BEIJING, May 22 -- No serious revenue drops have been seen after China banned hospitals from charging a markup on drugs as part of a health corruption reform, an official said Friday.

Hospitals' profits from medicine sales have been affected but the loss is compensated by higher charges for medical service and funding from local government, said Sun Zhigang, deputy director of the National Health and Family Planning Commission, at a press conference.

The 15 percent markup on drugs sales has long been blamed for unreasonably high medical costs in China as the policy could encourage hospitals to prescribe more medicine than is necessary in order to generate revenue.

To address this, the central authority initiated a pilot which targeted price markups at public hospitals in 2012.

The pilot medical reforms will be expanded to all county-level public hospitals across the country this year, Sun said.

The official also noted the drug purchase from foreign pharmaceutical manufacturers will not be affected by the ongoing medical reform.

"Foreign drug producers have equal opportunity as domestic manufacturers when they bid for medicine supply," Sun said.