All perfect praise be to Allah the Lord of The Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
Alcohol is of two types: intoxicating and non-intoxicating. Thus, it is permissible to use the non-intoxicating type in the pharmaceutical and food industries. However, if it is of the intoxicating type (Ethanol), then the following has to be taken into consideration:
If the medication is made of pure alcohol or it is the prevailing ingredient, then it is prohibited to use it in treatment since it is forbidden to use liquor or an intoxicant as medication for Allah hasn`t made it healing, even if some doctors thought the opposite.
Wa'il al-Hadrami reported that Tariq b. Suwaid a-Ju'fi asked Allah's Apostle (peace and blessings be upon him) about liquor. He forbade (its use) and he expressed hatred that it should be prepared. He (Tariq) said: "I prepare it as a medicine, whereupon he (the Holy Prophet) said: It is no medicine, but an ailment."
However, if the percentage of the intoxicating alcohol used in manufacturing the medication is small, then it is permissible to use it with conditions:
First: An alternative medication that is useful and free of alcohol isn`t available.
Second: A trustworthy doctor is of the view that the medication will most likely have a healing impact.
Third: The amount of alcohol is small and dissolved in the other compounds of the medication.
"It's disputed whether it's allowed or prohibited to use pure alcohol in treatment. But for antidote (and the like) that it's melted with and dissolved, then it's allowed to use it in treatment if there's no (alcohol-free) immaculate replacements that are usually used in treatment. It's like when treating with impure things, like snake meat, or urine. It's allowed to use it in treatment even it that was only to hurry up the healing. But under the condition of telling an upright Muslim doctor about that."Mughni Al Muhtaj By Al-Khateeb Al-Sharbini (May Allah be merciful to him), 518/5.
Nowadays, pharmaceutical companies use alcohol (ethanol) as solvent for the active ingredient in the medication and it melts with it. Thus, in this situation, there is no sin in using this ethanol if it is confirmed that there is no alcohol free alternative that is more effective or of equal effectiveness. Moreover, this same ruling applies to manufacturing this medication and marketing it. And Allah the Almighty knows best.