Introduction: The National Pharmaceutical Pricing Authority (NPPA) is the key government body responsible for drug pricing regulation in India. Its core functions include price fixation and revision of ceiling prices for scheduled formulations under the DPCO, monitoring prices of non‑scheduled drugs, recovering overcharges, and ensuring availability and affordability of essential medicines. NPPA also collects production, sales and market‑share data, issues price control orders and show‑cause notices, and advises the central government on pharmaceutical pricing policy. Understanding NPPA functions, DPCO provisions, ceiling‑price calculation and enforcement mechanisms is essential for B.Pharm students. Now let’s test your knowledge with 30 MCQs on this topic.
Q1. What is the primary function of the National Pharmaceutical Pricing Authority (NPPA)?
- Granting marketing approvals for new drugs
- Fixing and monitoring drug prices to ensure affordability
- Conducting clinical trials for generics
- Manufacturing essential medicines for government
Correct Answer: Fixing and monitoring drug prices to ensure affordability
Q2. In which year was NPPA established?
- 1985
- 1997
- 2005
- 2013
Correct Answer: 1997
Q3. NPPA functions under which Ministry of the Government of India?
- Ministry of Health and Family Welfare
- Ministry of Chemicals and Fertilizers
- Ministry of Commerce and Industry
- Ministry of Science and Technology
Correct Answer: Ministry of Chemicals and Fertilizers
Q4. Which legislative order does NPPA implement and enforce for price control of medicines?
- Drugs and Cosmetics Rules
- Clinical Trial Rules
- Drugs (Prices Control) Order (DPCO)
- Essential Commodities Act
Correct Answer: Drugs (Prices Control) Order (DPCO)
Q5. Which category of formulations does NPPA fix ceiling prices for directly?
- Non‑scheduled formulations only
- Scheduled formulations listed under DPCO
- Veterinary formulations only
- All medical devices
Correct Answer: Scheduled formulations listed under DPCO
Q6. Under DPCO 2013, the ceiling price of a scheduled formulation is calculated using which method?
- Weighted average of prices of top five brands
- Simple average of prices of all brands with >1% market share
- Highest retail price among brands
- Manufacturers’ suggested retail price (MSRP)
Correct Answer: Simple average of prices of all brands with >1% market share
Q7. NPPA monitors prices of non‑scheduled formulations primarily to do what?
- Set manufacturing standards
- Prepare clinical guidelines
- Detect abnormal price rises and ensure affordability
- License new pharmacies
Correct Answer: Detect abnormal price rises and ensure affordability
Q8. Which of the following is NOT a power or function of NPPA?
- Recovering overcharged amounts from companies
- Issuing show‑cause notices for price violations
- Granting marketing authorization for new drugs
- Advising government on pricing policy
Correct Answer: Granting marketing authorization for new drugs
Q9. If a company sells a scheduled formulation above the ceiling price, NPPA can:
- Recover overcharged amount with interest
- Confiscate company assets without notice
- Automatically revoke company registration
- Directly imprison company directors
Correct Answer: Recover overcharged amount with interest
Q10. For ceiling‑price calculation under DPCO, market share data is typically taken from which period?
- Last 3 months
- Last 6 months
- Last 12 months
- Last 5 years
Correct Answer: Last 12 months
Q11. NPPA collects and maintains which types of data to support pricing decisions?
- Production, imports, sales and market‑share data
- Patient medical records
- Clinical trial raw data
- Retail store footfall statistics
Correct Answer: Production, imports, sales and market‑share data
Q12. Which body enforces drug price control orders at the state level in coordination with NPPA?
- Central Drugs Standard Control Organization (CDSCO)
- State Drug Control Authorities
- National Health Mission
- Indian Pharmacopoeia Commission
Correct Answer: State Drug Control Authorities
Q13. NPPA’s advice to the central government may include recommendations to:
- Remove price controls or include new medicines under price control
- Abolish the drug regulatory system
- Replace pharmacopoeial standards
- Suspend drug manufacturing across the country
Correct Answer: Remove price controls or include new medicines under price control
Q14. Which of the following best describes a ‘scheduled formulation’ under DPCO?
- A formulation exempt from price regulation
- A formulation included in the DPCO schedule subject to price control
- An investigational new drug under trial
- A veterinary medicine
Correct Answer: A formulation included in the DPCO schedule subject to price control
Q15. NPPA issues price fixation orders and also maintains an updated list of:
- Manufacturing licenses issued by states
- Ceiling prices of scheduled formulations
- Clinical trial investigators
- Hospital accreditation status
Correct Answer: Ceiling prices of scheduled formulations
Q16. Which statement about NPPA’s authority to revise prices is TRUE?
