I would say, "yes, but". If I understand correctly it is effectively minor magical healing that can be used multiple times on the same wound. That makes it close to major magical healing, but not quite. It sounds like the player got rather a good deal. I wonder why the gypsy was so happy to trade it away...
If you don't want to limit the number of uses (and sound out the player on that if you think its a good idea), I'd say limit it to being used on one person at a time, and say that it takes time to work. That still means that followers can be lost, and even player characters if they are left behind.
-- -- "The T'ang emperors were strong believers in the pills of immortality. More emperors died of poisoning from ingesting minerals in the T'ang than in any other dynasty" - Eva Wong _The Shambhala Guide to Taoism_ Paul K.
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