Nor does FDA awareness of a rogue operator necessarily help. The agency has been issuing warnings to Long March Pharmaceutical in Sichuan province since 1984, to no great effect. Similarly things happen in India, though less extensively and without the same level of involvement from brokers and traders.

CEFIC, of which the EFCG is part, has made ten points of action that it regards as essential to fixing Europe’s rogue API problem. These are:

1. Mandatory GMP certification for API producers by a European inspectorate

2. Global prioritisation of API inspections

3. A central European unit to co-ordinate all API inspections across the world

4. Including a focus on fraud and counterfeiting in GMP inspections

5. Resolving resource problems for inspections through user fees, proper prioritisation and international co-operation

6. Using analytical technologies to detect fake APIs

7. An IT system that helps customs to prevent fake APIs from being imported

8. Tough sanctions and penalties for counterfeiting

9. A licensing system for traders and brokers

10. Clarifying the legal liability of qualified person

Villax felt there had been progress since the despondency that sparked the creation of the EFCG in 2004. 2005 saw legislation and in December 2006, a majority of MEPs signed a written declaration that both producers and importers of APIS should submit a GMP certificate delivered by the European authorities following a mandatory inspection at the site of production. Since then, however, there had been no "tangible new legislation", Villax said.

Shockingly, making fake medicines is now more profitable than making heroin, yet in most countries it is not even a crime. In France, Germany and the US, the law treats the supply of counterfeit medicine with intent to profit from the patient’s trust and impacting his health as a serious crime but only the Philippines specifically addresses medicines made with fake APIs. In Canada, most of the EU and most of the rest of the world, by contrast, it is addressed only in the context of trademark and patent infringement – "as if it were the same thing as making a fake Christian Dior T-shirt," Villax remarked.

(As if to illustrate his point, a man received a suspended prison sentence in the UK in November for the illicit sale and supply of controlled and counterfeit drugs. In addition to 86,000 valium tablets, some 11,500 other products, believed to have been couriered in from Pakistan, were found at his home; they included Viagra, Levitra and Cialis.)

That said, Villax added, there had been a lot of progress in the last four months and there is growing evidence that the politicians are listening. The day before CPhI opened, former French president Jacques Chirac had highlighted fake medicines as a major problem in Africa and called for an international convention ratified by the UN. The EFCG had shied away from doing this, preferring to build its credibility slowly.

Three major new pieces of legislation are now being proposed: a directive of the European Parliament and Council to amend Directive 2001/83/EC, a draft convention of the Council of Europe and US Drug Safety Bill S.882. Collectively, these will impact over 1 billion people and their definitions of falsified medicines are basically similar.

If these bills become law, labelling an API as coming from a different source than the true one or tampering with a Certificate of Analysis (CoA) or changing the date of manufacture will all become counterfeiting crimes. Deliberately using an API from a source not authorised in the DMF will cause a medicine to be counterfeit.

"We are starting to get the right law in place, one that will put out of business those who have non-compliance as their strategy," Villax said.

However, the EU is still taking the ‘country API equivalence option’, under which manufacturers are to be inspected by their domestic authorities. The EU will draw up a list of equivalent countries that inspect to an equivalent standard to the EU, while shipments from non-equivalent countries will need a statement that standards and oversights for the materials involved were equivalent to EU standards.

Country equivalence, Villax said, will be fine in the developed world, but might not be so effective elsewhere. "Will it be another paper tiger? Will it be fraud-proof and corruption-proof? Will it be a sufficient deterrent to those for whom non-compliance is not just about cutting corners but a business strategy? Might it be challenged as a trade barrier?"

There is certainly an increased sense of urgency among the authorities, in Villax’s view. The last 28 EDQM inspections, all in Asia, had led to 16 CEP suspensions. Last year, a pilot programme of joint international API inspections began between the EU, the US and Australia and senior officials were appointed to manage the collaboration between medicine agencies.

This has all led to some high-profile seizures and recalls of products and suspensions of CEPs, with Shanghai Number One, Lupin and Ranbaxy Laboratories among those affected. However, the sanctions are not yet truly biting and there is certainly no cause for complacency.

"The melamine disaster affected 300,000 children and shows how a global catastrophe might develop with APIs," said Villax. Recent research on API manufacturing in China (http://efcg.cefic.org/isofiles/publications/items/download_189.pdf) shows that 20-30% of off-patent medicines in EU pharmacies have false APIs from China.

The current draft of the new US Drug Safety Bill, meanwhile, specifies a mandatory FDA API inspection every two to four years for every plant, depending on the company’s track record. A website will be set up to identify the country of origin of each drug, API and device. Civil penalties will apply for false or misleading information.

More concretely, the FDA is already doubling the number of its inspections overseas – albeit from a very low level. In August, it also issued a guidance document for industry on pharmaceutical components at risk of melamine contamination (www.fda.gov/animalveterinary/scienceresearch/toolsresources/ucm135002.htm), which is necessary but will also create a lot of extra work in testing.

What is industry doing? Villax said that Hovione has noticed a few positive trends. More generic pharmaceuticals companies are auditing - and sharing audits - more often. The much-discussed ‘flight to quality’ is real, though this creates problems of its own. And companies are making their supply chains more transparent by cutting out brokers.

More significant, perhaps, is the RX-360 consortium (www.rx-360.org), in which pharmaceuticals and biotechnology companies and their suppliers have come together to enhance the security of their supply chains and assure the quality of the products moving through them. This has started off with the sharing of audit reports, something that will improve quality and reduce costs.

