Lower medicine prices are the top priority of China's health authorities this year, the Health Ministry announced Monday.

A national essential medicine system would cover most government-sponsored grass-roots health institutions where drugs would be sold with zero mark-up by the end of the year, said ministry spokesman Deng Haihua at a regular press conference.

China began implementing the essential medicine system in 2009 in a bid to reduce costs for patients.

Due to longstanding low government funding for state-run hospitals, which in many places only covers 10 percent of operating costs, doctors have often aggressively prescribed expensive, and sometimes unnecessary, medicines and treatment in order to generate income for the hospitals.

The implementation of the essential medicines system has reduced the prices of certain prescription drugs.

Deng said the ministry would focus on streamlining the centralized procurement and distribution of essential medicines and making sure they were sold at no more than cost price.

Centralized procurement of drugs at government-run institutions was introduced to bring down drug prices from the supply end and to lower prices of medicines for patients.