The Drugs and Cosmetics Act, 1940 was enacted to combat production and marketing of spurious / not of standard quality(NSQ) drugs and cosmetics causing serious health hazards and even death of consumers.

This performance audit of implementation of Drugs and Cosmetics Act, 1940 in Uttar Pradesh carried out by the CAG of India covering the period 1998-99 to 2002-03 revealed that due to various inadequacies in implementation of the provisions of the Act in the State such as acute shortage of Drug Inspectors, faulty system of licensing, shortfalls in inspections of manufacturing/selling units and collection of samples, inefficient Government Laboratories and non-appointment of the Government Analyst for Homeopathic medicines etc. the consumers were prone to risk of health hazards. Monitoring and evaluation of the implementation of the provisions of the Act was, by and large, non-existent.