A children's hospital in Hunan Province substituted industrial-grade for medical-grade oxygen to boost its profits, according to the local Drug Administration.

Bingzhou City Drug Administration said the hospital had bought more than 10,000 bottles of industrial oxygen in a year since January 2009, reaping illegal profits of 300,000 yuan.

The hospital even continued purchasing industrial oxygen while it was under investigation, buying 4919 bottles in February and March 2010.

Several patients suffered ill effects after using the sub-standard oxygen. On April 1, the hospital said it had stopped using industrial oxygen and would "take responsibility" for the problems of patients who had been affected. The head of the general office, Jiang Zhi, who was in charge of buying the oxygen, has been suspended.

Industrial oxygen is of lower quality than medical oxygen. Acid and alkaline lubricants may be introduced into the cylinder during compression and there may also be traces of carbon monoxide, carbon dioxide and ethyne. It causes coughing or choking in patients who use it and in some cases its use can be life-threatening.

An insider said that since both types of oxygen are colorless and odorless patients cannot tell the difference, adding that use of industrial oxygen is fairly common in Bingzhou and at least two other hospitals had been implicated.

The motivation behind the scandal appears to be the hospitals' drive to make money. Medical oxygen is three times more expensive than industrial oxygen.

Unclear standards and regulations may also be to blame. Many hospitals do not classify oxygen as a medicine, allowing supplies to bypass crucial quality control checks. Furthermore Good Manufacturing Practice authentication of medical oxygen is not compulsory.

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