- NPPA can revise ceiling prices of scheduled formulations when justified
- NPPA cannot change any prices once fixed
- Only state governments can revise ceiling prices
- Price revision is solely decided by pharmaceutical companies
Correct Answer: NPPA can revise ceiling prices of scheduled formulations when justified
Q17. NPPA was created as which type of administrative unit?
- An independent private corporation
- An attached office of the Department of Pharmaceuticals
- A statutory tribunal created by Parliament
- A state government department
Correct Answer: An attached office of the Department of Pharmaceuticals
Q18. When computing the ceiling price under DPCO, NPPA typically excludes which brands from the average?
- Brands with market share greater than 1%
- Brands with market share less than or equal to 1%
- All generic brands
- All multinational brands
Correct Answer: Brands with market share less than or equal to 1%
Q19. Which action is part of NPPA’s enforcement mechanism for non‑compliance?
- Issuing show‑cause notices and ordering recovery
- Conducting clinical efficacy trials
- Providing manufacturing subsidies
- Registering new trademarks
Correct Answer: Issuing show‑cause notices and ordering recovery
Q20. NPPA’s role in ensuring availability of essential medicines includes:
- Direct distribution of medicines to pharmacies nationwide
- Monitoring shortages, recommending allocation and advising policy measures
- Running commercial pharmacies for low‑income patients
- Approving pharmaceutical advertisements
Correct Answer: Monitoring shortages, recommending allocation and advising policy measures
Q21. Which data source is most relevant for NPPA when determining market share for price calculations?
- Clinical trial registries
- Market sales and volume data from manufacturers and market research
- Hospital bed occupancy rates
- Import tariff notifications
Correct Answer: Market sales and volume data from manufacturers and market research
Q22. NPPA’s decision to include a drug under price control is based primarily on:
- Its popularity on social media
- Whether it is an essential medicine and affordability concerns
- Company annual turnover alone
- Manufacturing location
Correct Answer: Whether it is an essential medicine and affordability concerns
Q23. Which of the following is a likely consequence when NPPA finds overcharging by a manufacturer?
- Manufacturer receives an award
- NPPA orders refund/recovery and interest for excess amount charged
- NPPA takes over company management
- Company gains automatic price‑control exemption
Correct Answer: NPPA orders refund/recovery and interest for excess amount charged
Q24. NPPA may coordinate with which organization for technical or regulatory inputs related to drug quality or approvals?
- Central Drugs Standard Control Organization (CDSCO)
- National Highway Authority
- Indian Space Research Organisation
- Press Information Bureau
Correct Answer: Central Drugs Standard Control Organization (CDSCO)
Q25. Which objective best captures the mission of NPPA?
- Maximize industry profits
- Ensure availability and accessibility of medicines at reasonable prices
- Ban imports of all pharmaceuticals
- Promote only branded drugs
Correct Answer: Ensure availability and accessibility of medicines at reasonable prices
Q26. Which of the following procedures is followed before NPPA finalizes a recovery order for overcharging?
- Immediate public auction of products
- Issuance of show‑cause notice and an opportunity for company to respond
- Automatic imprisonment of executives
- No procedure; NPPA acts without notice
Correct Answer: Issuance of show‑cause notice and an opportunity for company to respond
Q27. NPPA’s ceiling price orders are most relevant to which of the following stakeholders?
- Students only
- Manufacturers, retailers, prescribers and patients
- Only foreign regulators
- Telecommunications companies
Correct Answer: Manufacturers, retailers, prescribers and patients
Q28. Which of these activities would NPPA most likely perform to prevent unjustified price hikes?
- Monthly clinical audits of hospitals
- Regular market price monitoring and investigating sudden price increases
- Issuing drug manufacturing licenses
- Setting retail store hours for pharmacies
Correct Answer: Regular market price monitoring and investigating sudden price increases
Q29. NPPA can recommend inclusion of a medicine under DPCO based on:
- Therapeutic importance and need to protect public health affordability
- Company’s request to increase price
- Celebrity endorsements
- Packaging color
Correct Answer: Therapeutic importance and need to protect public health affordability
Q30. Which statement best describes NPPA’s overall impact on the pharmaceutical sector?
- It replaces clinical regulators and approves quality
- It regulates prices to balance industry viability and public access to medicines
- It eliminates all branded medicines
- It focuses only on export promotion
Correct Answer: It regulates prices to balance industry viability and public access to medicines
I am a Registered Pharmacist under the Pharmacy Act, 1948, and the founder of PharmacyFreak.com. I hold a Bachelor of Pharmacy degree from Rungta College of Pharmaceutical Science and Research. With a strong academic foundation and practical knowledge, I am committed to providing accurate, easy-to-understand content to support pharmacy students and professionals. My aim is to make complex pharmaceutical concepts accessible and useful for real-world application.
Mail- Sachin@pharmacyfreak.com