The health secretary Patricia Hewitt has taken the unprecedented step of telling two drug companies that are blocking a cheap cure for blindness from use in the NHS that they should put it through clinical trials and seek a licence.

Ophthalmologists in the US and the rest of Europe are successfully using a bowel cancer drug called Avastin, split into tiny doses, to save the sight of thousands of people with a common condition that quickly leads to a loss of vision.

The injections can cost as little as £10 and often only a couple are needed to treat the illness, wet macular degeneration. But Genentech, the manufacturer, and Roche, which markets it in the UK, will not put the drug through the trials necessary for it to get a licence in the UK.

Instead, Genentech has produced a far more expensive version called Lucentis, which costs more than £1,000 a shot and needs monthly injections. Lucentis recently got its European licence and is now being appraised by the National Institute for Clinical Excellence. But the bill to the NHS, if it is approved for general use, will be huge.

According to consultant ophthalmic surgeon Michael Lavin from Manchester Royal Eye Hospital: "If all patients with wet AMD in the UK were treated with standard dose Lucentis costs to the NHS by year two would be approximately £1,008m a year; if Avastin were used the cost would be about £4m a year.

"The profit margins for a commercial company are substantially greater with Lucentis than with Avastin use."

Ms Hewitt would like to see Nice evaluate Avastin as well as Lucentis but, said a Department of Health spokesperson, Nice could only appraise Avastin for eyes if it had a licence for that use. "The problem is that the companies concerned - Genentech which manufactures it and Roche which distributes it in Europe - have not applied for a licence for its use on macular degeneration, and no clinical trials have been conducted for that purpose," Ms Hewitt told health select committee chair Keith Barron during minister's questions in the Commons.

"Although we cannot require the companies concerned to apply for a licence, in view of the very promising results that have been reported by a number of doctors I urge both companies to initiate clinical trials for the use of Avastin for people with macular degeneration and to consider applying for a licence in the light of those trials."

Mr Barron told the Guardian: "It is quite clear that if Avastin use is as good as the use of any other drug and is far less expensive, I would have thought common sense directs you to use it."

Avastin has begun to be used by some doctors in the UK. One ophthalmologist has persuaded two primary care trusts, Bolton and Salford, to pay for the drug so he can treat people on the NHS.

But some cash-strapped PCTs are showing reluctance even to pay for the licensed Lucentis. The former MP Alice Mahon is challenging her PCT's refusal to pay for Lucentis in the high court.

The Royal National Institute for the Blind has refused to get involved in the debate over Avastin. A spokeswoman said the RNIB's position was not related to its funding by Novartis, which markets Lucentis in the UK. Novartis gave the RNIB £98,000 in the last financial year.

Genentech said it had invested nearly 10 years of research in developing Lucentis for wet macular degeneration.

"Developing Avastin for AMD would take years while Lucentis is available today," it said, adding that it does not hold the marketing rights outside the US and would not apply for a licence beyond US borders.

FAQ: Wet macular degeneration

What is wet macular degeneration?

Common in older people, it the leading cause of blindness in the UK. The macula, part of the retina used for the sharp central vision, deteriorates because of the growth of blood vessels where they are not supposed to be.

How does Avastin help?

Avastin is a bowel cancer drug which has similarities to Herceptin. Animal studies had shown an effect in macular degeneration, so US ophthalmologists injected tiny doses into the eye. More than 50,000 people have been treated and doctors report vision is improved with one or two injections.

Is Lucentis the same drug?

Lucentis is a fragment of Avastin with minor modifications which Genentech says make it more suitable for eyes. More injections are needed, which some doctors say is an increased risk. The biggest difference is the price - a tiny dose of Avastin costs £10-£30, but one injection of Lucentis costs more than £1,000.