The High Court has heard that new drugs used to treat Alzheimer's disease are a "very long way off" being cost effective for "mild" sufferers.
Even though the antidementia drugs are licensed as clinically effective their benefit is "a limited one", said Nigel Giffin, a QC appearing for the National Institute for Health and Clinical Excellence (NICE).
But the Alzheimer's Society said NICE's approach "simply defies human experience", and it has failed to listen to thousands of sufferers and their families.
NICE is defending itself against accusations of "unlawfully, unfairly and irrationally" ceasing to recommend three specific drugs - Aricept (donepezil), Reminyl (galantamine) and Exelon (rivastimine) - for the treatment of the early stages of Alzheimer's disease.
It is the first High Court challenge of its kind to a NICE decision, and potentially affects tens of thousands of people and the way the watchdog operates in future.
Eisai, the Japanese company which makes Aricept, and Pfizer, which distributes it in Britain, are asking a judge to order NICE to reconsider its decision.
Eisai argues that NICE's assessment of the costs of the drugs to the NHS purse in relation to their benefits is procedurally flawed and cannot stand.
The Alzheimer's Society, which represents 630,000 people with the disease and their carers, is backing the challenge.