Initial reports, mainly driven by the FDA, reported that the distribution of the tainted consignments was limited to discount stores on a relatively small scale, but latest reports show that 900,000 tubes of tainted toothpaste from China were distributed in public institutions, mainly in Georgia, Florida, South Carolina and North Carolina.
Institution officials serving public hospitals and prisons in Georgia and North Carolina said they were replacing the toothpaste with products made outside of China.
According to a report in the New York Times, drug distributor McKesson Corp said it was recalling its China-made EverFresh brand after it was identified as containing trace amounts of the chemical.
Officials from the FDA say that even a trace amount of diethylene glycol could present potential health problems for young children and individuals with kidney conditions.
The alert over the China toothpaste was first sounded by the Panama government, which was keeping a close eye on all consumer goods products following a mass poisoning after 260,000 bottles of cough medicine were inadvertently formulated with the chemical.
The error led to the deaths of 100 people and the implementation of safeguards that eventually led to the discovery of the tainted toothpastes from China.
Since then imports of tainted China toothpaste have cropped up all over the world, including Australia and other countries in Central America.
Back in May the FDA first said it was blocking all consignments of toothpaste from China at US borders, adding that it would not be releasing any such consignments until tests showed that it was categorically safe.
The two biggest toothpaste manufacturers in North America - Procter & Gamble and Colgate-Palmolive, have both stressed that they are not be affected by the block, as none of their toothpastes are currently imported from China.
Initially the FDA said it thought its block would mainly affect gray market imports from China, which are often sold in the North American market illegally or at discount stores.
The China government said that its agencies have been making investigations relating to the toothpaste exports and according to a BBC report these investigations were focusing on the eastern province Jiangsu and Beijing.
The scare highlights the ongoing problem with the regulation of exported consumer goods from China, which has led to a number of major incidences over the past few years.
In March this year, pet food ingredients from China contained a chemical that killed pet cats and dogs in the US.
There is also a continuing problem of cosmetic counterfeiting, a major challenge in the North American market, which means that fake imports continue to pour in from many Asian markets, namely China.