A review of the implementation of the Drugs and Cosmetics Act, 1940 in Odisha during the period 1998-2003 revealed vital lapses in enforcement of major provisions of the Act by the State Drug Control Authorities (SDCAs). There were shortfalls in inspection of premises of the units licensed for manufacture and sale of drugs. Medicine shops, blood bank and manufacturing units of Large Volume Parenterals (LVP) were allowed to continue without valid licence. While the State Drug Testing and Research Laboratory lacked infrastructure to test all types of allopathic drugs, there was absence of a State level laboratory for testing of ayurvedic and homoeopathic drugs. Besides, the State machinery was not effective in recalling from the market drugs declared not of standard quality, to check their further use.