Two private kindergartens in Xian, Shaanxi province, started secretly giving thousands of children prescription flu medicine more than five years ago, local police have said.
The claims sharply escalate a scandal which has seen five people who help run the facilities detained and hundreds of angry parents storm one of the schools in search of more information.
Police said on Thursday that the Fengyun and Hongji kindergartens had begun administering the medication to pupils in 2008 in a bid to keep them healthy, improve attendance rates and thereby maintain their revenue, Xinhua reported. Kindergarten fees are charged by the day.
An initial inquiry found the kindergartens had fraudulently used the name of a medical institution to buy 54,600 pills of the antiviral moroxydine hydrochloride from four pharmaceutical wholesalers 10 times between November 2008 and last October.
A Hong Kong paediatrician said the medication was not used any more. He noted impure pills were a problem on the mainland.
Last week a mother found an untaken pill on her six-year-old daughter. She is one of more than 500 parents who now say their children have suffered headaches, body pains and itching.
The kindergarten said it had occasionally given pills to children since 2012 after an outbreak of the H1N1 virus, but it failed to provide any evidence.
The drugs were given to the children twice a year before the regular flu season arrived, in spring and autumn, authorities said. Children aged three to five were given half or one tablet dissolved in water once a day for two consecutive days. Children aged five to six were given one pill for three consecutive days.
There are 1,455 children registered at the two kindergartens, which are affiliated with the China Soong Ching Ling Foundation.
Police said five people, including the heads of both kindergartens, were placed in criminal detention on suspicion of illegal medical practice and officers had seized school records.
Ellis Hon Kam-lun, a professor of paediatrics at Chinese University of Hong Kong, said the pupils would probably not suffer any long-term effects. "Moroxydine hydrochloride has some antiviral effects, but it hasn't been used in the last 20 to 30 years," Hon said. "The drug's half life is short, so side effects disappear within a short period - two to three days."
But drugs made on the mainland were often impure, which might explain some of the symptoms parents saw in their children, he said.