UPSC Prelims Practice Questions — Revised Prices of Anti-Cancer Medicines to Come into Effect from 9th November;

Q1. With reference to the two methods used in India to regulate the prices of medicines, consider the following statements: Which of the statements given above is/are correct?

  1. Under trade margin rationalisation, the price at which the manufacturer first sells the drug is left to the manufacturer, while the markup between that point and the MRP is capped.
  2. Ceiling-price control applies to medicines in the Schedule derived from the National List of Essential Medicines, and these ceilings are revised every year in line with wholesale price inflation.
  3. Since trade margin rationalisation fixes no ceiling, it can restrain the MRP of a new drug at launch but cannot reduce the MRP of a brand already on the market.
  • A. 1 and 3 only
  • B. 2 and 3 only
  • C. 1 and 2 only
  • D. 1, 2 and 3

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

  1. Non-scheduled formulations account for only a small part of the domestic pharmaceutical market, so ceiling prices cover most medicines actually sold.
  2. The annual MRP increase allowed for a non-scheduled formulation is linked to the same wholesale price index used to revise the ceiling prices of scheduled formulations.
  3. In the ordinary course, a medicine becomes subject to ceiling-price fixation because it is included in the National List of Essential Medicines, not because it is expensive.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1, 2 and 3
  • D. 3 only

Q3. With reference to the National Pharmaceutical Pricing Authority (NPPA), consider the following statements: Which of the statements given above is/are correct?

  1. Because it was created by a Government of India resolution, its pricing powers rest on powers delegated to it by the Central Government, not on a statute that sets up the Authority.
  2. Being a statutory regulator, it can be wound up only if Parliament amends the Act under which it was constituted.
  3. It can recover from a company the amount overcharged to consumers when a formulation is sold above the permissible price.
  • A. 1 and 3 only
  • B. 2 and 3 only
  • C. 1 only
  • D. 1, 2 and 3

Q4. With reference to the legal basis of drug price regulation in India, consider the following statements: Which of the statements given above is/are correct?

  1. Drug price control orders are issued by the Central Government under the Essential Commodities Act, 1955, so they are delegated legislation and not a separate Act of Parliament.
  2. The price control order contains a public-interest power under which the prices of even non-scheduled medicines and devices can be regulated.
  3. As of 2026, DPCO 2013 has no permanent, generally applicable trade margin framework, so trade margin caps operate only through specific notifications.
  • A. 1 and 3 only
  • B. 1, 2 and 3
  • C. 1 and 2 only
  • D. 2 only

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

  1. NPPA could cap the trade margins of anti-cancer drugs that are not part of the National List of Essential Medicines.
  2. NPPA was set up in 1997 through a resolution of the Government of India.
  • 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 compulsory licensing under the Patents Act, 1970, as a route to affordable medicines, consider the following statements: Which of the statements given above are correct?

  1. A compulsory licence may be sought on the ground that the patented invention is not available to the public at a reasonably affordable price.
  2. Failure to work the patented invention in the territory of India is a ground on which a compulsory licence may be sought.
  3. A compulsory licence transfers ownership of the patent to the licensee for the remaining term of the patent.
  4. Under a compulsory licence, the patentee remains entitled to royalty or other remuneration from the licensee.
  • A. 1 and 2 only
  • B. 1, 2 and 4 only
  • C. 1, 2, 3 and 4
  • D. 2, 3 and 4 only

Q7. Consider the following facts: A 30% cap on trade margins (measured as a share of MRP) was applied to certain non-scheduled cancer drugs without changing the price at which manufacturers sell them at the first point of sale. After the cap, the MRPs of 600 formulations fell by more than half, and estimated consumer savings were about ₹3,500 crore a year. Which of the following inferences can validly be drawn from the above?

  1. Before the cap, the trade margin on many of these formulations was far above 30% of their MRP.
  2. The cap has reduced the amount manufacturers realise from each unit they sell at the first point of sale.
  3. The cap will reduce out-of-pocket expenditure for every cancer patient in India.
  • A. 1, 2 and 3
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1 only