Suggestive Toy with chemical inside....

I found that the pacifier on one of my daughters toys resembles a penis. Furthermore upon further inspection I found the pacifier to be pulling some kind of white powder out from inside the head. I rinsed this powder and it turned blue and then turned to a slimy gel. As it dried it turned into more of a rubbery latex. I have no idea what this substance is but as it is on the pacifier and I would say this is potentially very harmful as kids will copy what their toys do. My daughter could have easily ended up with this substance in her mouth.