The authorities have detained 160 members of a criminal gang in Shanghai after the group lured patients to fake medical clinics and sold them overpriced drugs, the city's police said on Tuesday.

The gang cheated more than 500 victims out of 1.7 million yuan ($273,000), using corrupt doctors to inflate drug prices and prescribe large amounts of medicine, the city's police department said on its official micro blog.

More than 600 Shanghai police officials launched a sting operation on April 2 after a seven-month investigation, holding 160 suspects in raids on the homes of gang members around the city and seizing crates of medicine and fake firearms, the police said.

The gang would lure patients into one of four fraudulent clinics, using people placed at hospitals and metro stations to praise the quality of care. Unqualified doctors would then sell them drugs at prices often more than 10 times the real value.

The healthcare scam, which often targeted migrants who had come to Shanghai for treatment, is the largest of its kind to hit the city, Chinese media said.

They added that 114 of those detained had been arrested.