During an on-screen sting led by state-run China Central Television (CCTV), the companies were allegedly caught using gelatine by-product from leather waste instead of the standard food-grade gelatine required by law, leading to a large amount of chromium.
The investigators reported that regulation – particularly in the Zhejiang province, where most of the capsules originated – had been lax.
Now those implicated have been ordered to recall and destroy the tainted batches – which spans 33 different medicines – and all production has been blocked pending further inspection.
In a statement on Sunday, the SFDA (Shanghai Food and Drug Administration) said it has already pulled both Chuangshi Capsule and Linfeng Capsule’s licenses after finding they had committed "grave violations of laws and regulations”.
Other manufacturers caught up in the scandal include Tonghua Golden-Horse Pharmaceutical Industry and Zhuokang Capsule.
The authority is also working with the Ministry of Public Security to arrest 53 suspects who now face criminal charges.
In the statement, a spokesperson said: “The SFDA also promise to timely inform the public the development of the investigation.”
The spokesperson added that more investigational teams have now been dispatched in what will become a nation-wide crack-down on manufacturers of gelatine for medical use.
The news comes as the latest in a long line of woes for the SFDA.
Manufacturers are still suffering the fall out of the 2008 adulterated heparin crisis, in which more than 80 US citizens died when tainted doses of the substance were found in medicines.
As a result the US FDA is now pressuring firms with facilities in China to audit their suppliers in addition to local regulations to ensure they are up to cGMP (current good manufacturing practice) scratch.
And according to Reuters we could see more similar actions as Chinese regulators are struggling to issue control over local companies which are often found cutting corners because of “unique political and pricing pressures” in the rapidly expanding pharma market.