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Medical school has to have a higher standard and any amount of cheating will get you expelled from most medical schools.

Having a "high standard" is very different from having a cut-throat advancement policy. And, as with any school policy, the investigation and prosecution of cheating varies heavily based on your social relations in the school. And when reports of cheating reach such high figures

A survey of 2,459 medical students found that 39% had witnessed cheating in their first 2 years of medical school, and 66.5% had heard about cheating. About 5% reported having cheated during that time.

then the problem is no longer with the individual but the educational system.

The exams will weed out the cheaters eventually

Nevermind the fact that his hasn't born itself out. Medical Malpractice rates do not appear to shift based on the number of board exams issued over time. Hell, board exams are as rife with cheating as any other academic institution.

In the weed-out class example you gave, if there were 3 cheaters in the top half, that means students 51, 52, and 53 are wrongly denied the chance to progress.

If cheating produces a higher class rank, every student has an incentive to cheat. It isn't an issue of being seat 51 versus 50, it's an issue of competing with other cheating students, who could be anywhere in the basket of 100. This produces high rates of cheating that we see reported above.