Candy is a bitter, hard "medicine" that takes the shape of any normal kind of sweet. It is the temporary cure to the poison injected into the prisoner's body from their necklaces. As it is only temporary, Candy is very valuable (100,000 CP) and must be taken every three days, so it isn't uncommon for the stronger prisoners to steal from the weak. If not taken, the body will cease to function and a painful death comes soon after.
When the truth about Deadman Wonderland was discovered, all prisoners were sent to regular prisons, with the exception of some having new trials and having their necklaces removed.