MCQ with answers

Drugs (Prices Control) Order, 2013

10 explained questions below · 57 on this instrument in the practice banks · Order as amended; ceiling prices follow the current National List of Essential Medicines.

The Drugs (Prices Control) Order, 2013 is issued under the Essential Commodities Act, 1955 and administered by the National Pharmaceutical Pricing Authority. It replaced the 1995 Order — which some older previous-year questions still assume — and changed the philosophy of price control from cost-based to market-based: the ceiling price of a scheduled formulation is derived from the average price to retailer of the brands with a meaningful market share, rather than from a manufacturer's costs.

The examined core is small and precise: what a scheduled formulation is and how the National List of Essential Medicines drives the schedule, how the ceiling price is calculated and revised each year in line with the Wholesale Price Index, the limit on annual price increases for non-scheduled formulations, the treatment of new drugs and of patented products, and what NPPA can do about overcharging. Questions are numerical only in the sense of knowing which percentage attaches to which rule.

The questions below are served from the reviewed bank; the badge on each item states whether its explanation quotes the Order or was independently fact-checked.

What the exams keep asking

  • ▸Scheduled formulations and the National List of Essential Medicines
  • ▸The market-based ceiling-price formula and the retailer margin
  • ▸Annual revision of ceiling prices linked to the Wholesale Price Index
  • ▸The limit on annual MRP increase for non-scheduled formulations
  • ▸Pricing of new drugs and exemptions for patented products
  • ▸Powers of NPPA — monitoring, overcharging and recovery

10 practice questions, each explained

Attempt first, then open the answer. Every explanation says why the right option is right — and, where the bank holds it, quotes the provision.

  1. Question 1MEDIUM

    Under the Drugs (Price Control) Order, 2013 (DPCO), which statement is CORRECT regarding price ceiling setting?

    • A)Manufacturers can set any price they choose without any regulatory constraint
    • B)Individual state governments set different prices for the same drug
    • C)NPPA (National Pharmaceutical Pricing Authority) sets price ceiling for essential drugs based on cost + margin formula
    • D)Prices are determined solely by market demand without regulatory intervention
    Show answer & explanation

    Answer: C) NPPA (National Pharmaceutical Pricing Authority) sets price ceiling for essential drugs based on cost + margin formula

    The DPCO 2013 empowers the NPPA to set and regulate prices of essential drugs listed in the Schedule. The price ceiling is calculated using a cost-plus markup formula to ensure affordability while allowing reasonable profit margins.

    Why the others fail

    • A) DPCO imposes price controls on essential drugs to ensure affordability.
    • B) NPPA sets uniform national prices under DPCO.
    • D) DPCO mandates regulatory price setting for essential medicines.

    Source: Drugs (Price Control) Order, 2013; NPPA Guidelines

    AI fact-checkedfrom the Drug Inspector bank
  2. Question 2MEDIUM

    Under the Drugs (Price Control) Order, 2013, which drugs are EXEMPT from price control regulations?

    • A)Only imported drugs are exempt; domestically manufactured drugs are always controlled
    • B)Drugs not listed in the NPPA's essential drugs schedule and new drugs with patents
    • C)Vaccines and immunologicals are always exempt from price regulation
    • D)All antibiotics are exempt from price control
    Show answer & explanation

    Answer: B) Drugs not listed in the NPPA's essential drugs schedule and new drugs with patents

    DPCO 2013 exempts drugs not listed in the essential drugs schedule from price control. This includes new drugs with patent protection, allowing innovators pricing freedom while maintaining affordability for essential, high-volume drugs.

    Why the others fail

    • A) Both imported and domestic drugs can be exempt if not on the essential list.
    • C) Vaccines are separately governed; some may be subject to price controls.
    • D) Some antibiotics may be on the essential list and subject to price control.

    Source: Drugs (Price Control) Order, 2013; Essential Medicines List

    AI fact-checkedfrom the Drug Inspector bank
  3. Question 3MEDIUM

    Under the Drugs (Price Control) Order 2013, which of the following drugs IS LIKELY to be on the essential drugs list subject to price control?

