Health Secretary Alex Neil announced a series of fundamental changes to improve access to new medicines just hours after scrutiny body the Scottish Medicines Consortium (SMC) rejected a new therapy for patients with advanced breast cancer.
Charities hope patients with rare or terminal illnesses will be more likely to get the latest drugs once the new measures are in place early next year.
The changes include revising the criteria the SMC uses to decide if expensive drugs for treating rare conditions or extending life are value for money.
The Individual Patient Treatment Requests (IPTR) system patients currently use to apply for medicines blocked by SMC will also be scrapped and replaced with one led by medical consultants.
It has also been decided that the SMC must also become more transparent, opening its meetings to the public and enabling patients to share their views.
The overhaul follows years of concern that access to new medicines in Scotland was falling behind other countries including England, culminating in a hard-hitting inquiry by the health and sport committee of the Scottish Parliament last year.
Doctors from across the country gave evidence to MSPs, describing the situation as a tragedy which was not only affecting the sick but also risking Scotland's reputation as a centre of excellence for cancer care.
Cancer charities were among the first to welcome the new approach, although some questions remained about how patients' voices would be heard.
Mark Flannagan, chief executive of Beating Bowel Cancer, said: "We welcome the government's announcement that it is to take decisive action to improve access to new drugs and treatments for Scottish patients.
"In particular, that it has listened to our concerns that the current system is failing patients. The death of the IPTR should lift the barriers to doctors wanting to prescribe the latest cancer drugs they believe will benefit their patients."
Breakthrough Breast Cancer said it hoped treatments like Perjeta, a drug shown to extend the life of people with advanced disease which was blocked by SMC on Monday, would be approved under the new regime.
James Jopling, Scotland Director at Breakthrough Breast Cancer, said: "At present women with secondary breast cancer have limited treatment options for what is an incurable form of the disease."
Mr Neil said he thought the new system would save lives but denied the old regime was failing patients. He said: "We are world leaders in this area and these changes we are making will make further improvements and will make the system even more world renowned."