Drug produced by a police department (4)
I believe the answer is:
acid
'drug' is the definition.
(acid is a kind of drug)
'by a police department' is the wordplay.
'by' is a charade indicator (letters next to each other).
'police department' becomes 'CID' (abbreviation for Criminal Investigation Department).
'a' put next to 'cid' is 'ACID'.
'produced' acts as a link.
(Other definitions for acid that I've seen before include "Polluted precipitation" , "Bitter or sour" , "Caustic and biting" , "Vinegary" , "Tart, sour" .)