A favourite target for drug counterfeiters is the cholesterol-lowering medicine Lipitor, the world's best-selling drug. It is made by the American company Pfizer and has a global market worth $12.9bn (£6.5bn).

In July 2005, 70 packs of counterfeit Lipitor, marked with genuine batch numbers, were found in two separate licensed wholesalers in the UK. Dutch customs intercepted a consignment of counterfeit Lipitor bound for Canada and found 10,000 packs in UK packaging.

The Medicines and Healthcare Products Regulatory Agency (MHRA) recalled the suspect batch numbers and more than half the 520 packs returned were found to be counterfeit. Around 2,500 counterfeit packs had already been consumed or discarded by NHS patients. Days after that incident came to light a second batch of counterfeit Lipitor was found.

Two other incidents involving fake Lipitor occurred last year. Last June, the MHRA announced that it had raided addresses in north London, West Yorkshire and Manchester and seized hundreds of thousands of pounds worth of counterfeit medicines.

In 2004, investigators uncovered a "drug factory" in Wembley, north London, making fake Viagra, the tranquillisers diazepam and nitrazepam, and steroids. Three men were arrested and the MHRA estimated the Wembley site had the capacity to manufacture 500,000 tablets a day. The key defendant, Allen Valentine, 46, of Harrow Weald, north London, was jailed for five-and-a-half years and fined £1.2m, an indication of the profits to be made from the illegal trade. He faces a further seven years in jail if he does not pay.

Counterfeit drugs are flooding into Europe from across the world. Customs seizures published in November listed them as a separate category for the first time, in an indication of the growing trade.

The figures showed that more than 560,598 packets of fake medicines were seized last year in 148 operations, twice the rate in 2004. Three-quarters were imported from India, 7 per cent from Egypt and 6 per cent from China. The counterfeits included Viagra, cholesterol and cancer medicines, antibiotics and Tamiflu, the antiviral drug being stockpiled against an avian flu pandemic.

Most counterfeits contain the correct active ingredients because the fraudsters want to avoid detection and keep their customers returning for further supplies. But they are not manufactured to the same standards or under the same quality controls.

The UK is the most vulnerable country in Europe to counterfeiting owing to the high level of "parallel importing" ­ drugs sold to a foreign country and then imported into Britain ­ and the fact that English is an international language, according to a report by the School of Pharmacy at the University of London.

Professor David Taylor, the author of the report, Trick or Treat, said: "The present system encourages traders to buy modern medicines cheaply in parts of Europe where governments impose low prices and sell them on in new packages in the EU where government-controlled prices are higher. [This creates] a pharmacy culture that increases counterfeit-medicine hazards."

The MHRA said it operated a "comprehensive anti-counterfeiting strategy". It added: "Whilst the UK's legitimate pharmaceutical supply chain ... has one of the best international records for being difficult to breach, it is recognised that no supply chain is impenetrable ­ whatever the regulatory and surveillance safeguards that may be in place."