The Synthetic Organic Chemical Manufacturers Association (SOCMA) and the European Fine Chemicals Group (EFCG) are demanding that regulators increase their inspections of such foreign facilities.
Despite having strict rules in place to ensure that drug APIs meet current good manufacturing practices (cGMP), the US Food & Drug Administration (FDA) and the European Agency for the Evaluation of Medicinal Products (EMEA) do not inspect all foreign facilities manufacturing APIs serving them, claim EFCG and SOCMA.
"As it stands today, all the credibility that these health authorities have been building up over the last 20 years is now being eroded," the organisations said.
"There is a very strong belief that if a medicine has been approved by the health authorities that it is "safe" - unfortunately this is not true."
EFCG and SOCMA claim that many foreign facilities have never been inspected even though 75-80 per cent of all API's used by EU and US drug manufacturers are imported, mainly from India and China.
According to a 1999 FDA report, 242 manufacturers imported in the US without being inspected.
In the European Union, the situation is equally alarming. There, the EU is unable to account for the number of manufacturing facilities importing into the EU, without consideration to the number of inspections performed.
"Clearly the regulators are not looking where they should be," said Guy Villax, chairman of EFCG's Pharmaceuticals Business Committee.
"This also means that there is no filter to separate the wheat from the chaf, because of course there are some very high quality foreign manufacturers."
In particular, Villax led a scathing attack on the EU regulatory authority.
"The EU has no foreign inspection service or budget and don't even know who is making the APIs that are coming into Europe," said Villax.
"In the instances where a non-compliant producer is identified importing into a European particular country, there is no common EU procedure for dealing with these offenders and no uniform customs control throughout the Union so they are generally left free to slip through the net and continue operating in other parts of Europe," he said.
"There is no deterrent to breaking the law."
Joe Acker, President of SOCMA painted a slightly different, although still dismal picture of the situation in the US, stating that the FDA does inspect the facilities of all the foreign API producers for prescription medicines, however, 90 per cent of the inspections carried out by the FDA are pre-approval inspections, while only 10 per cent are for cGMP compliance purposes.
"So if you're not listed on a new drug application (NDA), the chances are you won't get inspected," he said.
"This is shocking."
In addition, foreign plant inspections by the FDA are announced in advance, where as in the US the FDA can just turn up unannounced.
"This is not fair as any manufacturing facility can clean up its act if it has several weeks to prepare," said Acker.
He also expressed major concern over the fact that the FDA does nothing to inspect the API manufacturers for over the counter (OTC) medicines such as paracetamol.
"This is alarming when you consider the fact that over 50 per cent of the API for OTC medicines in the US comes from India and China," Acker said.
It seems a situation has now developed where anyone can enter the drug market to produce generics or OTC medicines and almost never go through an inspection process.
"This is an appalling state of affairs considering the amount of medicines and their precursors imported into the US," said Acker.
"The lack of inspections could mean a large number of unsafe medicines in circulation."
The two organisations maintain that this attack on the regulators is not a symptom of anti-globalisation attitudes within the organisations, but merely an attempt to be given "an even playing field."
"It is just a fact that if a foreign company knows it has little chance of being inspected after it receives its initial cGMP accreditation, it is more than likely to be not following rules properly," they said.
"In the absence of a referee there is a predictable winner every time - the least scrupulous."
A report released by Pricewaterhouse Coopers (PWC) said that it costs 25 per cent more and is less flexible to work in a GMP environment, Villax pointed out.
"So if you tend to break the rules you tend to win the race because in today's tough climate this would offer a significant competitive advantage."
EFCG and SOCMA both acknowledge that the EMEA and the FDA are faced with a daunting task to tackle this escalating problem.
There has been an accelerating rate of change within the industry over the last 20 years, with massive globalisation occurring driven by the pressure to drive drug manufacturing costs down.
US and EU manufacturers supplied 90 per cent of API needs 20 years ago where as now they are supplying less than 20 per cent. At the same time, the number of generic medicines accounted for less than five per cent 20 years ago where as now they account for over 50 per cent, with much of the API coming from Asia.
"The Asianisation of APIs has caught regulators by surprise and now they are having to play catch up," said the organisations.
"They now need to close the loopholes and conduct more foreign inspections of the same thoroughness as they would in the US and EU, particularly in high-risk facilities where compliance is less likely."