This grotesque practice is more common than you might think.
There aren't many taboos that you could truly consider global, but cannibalism is one of them. Thus it is perhaps not surprising that the act of violating the taboo is often considered to be an extremely powerful one. Any decent magic (or psychology) textbook will tell you, the bigger the taboo, the more power it holds.
These days, medicinal cannibalism is practiced most often in Asian countries, where it is an extremely rare practice of traditional medicine in South Korea and China. It has created a smuggling epidemic so widespread that the Chinese government was forced to launch an official investigation.
According to the Chinese government, aborted Chinese fetuses are not - repeat, not - being sold on the black market, dried, pulverized, put in gelatin capsules, and smuggled to South Korea for sale. However, there is the small matter of the smugglers that keep getting caught with loads of the stuff. According to customs agents, about 35 of these smuggling attempts were intercepted in 2011 with a total of 17,000 capsules. And that's just the ones who got caught.
In Europe from the 11th century well into the 19th century, physicians were convinced that the powdered flesh of a mummy could cure blood-related problems, including coughs, menstrual issues, and blood clots. This created a bustling trade in robbing the tombs of Egypt's ancient rulers, a ransacking of history on an appalling scale not seen before or since.
Once the Egyptian mummies ran out, doctors turned to "mellified man," which is what you get when you soak a corpse in an herbal honey mixture. The corpses of strong men were preferred, as it was assumed that the man's strength would be transferred (via his preserved flesh) to the patient.
This homeopathic belief that "like cures like" also led to the use of the blood of slain gladiators as a reviving drink in Roman times. Call it the original Red Bull: the blood of the dead gladiator was thought to pass on the fighter's vitality and pizzazz (although it must be noted that the gladiator in question clearly didn't have enough vitality to avoid being killed in combat).
Along the same lines, people suffering from headaches, migraines, or epilepsy were often advised to drink a beverage made with the powder from a ground-up skull. This remedy was recorded several times, most recently as a prescription issued to an Englishman in 1847 whose daughter suffered from epilepsy.