UPSC Prelims Practice Questions — Cheaper Cancer Medicines: What the New Margin Cap Means for Patients

Q1. With reference to the institutional design of drug-price control in India, consider the following statements: Which of the statements given above is/are correct?

  1. A revision of the National List of Essential Medicines can change which formulations are subject to ceiling-price control under the Drugs (Prices Control) Order, 2013.
  2. The authority that fixes ceiling prices of medicines is also the body that decides which medicines are to be treated as essential.
  3. Formulations not listed in the First Schedule of the Drugs (Prices Control) Order, 2013 fall entirely outside the scope of that Order.
  • A. 1 and 2 only
  • B. 1 only
  • C. 1, 2 and 3
  • D. 2 and 3 only

Q2. With reference to scheduled and non-scheduled formulations under the Drugs (Prices Control) Order, 2013, consider the following statements: Which of the statements given above are correct?

  1. Ceiling prices of scheduled formulations are revised every year on the basis of the Wholesale Price Index of the preceding calendar year.
  2. A manufacturer may raise the MRP of a non-scheduled formulation by any amount once a year, provided no further increase is made in the following twelve months.
  3. The annual Wholesale Price Index-linked revision applies to non-scheduled formulations in the same way as to scheduled ones.
  4. The National Pharmaceutical Pricing Authority monitors the prices of non-scheduled formulations as well as scheduled ones.
  • A. 3 and 4 only
  • B. 2 and 3 only
  • C. 1 and 4 only
  • D. 1 and 2 only

Q3. With reference to Trade Margin Rationalisation as applied to medicines in India, consider the following statements: Which of the statements given above is/are correct?

  1. It leaves the manufacturer's price to the stockist untouched and restricts only the markup between that price and the MRP.
  2. A cap of 30% on the trade margin means that the MRP of every covered brand falls by 30%.
  3. The trade margin is computed without the GST component, which is then levied over and above the capped price.
  • A. 1 and 3 only
  • B. 1 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q4. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Under the routine provisions of the Drugs (Prices Control) Order, 2013, anti-cancer medicines that are not in the National List of Essential Medicines have no ceiling price fixed for them.
  2. A non-scheduled formulation becomes a scheduled formulation once its MRP rises by more than 10% within twelve months.
  • 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

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

  1. Under the Drugs (Prices Control) Order, 2013, the price of a medicine can be lowered by government order in the interval between two annual Wholesale Price Index-based revisions.
  2. Paragraph 19 of the Order enables the Government, in extraordinary circumstances and in the public interest, to fix or revise the price of any drug at any time.
  • 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. A patented anti-cancer drug is sold in India by a single company at a price that most patients cannot afford. With reference to the legal options available in such a situation, consider the following statements: Which of the statements given above is/are correct?

  1. Once a compulsory licence is granted for the drug, the patent holder loses any entitlement to be paid by the licensee.
  2. The Government may regulate the drug's retail price in the public interest without waiting for the patent to expire.
  3. Under the TRIPS framework as clarified by the Doha Declaration, India is free to decide the grounds on which compulsory licences are granted and is not restricted to public health emergencies.
  • A. 1, 2 and 3
  • B. 1 and 2 only
  • C. 2 only
  • D. 2 and 3 only