A Chinese man living in New Zealand has been arrested following a three-year long police inquiry into the international distribution of counterfeit drugs.

The 32-year-old man was arrested by Auckland Metro Crime and Operations Support (AMCOS) detectives in Wellington yesterday on a provisional arrest warrant, police said today.

He appeared in Wellington District Court and was remanded on bail to next month pending a further hearing to consider a request for his extradition to the United States.

AMCOS field crime manager Detective Inspector Stu Allsopp-Smith said the investigation was carried out with staff from various United States agencies, including the ICE (Immigration and Customs Enforcement), Homeland Security Investigations and the Food and Drug Administration's Office of Criminal Investigations.

Counterfeit drugs included sexual stimulants, heart medications, pain killers and other medications which police believed came from China and were distributed internationally via the internet, Mr Allsopp-Smith said.

"The investigation has uncovered a strong link between the New Zealand resident and the international supply of counterfeit pharmaceuticals," he said.

Mr Allsopp-Smith said the supply of counterfeit drugs was always a concern because there was no guarantee of quality controls. Testing has shown that many counterfeit drugs have no medical benefits and may even pose a risk to users.