If you can provide the actual brand of the medicine it would help.
In general, tetracycline comes in a few forms for the aquarium. In a raw yellow powder which is virtually useless as it does not dissolve well in water and is not taken up internally by freshwater fish.
In a tablet that dissolves and dispereses a form that can be dissolved and in mixture where it along with other medications are predissolved in an alcohol solvent.
Many products also treat a variety of symptoms and theyw ould have added dyes.
As for the cause of the red, no product I have ever used or tested should do this. I would change 75% of the water and add back in fresh water. Try one capsule in a glass of your source water and see if it reacts again. A LARGE amount of iron oxide in te water could do this and react with the tetracycline and cause a massive explosion of rust which would cause what you see. But that would be a lot of iron. If it does turn the glass red, I suggest you get a water filter to treat your source water.
As for medications to use instead of TC, you should try swabbing on with a cotton swab methylene blue directly. That is far more effective. Melafix is a good general tonic. It is a derivitive of tea tree oil and has some volatile aromatic compounds that are antimicrobial, but it is not a definitive treatment.
The Cotton Mouth disease (Mouthfungus). This disease is not as common as the White Spot desease, but is highly infectious and contagious.
The victim show a whitish fungus round the cheeks and lips. The lips may become swollen and rot away. Sometimes a rotten strip of lip attached only at one end will move in and out of the mouth as the fish breathes.
Infested fish lose their appetitie and their movement becomes sluggish. If no adequate treatment is given, the whole frontal part of the head may be eaten away finally and the fish dies.
Unless the affected fish is of considerate value, it should be killed before this fatal disease attack the other occupants of the tank.
If it is desired to keep the fish and if the infection has already been passed on to other occupants, the following treatment is advised:
Swabbing the mouth of the victims with a soft cloth dipped in strong salt solution, then keep the patient isolated in a bucket or jar containing a strong salt water solution.
* Try swabbing the lips with a 5 per cent silver mercury preparation.
* Make a solution of Terramycin or Aureomycuin by dissolving 50mg per gallon of water, a rapid cure is expected within 48 hours.
The most common remedy is the popular Methylene blue solution. Sick fish should be placed in a jar, bucket or a treatment tank into which has been added a methylene blue solution to colour the water deep blue.