    • A)A newly approved cancer drug with patent protection
    • B)Paracetamol, a widely used fever and pain relief drug
    • C)An experimental immunotherapy available only in hospitals
    • D)A rare disease drug manufactured by a single company
    Show answer & explanation

    Answer: B) Paracetamol, a widely used fever and pain relief drug

    Essential drugs like paracetamol (high-volume, life-essential medicines) are on the NPPA list and subject to price control under DPCO 2013. The price ceiling is set using a cost-plus markup formula to ensure affordability.

    Why the others fail

    • A) New patented drugs are typically exempt.
    • C) Experimental drugs are not on the essential list.
    • D) Rare disease drugs are typically exempt from price control.

    Source: Drugs (Price Control) Order, 2013; NPPA Essential Medicines List

    AI fact-checkedfrom the Drug Inspector bank
  4. Question 4EASY

    Drugs (Price Control) Order 1995 and related orders from time to time are enforced by:

    • A)NPPA
    • B)CSIR
    • C)DBT
    • D)ICMR
    Show answer & explanation

    Answer: A) NPPA

    The National Pharmaceutical Pricing Authority (NPPA) enforces the Drugs (Prices Control) Order (superseded by DPCO 2013) and monitors compliance with notified ceiling prices.

    Why the others fail

    • B) CSIR is a scientific research body, not a drug-pricing regulator.
    • C) Department of Biotechnology has no role in drug price enforcement.
    • D) ICMR is a medical research body, not a pricing regulator.
    AI fact-checkedfrom the Drug Inspector bank
  5. Question 5EASY

    The National Pharmaceutical Pricing Authority (NPPA) was established in India to:

    • A)Grant licences for pharmaceutical manufacturing and distribution
    • B)Accredit pharmaceutical manufacturing facilities against GMP standards
    • C)Promote exports of Indian pharmaceutical products to foreign markets
    • D)Regulate drug prices, ensure availability of essential medicines at reasonable prices, and implement the DPCO
    Show answer & explanation

    Answer: D) Regulate drug prices, ensure availability of essential medicines at reasonable prices, and implement the DPCO

    NPPA (National Pharmaceutical Pricing Authority) was established in 1997 under the Ministry of Chemicals and Fertilizers (Department of Pharmaceuticals) to implement the Drug Prices Control Order (DPCO), fix and revise drug prices, ensure availability and accessibility of essential medicines, and monitor and enforce compliance with DPCO.

    Why the others fail

    • A) Manufacturing licences are granted by state/central licensing authorities under the D&C Act; NPPA's mandate is price regulation.
    • B) GMP accreditation and inspection are performed by drug regulatory authorities (CDSCO, state drug controllers); NPPA regulates prices.
    • C) Export promotion is the function of the Pharmaceuticals Export Promotion Council (Pharmexcil); NPPA focuses on domestic price regulation.
    AI fact-checkedfrom the Drug Inspector bank
  6. Question 6MEDIUM

    The DPCO 2013 fixes the price of 'scheduled formulations'. A scheduled formulation is one that appears in:

    • A)Schedule H of the D&C Rules 1945
    • B)The Indian Pharmacopoeia (IP) monograph list
    • C)The WHO Essential Medicines List (EML) only
    • D)The National List of Essential Medicines (NLEM) as notified by the Government of India
    Show answer & explanation

    Answer: D) The National List of Essential Medicines (NLEM) as notified by the Government of India

    Under DPCO 2013, 'scheduled formulations' are formulations of APIs listed in the National List of Essential Medicines (NLEM) notified by the Ministry of Health. The ceiling price of each scheduled formulation is calculated as the simple average of all brands with ≥1% market share, per the market-based pricing formula.

    Why the others fail

    • A) Schedule H lists drugs requiring prescription; it is not the DPCO scheduled formulation list. The DPCO schedule is derived from the NLEM.
    • B) IP monographs cover quality standards; the DPCO scheduled formulations list is based on the NLEM.
    • C) The DPCO is an Indian domestic order; it uses India's NLEM, not exclusively the WHO EML.
    AI fact-checkedfrom the Drug Inspector bank
  7. Question 7MEDIUM

    Which of the following bodies exercises executive responsibility for fixing and revising the ceiling prices of scheduled formulations under the Drugs (Prices Control) Order, 2013 in India?

