The announcement follows a month-long inspection programme by SFDA who found that of the 11,561 batches of drugs tested, 5.8% were found to contain excessive levels of chromium.
The agency ordered substandard drugs to be immediately taken off shelves, sealed, recalled and destroyed.
The reports showed that in April 2012, several Chinese pharmaceutical firms produced capsules from industrial gelatin derived from scraps of leather material, which is thought to contain a greater amount of chromium than edible gelatin.
Chromium can be toxic and carcinogenic if ingested in large amounts, according to SFDA.
Till date, local authorities have investigated 236 capsule makers and ordered 42 to halt production, closed down 84 production lines, revoked production licenses of seven companies and referred 13 firms to police.