Ceiling price of scheduled formulations is a vital topic for B.Pharm students studying pharmaceutical regulation and drug pricing policy. This introduction explains how the National Pharmaceutical Pricing Authority (NPPA) and the Drug Price Control Order (DPCO) govern ceiling prices for medicines listed under the National List of Essential Medicines (NLEM). Understanding terms like ceiling price, scheduled formulations, MRP, price-to-retailer (PTR), price monitoring, and compliance is essential for pharmacists, regulatory affairs professionals, and quality assurance. Mastery of calculation methods, legal provisions, and enforcement actions helps ensure patient access and industry conformity. Now let’s test your knowledge with 30 MCQs on this topic.
Q1. What is a “scheduled formulation” under DPCO?
- A medicine listed in the National List of Essential Medicines which is subject to price control
- A formulation scheduled for clinical trials by regulatory agencies
- A drug reserved for hospital use only
- A formulation exempt from all price regulations
Correct Answer: A medicine listed in the National List of Essential Medicines which is subject to price control
Q2. Which authority is primarily responsible for fixing ceiling prices of scheduled formulations in India?
- Central Drugs Standard Control Organization (CDSCO)
- National Pharmaceutical Pricing Authority (NPPA)
- Ministry of Health and Family Welfare
- Pharmacy Council of India
Correct Answer: National Pharmaceutical Pricing Authority (NPPA)
Q3. Under which legal instrument are scheduled formulations regulated with ceiling prices?
- Drugs and Cosmetics Act, 1940
- Drug Price Control Order (DPCO), 2013
- Pharmacy Act, 1948
- Essential Commodities Act, 1955
Correct Answer: Drug Price Control Order (DPCO), 2013
Q4. What is the main objective of fixing a ceiling price for a scheduled formulation?
- To promote export of medicines
- To ensure affordable access to essential medicines for the public
- To subsidize pharmaceutical manufacturers
- To restrict rural distribution of drugs
Correct Answer: To ensure affordable access to essential medicines for the public
Q5. Which list is used to identify medicines considered as scheduled formulations?
- National List of Essential Medicines (NLEM)
- Formulary of India
- Indian Pharmacopoeia
- WHO Essential Medicines List only
Correct Answer: National List of Essential Medicines (NLEM)
Q6. Which price terminology refers to the price printed on the pack and payable by the consumer?
- Price to Retailer (PTR)
- Wholesale Price
- Maximum Retail Price (MRP)
- Ceiling Price
Correct Answer: Maximum Retail Price (MRP)
Q7. Which of the following best describes “ceiling price” for a scheduled formulation?
- The minimum price retailers must charge
- The maximum price at which the product can be sold in the market
- The average production cost of the drug
- The export price of the formulation
Correct Answer: The maximum price at which the product can be sold in the market
Q8. Which of these statements is true regarding sale at prices lower than the ceiling price?
- Manufacturers are prohibited from selling below the ceiling price
- Sales below the ceiling price are allowed and can improve affordability
- Retailers must always sell exactly at ceiling price
- Sales below ceiling price require NPPA approval
Correct Answer: Sales below the ceiling price are allowed and can improve affordability
Q9. Which data point is commonly used in computing ceiling prices (method dependent)?
- Price-to-retailer (PTR) or consumer price data from market surveys
- Only the manufacturer’s production cost
- International reference price only
- Packaging cost alone
Correct Answer: Price-to-retailer (PTR) or consumer price data from market surveys
Q10. For calculation practice: If NPPA uses a simple average and the PTRs of five brands of the same pack are 10, 12, 14, 16 and 18 INR, what is the ceiling price?
- 12 INR
- 14 INR
- 15 INR
- 16 INR
Correct Answer: 14 INR
Q11. Scheduled formulations pricing typically focuses on which of the following to ensure comparability?
- Price per active unit (e.g., per tablet or per ml)
- Price of manufacturing plant
- Distributor contract terms
- National GDP
Correct Answer: Price per active unit (e.g., per tablet or per ml)
Q12. Who can file a complaint to NPPA about alleged overpricing of a scheduled formulation?
- Only state drug controllers
- Any consumer, pharmacist, competitor or association
- Only the manufacturer itself
- Only international agencies
Correct Answer: Any consumer, pharmacist, competitor or association
Q13. Which action can NPPA take if a company sells above the ceiling price?
- Issue showcause notice, recover overcharged amount and impose penalties
- Automatically deregister the drug from market
- Grant a tax exemption to the company
- Transfer the product license to another company
Correct Answer: Issue showcause notice, recover overcharged amount and impose penalties
Q14. What is the difference between scheduled and non-scheduled formulations?
- Scheduled formulations are price-controlled; non-scheduled are market-driven
- Non-scheduled formulations are illegal
- Scheduled formulations cannot be sold in pharmacies
- There is no regulatory difference
Correct Answer: Scheduled formulations are price-controlled; non-scheduled are market-driven
Q15. Which of the following is an important consideration when calculating ceiling price across different pack sizes?
