Published: October 31, 2007

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“Sometimes you can just have your lunch on the floor of the factory because it’s so clean and so perfect, sometimes much better than in Europe,” said Jean-François Quarre, a French drug company official who had a booth in Milan. But Mr. Quarre cautioned that he has seen the other side as well. “It’s frightening.”

At their worst, uncertified chemical companies contribute to China’s notoriety as the world’s biggest supplier of counterfeit drugs, which include unauthorized copies as well as substandard, even harmful, formulations. “Underregulated manufacturers are increasingly becoming the source of A.P.I.’s used in the production of counterfeit medicine,” R. John Theriault, until recently Pfizer’s head of global security, said in a statement to Congress.

Because United States drug regulators require pharmaceutical suppliers to meet high standards, the American supply chain is among the world’s safest. But as China’s chemical suppliers multiply, Congressional investigators are questioning the F.D.A.’s ability to protect consumers.

Even some Chinese chemical companies recognize their limitations in making pharmaceuticals.

“We don’t have the resources and means to produce medicine,” said Gu Jinfeng, a salesman for Changzhou Watson Fine Chemical. “The bar for producing chemicals is pretty low.”

Even so, Watson Chemical advertises that it makes active pharmaceutical ingredients. But Mr. Gu said he would export them only to countries with lower standards than China, or if “we can earn really good profits.”

A Trail of Steroids

Just days before the Milan trade show, United States officials made an announcement that brought home the global reach and attendant dangers of China’s expanding chemical industry. The officials disclosed that they had dismantled a 27-state underground network for steroids and human growth hormone, arresting 124 people in “Operation Raw Deal.”

The supply trail almost always led to China. Thirty-seven companies there supplied virtually all of the bulk chemicals, federal officials said.

Of the 37 suspect companies, all but one unnamed by the American authorities, The Times identified eight. Records show that six are uncertified chemical companies, including Hunan Steroid, which marketed its products at the Milan convention.

“Just want to see the old customers and develop the new market,” said Sun Xueqin, a deputy export manager for Hunan Steroid. Ms. Sun said the company sold raw pharmaceutical ingredients in Europe and America and more advanced pharmaceutical ingredients in India, among other places.

Later, another Hunan official, Huang Zili, said the company did not sell to the United States, and declined to comment on the government’s contention that Hunan was a supplier of bodybuilding drugs. Hunan has not been charged with any crime.

As serious as the accusations are in Operation Raw Deal, health experts say they believe that counterfeit drugs, particularly those sold on the Internet, pose a greater threat to a broader segment of the American public.

“The facts are irrefutable,” Mr. Theriault, the former Pfizer official, told Congress. “The importation of counterfeit, infringing, misbranded and unapproved pharmaceutical products in the United States is increasing exponentially.” Pfizer makes Viagra, one of the drugs most often counterfeited.

Finding uncertified companies feeding the market is not difficult. Orient Pacific International, the Milan registrant whose owner did not show up, advertised that it makes and exports pharmaceutical ingredients to “worldwide famous medical companies.” The owner, Mr. Xu, is accused of selling counterfeit medicine to treat ailments like cancer, mental illness and heart disease, according to United States Immigration and Customs Enforcement, or I.C.E.

Mr. Xu shipped drugs to an Internet pharmacy, investigators say. But he also penetrated the highly regulated supply chain of legitimate distributors in Europe, said David A. Faulconer, a customs official. Acting on tips from large drug companies, federal officials devised a plan to stop him from doing the same in the United States.

Posing as a buyer, an investigator for the immigration and customs agency met Mr. Xu in Bangkok on March 6. Mr. Xu gave him “detailed suggestions for transshipment and smuggling techniques to evade United States Customs detection,” federal records show.

After investigators bought multiple shipments of counterfeit drugs, Mr. Xu traveled to Houston “to consummate an agreement for widespread distribution of his counterfeit products in the United States,” according to an affidavit filed in federal court. Federal agents arrested Mr. Xu, who has pleaded not guilty.

Another company exhibiting in Milan, Honor International Pharmtech, was also the subject of a customs investigation. In January, agents seized 3,041 fake Viagra pills sent by the company to a DHL shipping hub in Wilmington, Ohio, according to customs.

The shipment, disguised as grape seed extract, was destined for an Internet pharmacy in Central America, said agents who requested anonymity because the investigation continues.