The SPC was established in 1971 under the State Industrial Corporations Act Number 49 of 1957, as a result of the Report in March of that year of the Bibile - Wickramasinghe commission, appointed by the then Prime Minister Sirimavo Bandaranaike.

The SPC channelled all imports and production of pharmaceuticals, calling for worldwide bulk tenders which were limited to the approved drugs listed in the National Formulary.

The SPC bought from an Indian company the raw material necessary for a widely used tranquilliser at a much lower price than that charged by a Swiss multinational.

The Prescriber, a quarterly publication edited by the National Formulary Committee, was published by the SPC and distributed to all medical personnel.

The SPC the sole supplier of pharmaceuticals, surgical consumable items, laboratory chemicals and equipment to all institutions administered by the Ministry of Health.