- Ignore pack-size differences and average MRPs directly
- Convert prices to a common unit basis (e.g., per tablet) before averaging
- Only include the largest pack available
- Use only manufacturer suggested retail price irrespective of pack size
Correct Answer: Convert prices to a common unit basis (e.g., per tablet) before averaging
Q16. Which document contains the official list of scheduled formulations subject to price control?
- Gazette notification of DPCO and the NLEM list
- WHO annual report
- Manufacturer internal price list
- State pharmacy council circular
Correct Answer: Gazette notification of DPCO and the NLEM list
Q17. In regulatory practice, “PTR” stands for which of the following?
- Price to Retailer
- Pharmacist Tax Return
- Patient Treatment Record
- Primary Trade Rate
Correct Answer: Price to Retailer
Q18. Which is true about the role of B.Pharm graduates regarding ceiling price compliance?
- They have no role in regulatory compliance
- They can work in regulatory affairs, monitor pricing and ensure industry compliance
- They only focus on drug formulation without regard to pricing
- They can set ceiling prices independently
Correct Answer: They can work in regulatory affairs, monitor pricing and ensure industry compliance
Q19. If a company voluntarily reduces its MRP below the NPPA ceiling, what is the regulatory position?
- The reduction is illegal without NPPA approval
- The company may legally sell below the ceiling price
- Retailers must raise price to the ceiling
- The product becomes non-scheduled
Correct Answer: The company may legally sell below the ceiling price
Q20. Which of the following best helps NPPA detect overpricing in scheduled formulations?
- Market surveillance, consumer complaints and price data analysis
- Ignoring price monitoring and relying on self-reporting
- Only checking export invoices
- Allowing manufacturers to self-certify prices without oversight
Correct Answer: Market surveillance, consumer complaints and price data analysis
Q21. Practical calculation: If NPPA’s method (for this exercise) uses a weighted average by sales and brand A sells 1000 units at PTR 5 INR, brand B sells 2000 units at PTR 7 INR, what is the weighted average PTR?
- 6.5 INR
- 6.0 INR
- 5.5 INR
- 7.0 INR
Correct Answer: 6.5 INR
Q22. Why is it important to convert pack prices to unit prices when comparing formulations?
- To adjust for differences in active ingredient potency only
- To ensure fair comparison across different strengths and pack sizes
- To manipulate data for marketing purposes
- It is not important at all
Correct Answer: To ensure fair comparison across different strengths and pack sizes
Q23. Which of the following is NOT a typical outcome when NPPA finds overcharging?
- Recovery of overcharged amount from the company
- Imposition of penalties or fines
- Cancellation of drug registration by CDSCO directly
- Issuance of showcause notice and directives for compliance
Correct Answer: Cancellation of drug registration by CDSCO directly
Q24. True or False: Ceiling price applies uniformly across all states in India for a scheduled formulation.
- True
- False
- Applies only in some states by choice
- Applies only to exported units
Correct Answer: True
Q25. When computing ceiling price, selecting appropriate comparators requires matching which attributes?
- Therapeutic group, strength, dosage form and pack size
- Company logo color and marketing budget
- Only the brand name
- Only the country of manufacture
Correct Answer: Therapeutic group, strength, dosage form and pack size
Q26. Which stakeholder’s role is critical for accurate market price data used in ceiling price calculations?
- Pharmaceutical marketing teams only
- Market data providers, wholesalers, retailers and manufacturers
- Only patients
- Only international organizations
Correct Answer: Market data providers, wholesalers, retailers and manufacturers
Q27. Which factor can influence revision of ceiling prices after initial fixation?
- Changes in market prices and updated sales data
- Company’s internal branding strategy only
- Color of packaging
- Retailer location alone
Correct Answer: Changes in market prices and updated sales data
Q28. Which of the following is a true statement about MRP and taxes?
- MRP is exclusive of GST
- MRP is inclusive of all taxes such as GST
- MRP only includes manufacturing cost
- MRP is set after consumer buys the product
Correct Answer: MRP is inclusive of all taxes such as GST
Q29. If two brands have identical composition and pack size but one has higher PTR, what is the likely effect on ceiling price computed by averaging?
- The ceiling price will be unaffected by the high PTR
- The ceiling price will increase due to the higher PTR
- The ceiling price will always equal the lower PTR
- The ceiling price will be set equal to production cost
Correct Answer: The ceiling price will increase due to the higher PTR
Q30. Why should B.Pharm students study ceiling price regulation of scheduled formulations?
- To design packaging only
- To understand how pricing policies affect access, ethics, and regulatory compliance in pharmacy practice
- So they can independently fix market prices
- To avoid learning about pharmacoeconomics
Correct Answer: To understand how pricing policies affect access, ethics, and regulatory compliance in pharmacy practice
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