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Cytosponge, a test for oesophageal cancer costing £25 compared to the £600 of a traditional endoscopy, came second in the DoH's Innovation Challenge.
The awards recognise ideas developed by frontline staff to deliver solutions to the problems facing their patients.
The method was developed in Cambridge at Addenbrookes University Hospital.
Dr Rebecca Fitzgerald and her team at the Cambridge Medical Research Council Cancer Unit were awarded £50,000 for their innovation.
The method consists of a sponge enclosed in a pill on a fine medical cord that patients swallow.