The Cancer Drugs Fund has not been managed effectively and the government is still unable to assess the benefit to cancer patients, the Public Accounts Committee has found.
The Committee finds that while about 80,000 people have received drugs through the Fund, "the Department of Health and NHS England do not have the data needed to assess the impact of the Fund on patient outcomes."
Government insitutions were unable to judge whether the drugs available had extended as patients' lives, or to demonstrated whether the intiative was a good use of taxpayers' money, the report concluded.
The Committee also questioned whether the Department and NHS England are using their buying power effectively to pay a fair price for cancer drugs.
The Public Accounts Committee has also for clarity over the extent to which regional variations have been reduced "so that people across the country have equal access to the Fund".
The government established the Fund in 2010 to improve access to cancer drugs that otherwise would not be routinely available on the NHS.
The Committee concluded: "NHS England overspent the Fund's £480 million budget for the two years 2013-14 and 2014-15 by £167 million. The cost of the Fund grew from £175 million in 2012-13 to £416 million in 2014-15, an increase of 138% in two years, but NHS England did not start to take action to control the cost until November 2014.
"There is agreement that the Fund is not sustainable in its current form and NHS England and the National Institute for Health and Care Excellence (NICE) are currently consulting on proposals to reform the Fund from April 2016.
"We expect NHS England, in making changes, to take account of our recommendations and apply the clear lessons from the last five years to ensure that the new Fund is managed better in the future."
The Committee has urged NHS England to "be prepared to take tough decisions to ensure that the Fund does not overspend" and the Department to "set out how it ensures that it pays a fair price for drugs and that the limit in the Pharmaceutical Price Regulation Scheme provides value for money for the taxpayer".
The Committee has also called for NHS England to report back to the Committee by June 2016 "on what the available data indicate about the impact of the Fund on patient outcomes".
Meg Hillier MP, Chair of the PAC, said:"Cancer is a devastating disease. More than one in three people in England are expected to develop it in their lifetime and its impacts will affect the lives of many more.
"Against this backdrop the Cancer Drugs Fund has enabled thousands of people to receive drugs not normally available to them through the NHS. While this is welcome it's also clear the Fund requires significant and urgent reform if it is to be sustainable.
"A vital step in addressing the financial challenges must be to properly evaluate the health benefits of drugs provided through the Fund."
She continued: "If cancer patients seeking its support are to get the best possible treatment then there must be confidence that public money is being spent on the right medication, and at a fair price.
"We will be closely monitoring the progress made by the Department and NHS England in the months ahead."