of NICE guidance on glycoprotein IIb/IIIa inhibitors (a drug for use in heart surgery), implantable cardioverter defibrillators (a type of pacemaker), and methylphenidate (a drug to treat attention deficit/hyperactivity disorder in children) because of financial pressures.

The report, written before the Alzheimer's guidance appeared, said the HA was already committed to spend just over£1m to cover NICE recommendations.

Professor Milner, talking after the Alzheimer's guidance hit his desk, estimated that a further£1m would now be needed.

After the board meeting, the HA issued a statement saying it welcomed the Alzheimer's guidance and would fully implement all NICE's recommendations.

HSJ sources claimed a Newsnight interview about the funding difficulties, scheduled for that evening, was hastily cancelled.

So where will the funding for the HA's sudden change of heart come from? According to the Department of Health, from Wiltshire's share of the£660m in extra NHS funding announced last year. In other words, the pot That is also supposed to pay for national service frameworks, waiting list initiatives, building programmes, pay awards, thousands of extra staff. . . A big pot, admittedly. But a bottomless one?