CRI's Huang Shan reports.

　　From June 1, China will relax price controls over the majority of medicines, except narcotics and some listed psychotropic drugs.

　　The head of National Development and Reform Commission's Medicine Price Department, Song Dacai, introduces the importance of this reform.

　　中国取消药品最高限价

　　"The reform will build a new formation mechanism for medicine prices. Through these means, prices can better reflect the situation of supply and demand in the market. With a more flexible price mechanism, patients' increasing needs for certain medicines can be satisfied; meanwhile, pharmaceutical companies will put more efforts towards development and innovation, as well as ensure the quality of medicines."

　　With the reform, authorities are hoping that the price of major medicines can be decided by the market, and that medical insurance system can have a larger say.

　　Song Dacai stresses that the government will still supervise medicine prices, and serve as a defender of reasonable prices and orderly medicine market.

　　Insiders believe the move can further boost industry innovation and help medicine makers become more profitable.

　　Li Chuyuan from the Guangzhou Pharmaceutical Company is one of them.

　　"In the past, though the price of raw materials has increased over five times, we still cannot raise products' price levels. This has hindered our company's development. I think as the reform is being implemented, pharmaceutical companies like us will have more motivation, because the price can be adjusted according to market situations. At the same time, we can better meet patients' needs for low-cost medicines."

　　For consumers, the first thing concerning them is whether medicine prices will rise after the reform.

　　The vice-president of Teda International cardiovascular hospital, Liu Yaping, says that prices may not necessarily go up.

　　"I think after the reform, medicines price will not rise. Moreover, lower medicine price will give more room for hospital's development."

　　China has promised to further relax price controls.

　　The country has already relaxed its grip on low cost medicines, telecom services, tobacco, ports and railways, air transport, natural gas and electricity.

　　For CRI, I'm Huang Shan.