UPSC Prelims Practice Questions — Work out a plan for capping prices of all drugs: SC to govt.

Q1. With reference to the regulation of medicine prices under the Drugs (Prices Control) Order (DPCO), 2013, consider the following statements: Which of the statements given above is/are correct?

  1. A medicine becomes subject to a ceiling price fixed by the National Pharmaceutical Pricing Authority when it is placed in Schedule-I of the DPCO, which draws on the National List of Essential Medicines.
  2. The maximum retail price of a non-scheduled formulation stays frozen at its launch level unless the National Pharmaceutical Pricing Authority approves a revision.
  3. Ceiling prices of scheduled formulations are revised every year with reference to the Wholesale Price Index.
  • A. 1 and 3 only
  • B. 2 and 3 only
  • C. 1, 2 and 3
  • D. 1 and 2 only

Q2. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. The 2019 cap on trade margins of select non-scheduled anti-cancer medicines led to reductions of up to 90% in the maximum retail price of some brands.
  2. Trade Margin Rationalisation works by fixing the price at which manufacturers sell their products to stockists.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q3. With reference to Trade Margin Rationalisation (TMR) and ceiling-price control of medicines in India, consider the following statements: Which of the statements given above is/are correct?

  1. Under TMR, a company remains free to set its price to stockist, and only the mark-up between that price and the maximum retail price is restricted.
  2. TMR can be applied only to medicines that are already subject to a ceiling price under the DPCO, 2013.
  3. The 30% cap applied to anti-cancer medicines in 2019 limited the retailer's margin alone and left the stockist's margin unregulated.
  • A. 2 and 3 only
  • B. 1 and 2 only
  • C. 1, 2 and 3
  • D. 1 only

Q4. In the context of the proposal to make Trade Margin Rationalisation a standing feature of the Drugs (Prices Control) Order, 2013, consider the following statements: Which of the statements given above is/are correct?

  1. When the National Pharmaceutical Pricing Authority capped trade margins on 42 anti-cancer medicines in 2019, those medicines thereby became scheduled formulations.
  2. Since the DPCO is an order issued by the Central Government under a parent statute, a standing TMR provision can be added to it by executive notification without a fresh Act of Parliament.
  3. Incorporating TMR into the DPCO would give margin caps a standing basis instead of one that depends on invoking extraordinary circumstances in public interest.
  • A. 1 and 3 only
  • B. 2 and 3 only
  • C. 1, 2 and 3
  • D. 1 only

Q5. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. In 2019, the National Pharmaceutical Pricing Authority was able to cap trade margins on several non-scheduled anti-cancer medicines even though these medicines had no ceiling price under the DPCO, 2013.
  2. The DPCO, 2013 contains a provision allowing the price of any drug, scheduled or not, to be fixed in extraordinary circumstances where public interest so requires.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q6. With reference to the National Pharmaceutical Pricing Authority (NPPA), consider the following statements: Which of the statements given above is/are correct?

  1. It was constituted through an executive resolution of the Government, not by an Act of Parliament.
  2. Its monitoring role extends to non-scheduled formulations, and not only to those under ceiling prices.
  3. Granting marketing approval for a new drug on grounds of safety and efficacy lies outside its mandate.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 1, 2 and 3
  • D. 2 only

Q7. Hearing a public-interest petition, the Supreme Court described excessive mark-ups on medicines as 'broad daylight dacoity' and asked the Union Government to work out a plan for capping prices of all drugs. In this context, consider the following statements: Which of the statements given above is/are correct?

  1. Article 47 lists the improvement of public health among the primary duties of the State, but it is not by itself enforceable in a court.
  2. Reading access to health care into the right to life under Article 21 allows the Court to entertain petitions on the affordability of medicines.
  3. On this constitutional basis the Court can itself notify ceiling prices under the DPCO in place of the National Pharmaceutical Pricing Authority.
  • A. 2 and 3 only
  • B. 1, 2 and 3
  • C. 3 only
  • D. 1 and 2 only

Q8. With reference to the affordability of patented medicines in India, consider the following statements: Which of the statements given above is/are correct?

  1. Section 3(d) of the Patents Act, 1970 operates after a patent has been granted, allowing the Controller to reduce the price of the patented medicine.
  2. A compulsory licence may be sought under the Patents Act on the ground that a patented invention is not available to the public at a reasonably affordable price.
  3. A cap on the trade margin of a patented medicine limits the distribution mark-up without taking away the patent holder's exclusive right to make and sell it.
  • A. 1, 2 and 3
  • B. 2 and 3 only
  • C. 3 only
  • D. 1 and 2 only