FSDA issues detailed guidelines to crack down on operators misusing drug licences for illegal drug trade
Licences in the name of dummy persons or for establishments in residential areas will not be issued under any circumstances
Suspected drugs to be traced up to the manufacturer ; bank transactions and digital records to be scrutinised
Counterfeit drugs to invite FIR under the Drugs and Cosmetics Act as well as BNS; organised crime provisions to apply in some cases
Special monitoring of codeine syrups, fast-moving medicines, painkillers and drugs falling under the NDPS category
Lucknow, August 2026 : To ensure the availability of quality and safe medicines across the state, the illegal trade involving fake, substandard, adulterated and NDPS-category drugs will now face stricter action.
Along with crackdown on operators misusing drug sale licences for illegal trade, the Yogi government has issued guidelines to prevent obtaining licences in the names of dummy persons, sale, distribution and storage of medicines without licences, fake billing, stock manipulation and suspicious drug supply chains.
Under the guidelines, issued by the Food Safety and Drug Administration (FSDA), Uttar Pradesh, the background of applicants will be thoroughly verified before a drug licence is issued.
Any attempt to obtain a new wholesale drug licence in the name of close relatives or dummy persons or habitual offenders previously found involved in illegal trade, or owners or accused persons of firms whose licences were cancelled, will be completely prohibited.
According to the Standard Operating Procedures (SOPs) issued by FSDA Commissioner Dr Roshan Jacob, while issuing a new wholesale drug licence, the Drug Licensing Authority (Sale) and Drug Inspectors will verify the applicant and the firm as per previously issued instructions. It will be ensured that persons previously found involved in illegal drug trade cannot obtain a new licence in the name of their husband, wife, brother, sister, parents or other close relatives, or any dummy person. It will also be ensured that drug sale licences are not issued to establishments located in residential areas. During physical inspection, it must also be verified that the proposed premises is actually being operated for commercial use.
As per the SOP, during inspections it will be mandatory to verify whether the establishment is actually being operated by the licence holder. If any person other than the licence holder is found operating the establishment, their rights or authorisation letter will be checked. It will also be examined whether a licence obtained in the name of a woman or any other person is actually being used by someone else. The bank account, GST registration and other legal registrations must also be in the name of the licence holder. If a person other than the individual recorded in the licence documents is found involved in operating the establishment, action will be taken for suspension or cancellation of the licence and prosecution.
If medicines are found stored without a licence in an illegal basement, residential house or rented room apart from the licensed shop, strict legal action will be taken against the concerned person. This means that the inspection will no longer remain limited to licensed shops but will also cover potential locations where medicines may actually be stored or illegal operations conducted.
Any mismatch between the ledger stock and physical stock of fast-moving and high-value medicines such as diabetes, hypertension, antibiotics, cancer drugs and painkillers will also be treated seriously. If the stock discrepancy indicates drug trading without purchase or sale bills, the sale may be stopped as necessary and the purchase, sale and source of the medicines will be investigated under the Drugs and Cosmetics Act, 1940.
If medicines are purchased from the same firm and returned to the same firm merely to create paper transactions or adjust stock, or if abnormally low-price sales or cross-billing among a limited group of local sellers are detected, the investigation will be taken up to the manufacturer.
The operation of billing software such as Marg used in the drug trade will also be monitored. It must be ensured that the software vendor is authorised and that complete control of the software remains with the licence holder. Unauthorised operation, negative stock, backdated billing, deletion or destruction of data, manipulation of physical stock verification and maintenance of duplicate accounts for paper transactions will be thoroughly investigated. If such activities are found to be linked to counterfeit drug trade, action will not be limited to the Drugs and Cosmetics Act; FIRs will also be registered under relevant provisions of the Bharatiya Nyaya Sanhita (BNS), 2023.
