Police have arrested six suspects for producing and selling 20 kinds of fake medicine worth 1 million yuan ($147,000) during three years of illegal operation in Wuhan, capital city of Hubei province.
The medicines, sold through two online drug stores, were claimed to be able to treat diseases such as rheumatism and asthma.
Some 3,000 people have purchased or used the medicines, police said.
Although no casualties have been reported yet, some of the medicines' ingredients could make patients highly dependent on them and would cause harm to people after long-term use, the local drug watchdog warned on Monday.
Local police were tipped off about the fake pharmaceutical operation by local residents last June, State broadcaster China Central Television (CCTV) quoted Ding Chunyang, an officer with Wuhan public security bureau, as saying on Monday.
"It was quite difficult to investigate the case because the only clues we had were two bottles of medicines, a telephone number and a website," Ding said.
The police ordered one of the medicines from the website and found that the name of the medicine was the same as that of a medicine produced by an American pharmaceutical manufacturer, Ding said.
"The American medicine is an injection and it has not appeared on the Chinese mainland market yet. But what we bought were capsules, and their production permission was proved to be counterfeit. So we could tell that those medicines were fake," Ding said.
After several months' investigation, the police finally traced the fake pharmaceutical operation to a residential building in Wuhan and the suspects were detained.
All the suspects received little education and knew little about medicines, Ding said.
"There were words of some components which I could not recognize, but I would check them in the dictionary," CCTV quoted suspect Yan Jiangping, who only finished primary school education, as saying.
"After examining the fake medicines, we found that the main component was prednisone," Luo Zhi, an official with Wuhan food and drug administration, told China Daily on Monday.
"Prednisone, to some extent, is effective in treating diseases such as arthritis and some other inflammations, but there is a very strict dosage for its use."
"The suspects also added some cheap traditional Chinese medical materials into the medicines to make them look and smell authentic," Luo said.
"I knew that those materials had no efficacy, they were just addictives. Only by mixing them with prednisone, could we make the capsules," the suspect Yan Jiangping was quoted by CCTV as saying.