BEIJING - Medicine prices at public clinics have been notably reduced thanks to a policy that promotes basic medicine, an office of the State Council said Thursday.

Current price levels of basic medicine used by government-funded township hospitals and community clinics have been reduced an average of 25 percent from the levels two years ago when the policy started, according to a statement from the State Council office in charge of reforming the country's healthcare program.

China has introduced a state list of basic medicine used by government-funded township hospitals and community clinics, which includes roughly 300 types of commonly-used Western and traditional Chinese medicine.

Provincial governments will purchase basic medicine through public bidding and distribute them to local clinics.

These clinics must not raise the prices of listed medicine and in return, the government will provide them with subsidies.

The policy has been implemented at all township and community clinics in all the 31 provinces, municipalities and autonomous regions in the Chinese mainland, the statement said.