Health officials say a Tamiflu-resistant strain of swine flu has spread between hospital patients.
Five patients on a unit treating patients with severe underlying health conditions at the University Hospital of Wales, Cardiff are infected.
Three appear to have acquired the infection in hospital.
They are thought to be the first confirmed cases of person-to-person transmission of a Tamiflu-resistant strain in the world.
There have been several dozen reports around the world of people developing resistance to Tamiflu while taking the drug.
But there has only been one reported case of person-to-person transmission of a resistant strain - between two people at a US summer camp - and this has never been confirmed.
Two of the University Hospital Wales patients have recovered and have been discharged from hospital, one is in critical care and two are being treated on the ward.
The health officials stressed there was no risk to anyone else.
They said tests were being carried out to confirm exactly what happened.
The UK has bought enough doses of Tamiflu, which can shorten the duration of swine flu and reduce the risk of complications, for half the population.
Serious concern
Any spread of a Tamiflu resistant strain of the illness is a serious public health concern.
Dr Roland Salmon, director of the National Public Health Service for Wale's Communicable Disease Surveillance Centre, said: "The emergence of influenza A viruses that are resistant to Tamiflu is not unexpected in patients with serious underlying conditions and suppressed immune systems, who still test positive for the virus despite treatment.
"In this case, the resistant strain of swine flu does not appear to be any more severe than the swine flu virus that has been circulating since April."
Dr Tony Jewell, Chief Medical Officer for Wales, said: "We know that people with suppressed immune systems are more susceptible to the swine flu virus, which is why they are a priority group under the first phase of the vaccination programme in Wales which is progressing at pace.
"We have stringent processes in place for monitoring for antiviral resistance in the UK so that we can spot resistance early and the causes can be investigated and the cases managed.
"Identifying these cases shows that our systems are working so patients should be reassured.
"Treatment with Tamiflu is still appropriate for swine flu and people should continue to take Tamiflu when they are prescribed it.
"It's also important that good hygiene practices are followed to further prevent the spread of the virus."
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