A former consultant to the company that acquired Drug Fair last year has pleaded guilty to two felony charges of using advance information about the takeover to make a $45,000 profit on Drug Fair stock.

Howard L. Davidowitz, 40, of New York faces up to five years in prison on each of the securities fraud and mail fraud charges filed against him in federal court here.

Davidowitz was a partner in the accounting firm of Ernst and Whinney in 1981 when he learned that Gray Drug Stores Inc. of Cleveland was interested in acquiring Drug Fair, said Assistant U.S. Attorney Robert N. Schwartz.

Assigned to Ernst and Whinney's retail consulting services program, Davidowitz was helping Gray assess the feasibility of acquiring Drug Fair and learned Gray was prepared to offer substantially more than the then-current market price of $10 a share for Drug Fair.

Despite Ernst and Whinney's strict rules against the use of inside information, Davidowitz purchased 11,000 shares of Drug Fair stock several days before the merger offer was made. When the price of the shares jumped after the announcement, Davidowitz sold the stock for a net profit of $45,746, according to the information.

Last August, Davidowitz agreed to a consent judgment in a civil action filed over the same allegations by the Securities and Exchange Commission, in which he agreed to pay back the profits he earned on the Drug Fair stock.