The government-made cough syrup contained diethylene glycol, an industrial solvent commonly used for brake fluids or as an engine coolant.
Health officials first reported people died from a mystery illness earlier this month. US scientists from the Food and Drug Administration said the victims were poisoned by diethylene glycol.
On Wednesday, Panama's health ministry said the death toll had risen to 26, four more than previously reported.
The government initially ruled out human error and said the medicine was probably tampered with maliciously, but has not given any more details.

Copyright Reuters, 2006