Yul Kwon:
There’s another food safety scare in China. This time it involves something we often consume- medicine. It appears that manufacturers have been making capsules using an industrial form of gelatin, which contains chromium. Chromium happens to be a poison that can cause cancer. But it’s cheaper to use than the safe, edible kind. Here’s CCTV with the story.

Reporter:
Ru'ao is a township in Zhejiang Province that produces one-third of the capsules used in China's pharmaceutical market. The wholesale price of capsules varies from 40 yuan per bag to over 100 yuan. A local capsule maker says the varieties in the raw material, gelatin, is the reason behind the price difference. But he refused to elaborate.

Zhu Mingguang, Production Manager, Huaxing Capsule Company, Zhejiang Province:
It's a business secret we've got to keep.

Reporter:
But the cat is out of the bag in a gelatin factory in Hubei province. In Xueyang Gelatin Factory, the manager shows how they use waste leather, combined with strong chemicals, to make gelatin. Some are packed in bags with industrial usage labels, while others are bagged with no label. The unidentified gelatin goes into production lines in capsule factories in Zhejiang Province. At Zhuokang Capsule Company, industrial gelatin is liquidized and added with colors and strong chemicals.

Wang Haoming, Sales Manager, Zhuokang Capsule Company, Zhejiang Province:
The gelatin is dirty, so we heat it up and put in a chemical to make it clean. It can help get rid of the grease in the gelatin.

Reporter:
This scale is copied by many other capsule companies. In Zhejiang, the tainted capsules are sold much cheaper on the market, and are well accepted by pharmaceutical companies, including some well-known ones.

Zhu Mingguang:
I've got dozens of boxes to sell to overseas pharmaceutical companies. These are big companies, and they do the business.

Reporter:
In Hubei, Zhejiang, and Jiangxi Province, production at suspected capsule companies has been suspended, and some company owners have been detained by the police. Experts from the ministry of health say so far no cases of adverse reactions from taking tainted drugs have been reported.

Yul Kwon:
The counterfeit caps have been found mostly in the production of traditional Chinese medicines. And so far, there’s no sign they’ve been exported outside of China.