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Low levels of pharmaceuticals are detected in surface, ground, and drinking water worldwide. Usage and incorrect disposal have been considered the major environmental sources of these micro-contaminants. Recent publications, however, suggest that wastewater from drug production can potentially be a source of much higher concentrations in certain locations. We investigated the environmental fate of active pharmaceutical ingredients in a major production area for the global bulk-drug market. Water samples were taken from a common effluent treatment plant near Hyderabad, India, which receives process water from about 90 bulk drug manufacturers. Surface water was analyzed from the recipient stream and from two lakes that are not contaminated by the treatment plant. Water samples were also taken from wells in six nearby villages. The samples were analyzed for the presence of twelve pharmaceuticals with LC-MS/MS. All wells were determined to be contaminated with drugs. Ciprofloxacin, enoxacin, cetirizine, terbinafine and citalopram were detected at >1microg l-1 in several wells. Very high concentrations of ciprofloxacin (up to 14 mg L-1) and other pharmaceuticals (up to 2 mg L-1) were found in the effluent of the treatment plant and in the two lakes (up to 6.5 mg L-1). Thus, insufficient wastewater treatment in one of the world's largest centers for bulk drug production leads to unprecedented drug contamination of surface, ground, and drinking water. This raises serious concerns regarding the development of antibiotic resistance, and it creates a major challenge for producers and regulatory agencies to improve the situation.