In May 2015, the Chinese Government removes pharmaceutical price regulation which continues for several years and implements market pricing mechanism. Researchers discuss the reform widely without marking any empirical analysis about the policy effect of the reform. This paper constructs difference-in-difference model by using pharmaceutical related price indexes between January 2011 and February 2017 and studies the policy effect of pharmaceutical price reform. The result shows that the reform does raise domestic pharmaceutical price and the volatility of the price as well. In the short-term, the reform could not reduce pharmaceutical price and release medical burden. However, from the aspect of economy, market pricing brings market competition which could form a reasonable pharmaceutical price in the long-run and have positive impacts on the development of medical market