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. The Act was not implemented effectively in the State. The Drug Controller‘s office did not have master control registers indicating the numbers of manufacturing/ selling units, the validity period of licenses, the dates of inspections, dates of collection of samples, the reports of testing laboratory etc. Licenses to manufacturing and selling units were not renewed periodically. There was huge shortfall in the survey and inspection of sick and manufacturing units. Inordinate delay was observed in the testing of drugs and consequential action against the manufacturers/sellers of sub-standard drugs. There was lack of adequate infrastructure facilities for quality testing of samples collected. Price control mechanism was not in vogue. The possibility of manufacture and sale of sub-standard drugs and cosmetics could not be ruled out and the intended objective of making available essential life saving drugs at fair prices to masses was not realised. Main audit findings are summarised below:

1. The Controller of Drugs did not have a master control register which would indicate the actual status of manufacturing/selling units of the State and licenses to manufacturing/selling units were not periodically renewed, though required.
2. Targets for inspection of selling/manufacturing units in the State fell short by 59 to 68 per cent during 1998-2003. In 25 districts, inspections carried out by 34 Drug Inspectors fell short by 79 to 86 per cent.
3. Samples collected fell short of targets by 96 to 97 per cent. Only 75 per cent of samples of drugs collected during 1998-2003 by the State Drug Control Laboratory, Patna were tested. Government Analyst attributed the shortfall to inadequate infrastructure such as chemical, power supply, testing equipment and manpower.
4. The Controller of Drugs did not initiate punitive and deterrent action in respect of 122 cases of sub-standard drugs reported by five Regional Licensing Authorities during 1998-2003.
5. Interface of State Drug Regulatory Authority with pharmaceutical industry/trade, consumers and medical professionals was non-existent. This adversely affected dissemination of information and feed back on the functioning of enforcement authorities.
6. No intelligence branch was set up for keeping a watch on illegal manufacture of drugs and its trade activities. No training was imparted to Drug Inspectors to tone up enforcement of the Act.
7. Controller of Drugs stated that there was no price control mechanism in vogue in the State.
8. There was lack of monitoring and evaluation mechanism to ensure effective implementation of the provisions of the Drugs and Cosmetics Act, 1940.