The deaths began last week after a man in Punjab province bought the treats to celebrate the birth of his son.
He and 11 other relatives are among the dead - in all 77 people were affected. Five remain in a serious condition.
Police have arrested two owners of a local sweetshop and one of their employees while the source of the contamination is investigated.
Officials suspect pesticide from a store next to the shop may accidentally have found its way into the laddoos - ball-shaped sweets popular at special occasions.
Laboratory tests are being carried out after police reportedly found sachets of pesticide inside the sweet shop.
The sweets were bought by Sajjad Hussain, a villager in Layyah district near Multan, after the birth of his son on 19 April, police spokesman Irfan Faiz told the BBC.
On 20 April, Mr Hussain bought 4.5kg of laddoos to celebrate. Five people died immediately, Mr Faiz said.
By the weekend many more lives had been claimed. Mr Hussain, one of his sisters, all of his seven brothers, two of his nieces and a nephew are among the dead.
Only five people now remain seriously ill in Nishtar hospital in Multan - most of the others who were being treated have recovered.
Police have charged the sweet shop owners under food control and poisonous substances laws.
"There was a pesticide shop close by which was being renovated, and the owner had left his pesticides at the bakery for safe keeping," senior police official Rameez Bukhari told AFP news agency.
Food safety standards are often lax in Pakistan but tainted products rarely end in more than cases of sickness, the BBC's M Ilyas Khan in Islamabad says.
There have, however, been a number of fatal incidents involving contaminated alcohol and cough medicine in recent years.
In neighbouring India, in 2013, more than 20 children died after consuming contaminated free school meals in Bihar state.
At least 23 people have died from eating contaminated sweets in central Pakistan, police say.