    • A)Drugs Technical Advisory Board (DTAB)
    • B)National Pharmaceutical Pricing Authority (NPPA)
    • C)Central Drugs Laboratory (CDL)
    • D)Pharmacy Council of India (PCI)
    Show answer & explanation

    Answer: B) National Pharmaceutical Pricing Authority (NPPA)

    The National Pharmaceutical Pricing Authority (NPPA), established by the Government of India, is the expert body charged with implementing and enforcing the provisions of the DPCO, including the fixation and revision of prices of scheduled drugs.

    Why the others fail

    • A) DTAB deals with technical amendments under the Drugs and Cosmetics Act, not drug pricing.
    • C) CDL performs testing and analysis of drug samples.
    • D) PCI regulates pharmacy education and registration of pharmacists.
    AI fact-checkedfrom the GPAT bank
  8. Question 8MEDIUM

    The Drug Price Control Order (DPCO), 2013 is issued under the powers of which parent legislation?

    • A)Consumer Protection Act, 2019
    • B)Drugs and Cosmetics Act, 1940
    • C)Competition Act, 2002
    • D)Essential Commodities Act, 1955
    Show answer & explanation

    Answer: D) Essential Commodities Act, 1955

    The Drug Price Control Order (DPCO) 2013 is issued under Section 3 of the Essential Commodities Act, 1955, which empowers the Central Government to control the production, supply, distribution, and price of essential commodities including drugs.

    Why the others fail

    • A) The Consumer Protection Act provides consumer rights remedies; it is not the enabling law for DPCO.
    • B) The D&C Act regulates quality, safety, and manufacturing; price control is not within its scope.
    • C) The Competition Act addresses anti-competitive practices; it is not the source of DPCO price control powers.
    AI fact-checkedfrom the Drug Inspector bank
  9. Question 9MEDIUM

    Section 3 of the Essential Commodities Act, 1955 (under which DPCO 2013 is made) empowers the Central Government to control essential commodities in the interest of:

    • A)Promoting domestic pharmaceutical industry over imports
    • B)Maintaining or increasing supplies, securing equitable distribution, and making essential commodities available at a fair price to consumers
    • C)Generating maximum government revenue from pharmaceutical taxes
    • D)Aligning India's drug prices with WHO's benchmark pricing
    Show answer & explanation

    Answer: B) Maintaining or increasing supplies, securing equitable distribution, and making essential commodities available at a fair price to consumers

    Section 3 of the Essential Commodities Act 1955 empowers the Central Government to regulate production, supply, distribution, trade, and commerce of essential commodities to maintain supplies, ensure equitable distribution, and make them available at a fair price — the foundational rationale for DPCO 2013.

    Why the others fail

    • A) Industrial promotion is not the purpose of the Essential Commodities Act; it is a consumer protection/supply security statute.
    • C) Revenue generation is not the stated public interest under the Essential Commodities Act.
    • D) International price benchmarking is not the objective of the Essential Commodities Act.
    AI fact-checkedfrom the Drug Inspector bank
  10. Question 10HARD

    Under DPCO 2013, the National Pharmaceutical Pricing Authority (NPPA) fixes the ceiling price for drugs listed in the National List of Essential Medicines (NLEM). The ceiling price is based on:

    • A)The manufacturer's cost of production plus a fixed 10% profit margin
    • B)Simple average of prices of all branded versions of the molecule with at least 1% market share
    • C)The price of the innovator's brand at the time of generic entry
    • D)WHO international reference pricing adjusted for Indian inflation
    Show answer & explanation

    Answer: B) Simple average of prices of all branded versions of the molecule with at least 1% market share

    DPCO 2013 uses a market-based methodology: the ceiling price for a scheduled formulation is the simple average of the prices of all branded formulations in the market that have at least 1% market share (by value), plus applicable taxes.

    Why the others fail

    • A) DPCO 2013 uses market-based pricing (simple average of brands with ≥1% market share), not cost-plus with a fixed margin.
    • C) The innovator brand price is not the sole basis; simple average of all qualifying brands is used.
    • D) DPCO 2013 uses domestic market prices, not WHO international reference prices.
    AI fact-checkedfrom the Drug Inspector bank

Practise the full set with real marking

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