* Watchdog says structured network responsible for thefts
* All 28 EU countries now alerted in investigation
MILAN, May 2 (Reuters) - Italy is spearheading international efforts to catch a criminal ring that is stealing and recycling sophisticated drugs and reselling them for tens of millions of euros, the country's AIFA pharmaceutical watchdog said on Friday.
AIFA broadened investigations after reports last month that vials of Roche's breast cancer drug Herceptin had been stolen in Italy and reintroduced into the supply chain. It has now alerted authorities throughout Europe after finding that the theft was part of a much wider operation.
"Italy has become the breeding ground for collecting costly products that are then shipped on to other countries across Europe in what is a very lucrative business," AIFA's anti-counterfeiting head Domenico Di Giorgio told Reuters.
The watchdog, along with the Italian anti-fraud squad NAS, industry associations and the Health Ministry, is collecting data on a problem causing increasing concern for health authorities across Europe.
"All 28 European Union countries and police have been alerted and involved," Di Giorgio said.
The investigation started with Herceptin - Roche's third-biggest seller, bringing in 1.53 billion Swiss francs ($1.7 billion) in the first quarter of 2014 - and two other cancer drugs, Alimta and Remicade, but will soon involve more.
Di Giorgio said that most of the cases to date involved the selling of the original product but he would not rule out counterfeiting.
"The network is a kind of giant washing machine for illegally acquired products that focuses on expensive hospital drugs but also steals cargoes from trucks," Di Giorgio said.
An AIFA statement last month said that its investigation into the Herceptin theft had been instigated after a British wholesaler had alerted it to anomalies encountered when buying the drug through Italian wholesaler Farmaceutica Internazionale.
The watchdog discovered that the Italian company had ceased operating at the end of 2013 and also found that other drugs had been exported to the British wholesaler.
Di Giorgio said that the problem of drug thefts had exploded in the past two years and that fake companies in places such as Latvia, Hungary and Romania had been involved.
"Prosecutors in Naples are looking into just who is behind it all, but it's a very structured web and certainly not local," he said. ($1 = 0.8795 Swiss Francs)
(Editing by David Goodman)