The State Council, China's Cabinet, recently issued a guideline document on deepening medical reforms, which clearly requires all public-sponsored hospitals to stop making profits from selling medicines.

In the past, public-sponsored hospitals were allowed to sell medicines at prices 15 percent higher than the purchase price. That was alleged by many to have encouraged doctors and hospitals to prescribe more medicines to their patients than necessary.

The current reform is aimed at breaking the dependency of public hospitals on medicine sales.

At the same time the document urges the prescription fees be raised, so that doctors can get proper payment for their labor and hospitals derive their profits mainly from the services they provide.

Beijing has already pioneered the policy in five local hospitals since July 2012. In October, the Beijing medical authorities said the policy had helped lower the financial burden on patients in the five hospitals by 20 to 30 percent.

The guidance document also requires hospitals to make their purchasing of medicines transparent.