Government of Nepal has promulgated the Drug Act 1978, to prohibit the misuse or abuse of drugs and allied pharmaceutical materials as well as the false or misleading information relating to efficacy and use of drugs and to regulate and control the production, marketing, distribution, export-import, storage and utilization of those drugs which are not safe for the use of the people, efficacious and of standard quality.

To implement and fulfill the aim of Drug Act 1978 and various regulations under it Government of Nepal established Department of Drug Administration (DDA) in 1979.

In accordance with the objectives of the National Health Policy 1991, to improve and manage by establishing co-ordination among governmental, non-governmental and private organizations involved in the activities related to drug production, import, export, storage, supply, sales, distribution, quality assessment, regulatory control, rational use and information flow, the National Drug Policy 1995 has been implemented. Achieving the aim and objectives of National drug Policy is another important area for DDA.