During the preliminary examination of fast-moving, high-value and suspected drugs, their legend, label, spelling, name, formula, batch number, manufacturing date, expiry date, address of the manufacturing or marketing company, file and blister packaging will be minutely examined. The size, shape and security features of the drug will also be checked. If any difference is found from the original sample, its sale will be stopped immediately and the sample will be sent to the government analyst for testing. The source of the drug will also be verified promptly under the relevant provisions of the Drugs and Administration Act.
If a valid source of a drug is not available or the concerned manufacturing firm denies having manufactured it, the drug will be treated as counterfeit or spurious under the Drugs and Cosmetics Act, 1940, and strict legal action will be initiated immediately.
If the government analyst confirms the drug to be spurious, the concerned manufacturing firm will be investigated in accordance with the provisions of the previously issued SOP. Once it's determined that the drug is counterfeit or spurious , a joint FIR will be registered against the firm under the relevant provisions of the BNS, 2023, in addition to action under the Drugs and Cosmetics Act.
If government supplies, ESI supplies, defence supplies, physician samples or expired medicines are found to have been relabelled and sold in the market, samples will be taken into custody and an FIR will be registered. Similarly, cold-chain biological products such as insulin and vaccines found stored at normal temperatures instead of the prescribed 2–8°C range will be taken into custody and action will be initiated as per rules.
As soon as any discrepancy or suspicion emerges during an inspection, the Drug Inspector will begin an investigation on the spot without delay. The entire purchase and sale chain of the medicine, along with bank transactions, will be back-tracked. In cases involving abnormally low-price sales or mutual billing among local sellers, it will be mandatory to establish whether the medicine was actually manufactured by the stated manufacturer. For this purpose, an in-depth investigation will be conducted up to the manufacturer level.
If purchase bills involving inter-district or inter-state transactions appear suspicious or the actual source of a drug is concealed, the Drug Inspector of the concerned state or district will be informed through email, WhatsApp and mobile phone. Physical verification of the manufacturer or supplier firm will then be conducted. If links, a nexus or a billing loop between multiple firms are found, all firms connected to the syndicate will be subjected to a joint intensive investigation.
Special emphasis has been placed on securing evidence during raids and inspections. CCTV DVRs, photographs of seals and batch numbers on blisters, e-way bills, transport receipts, statements of concerned persons and digital records will mandatorily be seized as evidence and included in the investigation report. The objective is to establish, through evidence, the entire drug supply chain, the actual source of the medicines and the role of individuals involved in the trade.
In cases of serious irregularities or confirmation of counterfeit or spurious drugs, the sale and distribution of the medicines will be stopped immediately. Once confirmed, the concerned stock will be duly seized. A notice will be issued without delay under the Drugs Rules, 1945, followed by action for suspension or cancellation of the licence. The order must mandatorily be served on the licence holder within a maximum of one working day.
Once a licence is cancelled, the purchase and sale of medicines by the concerned firm will be completely stopped. Disposal of medicines will be permitted only after verification of valid purchase records submitted by the firm. If valid records are not available, the entire stock will be taken into government custody.
In serious cases involving narcotic category drugs, codeine syrups, fast-moving medicines, painkillers and other NDPS-category drugs, as well as organised illegal drug trade, action will not be limited to the Drugs and Cosmetics Act. Joint FIRs will be registered under the relevant provisions of the BNS, 2023 and the NDPS Act. If organised crime is established during the investigation, proceedings will also be initiated under the relevant provisions of the BNS.
Firms, individuals or entities found guilty of serious violations will be mandatorily debarred from obtaining licences under the relevant Government of India notification. It will also be ensured that a new licence is not issued to the spouse or business partner, associate of such a person, as recorded in the available documents.
The guidelines clearly direct that all Drug Inspectors will ensure strict compliance with every prescribed stage and point during inspections of wholesale and retail drug establishments.
No unnecessary delay will be allowed during the investigation so that evidence remains secure and the strictest legal action can be ensured against those involved in the manufacture, distribution and trade of fake, substandard, adulterated and illegal drugs.
