The Drugs and Cosmetics Act 1940 (Act) is a Central Act to be implemented by all the States. The Act along with the other associated Acts and the rules made thereunder regulate the import, manufacture, distribution, sale and clinical research of drugs and cosmetics.

This performance audit by the CAG of India covering the period 1998-99 to 2002-03, revealed that in Andhra Pradesh the Drugs Control Administration (DCA) was functioning with only 55 Drugs Inspectors (DIs) for the last 10 years against the requirement of 240. Huge shortage of DIs adversely affected the functioning of the DCA and menace of spurious drugs continued to prevail. No follow-up action was taken to withdraw the drugs (from the market) declared as not of standard quality. The licensing system was ineffective and the DCA did not maintain proper record. Monitoring at State level was poor. Thus the objective of prevention of the menace of spurious drugs to eliminate the danger to human life had not been achieved.