All local health departments are to report to their superiors if they detect people showing adverse reactions caused by use of the now-banned Xinfu drug, the ministry said in a notice on its website.
"Officials will be held accountable if slack supervision and control work leads to more adverse reaction cases," the notice warned.
It is now believed that at least six people have died after using the product, also know as clindamycin phosphate glucose, according to the state-run Xinhua news agency.
The State Food and Drug Administration banned the drug and started a nationwide recall early this month.
The drug, used to treat bacterial infections, is produced by Anhui Huayuan Worldbest Biology Pharmacy Co. in east China's Anhui province, according to state media.
Symptoms among patients sickened by the drug include kidney pains, stomach aches, nausea, vomiting and chest pains, Xinhua said previously.
Honest and speedy reporting from officials is one of the main challenges facing the Chinese bureaucracy.
Officials in China have traditionally been reluctant to break bad news to their superiors, for fear they would be punished.
Realizing that this mindset makes governing the huge country more difficult, the national leadership has signaled on several occasions its hopes for change, emphasizing that it is opposed to cover-ups.