U.S. drug maker Merck & Co's new hepatitis C drug Victrelis was recommended for use within Britain's state health service on Friday, despite its hefty price tag.

The National Institute for Health and Clinical Excellence, which often spurns expensive new medicines on cost grounds, said significant improvements seen with Victrelis made it a cost-effective option.

The drug, also known as boceprevir, is designed for use in combination with peginterferon alfa and ribavirin for patients with liver disease due to genotype 1 chronic hepatitis C, the most common form.

It costs 30,800 pounds ($48,400) for a 44-week course, with the other two drugs increasing the bill by around 11,000 pounds.

The draft guidance from NICE is now open for consultation before the agency finally issues it.

(Reporting by Ben Hirschler; Editing by Dan Lalor)