Introduction: Drug shops increase access to essential medicine, fill the gap left by the government health care facilities and they remain the most preferred source of medicine. But there are regulations that stipulate the conditions under which drug shops must operate if they are to promote the health of the public , unfortunately there are wide spread noncompliance with these regulations and therefore I set out to assess the drug shop compliance with licensing and inspection regulations in regulating drug shop practices in Lango Sub region. Methodology: The study was a survey that targeted at all the drug hops in Lango sub region and a census of 298 drug shops conducted in the randomly sampled districts of Amolatar, Alebtong, Lira, Kole and Lira municipality between 20th November and 19th December 2013. Researcher administered questionnaires were administered to drug shop operators, inspections of drug shops done using inspection checklist and in depth interview was done to three NDA staffs using the interview guide. Results: Findings have shown that, most (74.4%) drug shops were located in trading centers and half (50.3%) of these drug shops were being operated by employees. Across all the districts, only 30.9% of drug shops had valid operation permits. Only 8.4% of the drug shop operators across the districts were being operated by qualified personnel and all of them were enrolled nurses. No drug shop was found selling only class C drugs as prescribed in the regulation, but other services which were being offered includes laboratory services; sale of class A and B drugs, offering surgical and clinical services; and no drug shop was following good dispensing practices. Although 30.9% of drug shops had certificates of suitability of premises, no drug shop met all the criteria of suitability of premises in the study. Awareness of licensing and inspection regulations, presence of regulatory documents, inspections and sanctions were the factors influencing compliance to licensing and inspection regulations by drug shop operators. Inadequate resources were the main factor hampering enforcement of these regulations by NDA. Binary logistic regression analysis revealed by the wald statistic that regulation of persons (w=3.106) highly determines drug shops’ compliance to licensing and inspection regulations compared to regulation of practices (0.246) and regulation of premises (0.13). More so independence T-test revealed that awareness of regulations (t=-4.869, p<0.05), presence of regulatory documents (t=2.471, p<0.05), the frequency of drug shop inspection (t=9.966, p<0.05), sanctions imposed on drug shops (t=-2.01, p<0.05) significantly influence drug shops’ compliance to licensing and inspection regulations. Conclusion: Drug shops were not complying with licensing and inspection regulations due to inadequate enforcement of regulations and regulations that only allow the sale of class C drugs in Drug shops. Recommendations: NDA should revise regulations to include essential drugs in the class C group and provision other services; creating a provision in the regulation that involves local leaders, civil society organizations and consumers in the implementation of these regulations; and organizing them in to groups/associations to improve on the enforcement of these policies. The Government of Uganda should invest in training more health workers to ensure that qualified people operate the drug shops and consider giving soft loans and incentives to registered drugshop operators to improve on drug shop services and ppremises. Scholars/Researchers, Health Institutions and NDA should conduct further research on the areas and scope of involvement of local leaders, civil society organizations and consumers in the implementation of the policy.

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