"Even though the innovators kicked the process off, it will be infinitely more valuable to generic pharma companies because they typically work with far more APIs but have a far lower inspection capacity," said Villax. "It is also an interesting example of companies of different sizes in different locations working together to get clarity on who are reliable people to work with."

A European RX-360 was subsequently launched at GSK’s UK head office near London on 10 November with 135 delegates attending. "European generics firms will have a huge amount to gain in terms of low-cost access to a huge number of audits," Villax said.

Dr Arnulf Heubner of Merck KGaA, another EFCG board member and chair of its Pharmaceutical Business Committee, discussed the certification of excipient producers. The association has been pushing for this since 2007, leading to an agreement with IPEC Europe in 2008 and subsequent collaboration with other excipients trade bodies across the world.

The EFCG argues that excipients need to be subject to the same level of regulation as APIs, because they represent the major part of the final drug, they influence the galenics – and thus the pharmacokinetics – as well as the efficiency of the API, and they vary hugely in nature.

Heubner, described a physical audit as "the ideal way" to achieve supplier qualification, but added this could be an absurdly long job, putting suppliers "at risk of ‘death by audit’". With thousands of different excipients and thousands of suppliers, the regulatory inspectorates do not in any case have the necessary resources.

The EFCG has therefore suggested an internationally recognised third party qualification system covering quality management systems in manufacture and the supply chain, thus enabling users to focus qualification resources on technical aspects and higher-risk excipients and reducing the audit burden on all parties.

"The FDA and the EU are positively disposed to this idea, but only if the auditors are competent to do the job," Heubner said. Both have indicated that third party audits and certification from accredited organisations would be acceptable.

The certification project that the EFCG and its partners have developed is therefore based on existing best practices, notably those of the IPEC-PDQ GMP Guide of 2006, the IPEC GDP Guide of 2006 and the SQAS Distributor ESAD Scheme. It is also aligned to ISO 9001, to which many excipient suppliers are already certified.

Certification will be against the requirements in these guides, converted to ‘ISO-speak’. Thus, for instance, excipient manufacturers with ISO 9001 will require only extra audit time to cover GMP, while those without it will require a further audit of their quality management system.

The project is necessarily international in scope, said Heubner, and will include as many excipients as possible. These will be classified and standards will be set that are achievable, auditable and in relation to the risk posed. The project will also be accessible to existing third party audit bodies. Stakeholder sessions were held in Europe in May and with the FDA in July.

Because excipients vary so much in their uses, functions, manufacturing processes and origins and their risk profiles consequently vary too, there can be no one-size-fits-all definition of GMP here. However, two critical risk factors have been identified and verified as the most relevant: the route of administration of the drug and the impact of the excipient manufacturing process on functionality.

The certification could work in practice by a joint three-step process. First, the manufacturer could classify the excipient and assign GMP to suppliers and users, possibly on a CoA. Then, the user would classify it and request GMP from the manufacturer, perhaps at the contract review or quality agreement stage. Finally the two would perform a joint risk assessment.

"This may not always be practical, but an agreement on the GMP class must be part of the contract review between the two parties as an absolute minimum," said Heubner. "At present, one excipient is sugar, exactly the same as the consumer product, yet it has not been tested for suitability – to me, that is frightening."

How will it work? Once there is an agreement in place with third party audit orgnaistions, training and assessment of competency can occur, a list of accredited organsiations will be published and audits can begin. Auditors will report the result to IPEC, which can publish it and take any necessary action.

"It will be a virtuous circle," commented Heubner. Hopefully, he added, the certification scheme should be ready to begin in 2010. The system should be ready by 2010, after which negotiations on details could begin with the EU authorities.

Heubner admitted that there had been a major shock earlier in 2009, when an independent report for the EC concluded that the cost of regulating excipients far exceeded any quanitifable risks from them. The EFCG had then spoken to the EC and amendments were made to the regulation of the list of ‘certain excipients’ but the EC did agree on the fundamental need for regulation.

Finally, Lukas von Hippel, vice-president of marketing and sales at AllessaChemie, gave an update on the voluntary guidelines drawn up by the EFCG’s Agrochemical Intermediates Manufacturers in Europe (AIME) sub-group. These were originally developed as a proposed set of minimum requirements for non-GMP manufacturers of agrochemical intermediates but their scope has been extended to the whole fine chemicals industry.

During Chemspec Europe 2009, AIME had announced the launch of the ‘Business Integrity EvaluatioN toolkit or BIEN, which it had developed with the auditing company BSI. The aim of this was to standardise supplier evaluation in a low-cost and rapid way.

The first draft was widely tested by AIME members in 2008 and 2009. Based on their feedback, an updated version has been prepared. This is suitable for testing by anyone in the industry and is available via the EFCG website (www.ecfg.cefic.org); it was also recently a finalist in the ICIS Innovation Awards.

The FDA is interested in the guidelines and the BIEN, added von Hippel, because it believes that ingredient manufacturers might use the BIEN to evaluate their raw material suppliers. The EFCG is now reaching out to other pharma trade associations and consortia to share best practices.

The next steps will be to widen awareness of the BIEN and build a global network of users. "I actually met a Big Pharma buyer on the way to Madrid who said he saw the voluntary guidelines as great because so many issues in the pharma market are the same. I believe the world would be a better place if we all followed these guidelines," he said.