At first glance, the announcement that the NHS "ban" on the anti-flu drug Relenza is to be lifted looks like a dazzling result for the pharmaceutical industry and an embarrassing u-turn for the health service technologies regulator, the national institute for clinical excellence (Nice).

But Nice's latest guidance, which replaces last autumn's interim guidance advising GPs not to prescribe Relenza on the grounds that there was no clear evidence that it would help the NHS treat flu patients, shows that the institute's original decision was basically sound.

Nice now accepts that clinical trials have shown that there are some benefits for patients at risk of serious complications from flu. But it does not accept that Relenza can be anything more than a niche anti-flu drug, at least as far as the NHS is concerned.

When the Relenza debate blew up last year, there was speculation that the costs to the NHS of providing it could be at least £10m a year and at most £100m a year - a handsome earner for Glaxo, not just in the UK but also overseas, where the Nice decision is closely monitored.

But the institute's latest figures show that, if correctly prescribed by GPs in line with Nice guidance, the amount paid out by the NHS on the drug could be as little as £2.3m, or, at the most, £11.7m - a miniscule amount in terms of the total NHS budget and Glaxo's profits.

Although the ban is lifted, very few people will actually get the drug, at least from NHS GPs. If there is no mass flu outbreak this winter, as few as 97,000 "at risk" patients - essentially those who are over 65 and suffer from asthma, heart disease, or diabetes - will be able to take Relenza.

Rather daringly, the NHS has decided to take an unusually commonsensical approach to any flu outbreak. It believes that its old technology immunisation programme, together with the even older school remedy of staying at home and wrapping up warm can beat flu this winter.

Nice's decision is a small but fair concession to Glaxo, and may calm the drug giant's legendary temper. Last autumn, enraged at the ban, it threatened to shift its £1bn research and development programme from the UK to the United States.

More importantly, the Relenza affair shows that NHS purchasing decisions can be driven by objective scientific, clinical and value for money criteria, rather than by the commercial muscle and political lobbying power of pharmaceutical companies. That is good news for patients.