Beijing Hospital Management Bureau has begun a trial reform of two of the 22 public hospitals under its supervision, according Mao Yu, deputy head of the bureau.

At a conference held over the weekend - the bureau's first since it was established by Beijing Municipal Health Bureau last July to carry out hospital reforms – the bureau said two hospitals have begun a trial to reduce the profits they earn from drug sales.

The two hospitals are Beijing Chaoyang Hospital and Beijing Friendship Hospital, sources said.

In China, most medications can be purchased in hospital pharmacies, where the retail price can be 15 percent higher than the wholesale price. As a result, many public hospitals rely heavily on revenues from selling medications and have been criticized for over-prescribing expensive drugs.

In 2010, the State Council approved of a plan to reform public hospitals by separating sales of medications from medical treatment.

Tian Wei, president of Beijing Jishuitan Hospital, said: "The pricing system at public hospitals is old. The system doesn't really allow hospitals to charge enough for medical services, so they have to rely on drug sales for their revenues. I greatly appreciate the government's efforts to let doctors earn what they deserve."

One of the main reforms will be for hospitals to establish their own performance evaluation systems.

Among the 26 basic indices the bureau has designed for the performance evaluation system, two are "the amount of money on average a patient pays" and "medical treatment cost".

"One goal of the performance evaluation is to guarantee the 'public' nature of public hospitals," said Mao.