Pharmaceutical market structure and dynamics MCQs With Answer

Understanding pharmaceutical market structure and dynamics is essential for B. Pharm students aiming for careers in industry, regulation, or community practice. This topic examines market structure types (perfect competition, monopoly, oligopoly, monopolistic competition), market dynamics such as pricing strategies, patent life-cycle and generic entry, regulatory frameworks, reimbursement and Health Technology Assessment (HTA), supply chain and distribution, and competition and market access. Familiarity with pricing, market analysis, demand-supply forces, patent protection, and policy impacts enables better evaluation of drug launch strategies, lifecycle management, and public health outcomes. Now let’s test your knowledge with 30 MCQs on this topic.

Q1. Which market structure is most characteristic of the pharmaceutical industry for patented medicines?

• Perfect competition
• Monopoly
• Oligopoly
• Monopolistic competition

Correct Answer: Oligopoly

Q2. What is the primary direct trigger that allows generic manufacturers to enter a drug market?

• Regulatory price controls
• Patent expiry
• Reimbursement denials
• Supply chain consolidation

Correct Answer: Patent expiry

Q3. Which pricing strategy sets a high launch price and reduces it later as competition grows?

• Penetration pricing
• Price skimming
• Cost-plus pricing
• Value-based pricing

Correct Answer: Price skimming

Q4. What does HTA commonly stand for in pharmaceutical market access?

• Health Technology Assessment
• Hospital Therapeutic Authorization
• High-cost Treatment Agreement
• Healthcare Tariff Analysis

Correct Answer: Health Technology Assessment

Q5. Which reimbursement mechanism pays a fixed amount per patient per period regardless of services used?

• Fee-for-service
• Diagnosis-related group (DRG)
• Capitation
• Bundled payment

Correct Answer: Capitation

Q6. Which index is commonly used to measure market concentration in industry analysis?

• Gini coefficient
• Herfindahl-Hirschman Index
• Consumer Price Index
• Market Growth Rate

Correct Answer: Herfindahl-Hirschman Index

Q7. Which policy enables pharmacists to dispense a therapeutically equivalent generic instead of the branded drug prescribed?

• Reference pricing
• Generic substitution policy
• Price-volume agreement
• Compulsory licensing

Correct Answer: Generic substitution policy

Q8. What is international reference pricing?

• Setting domestic drug prices based on a basket of prices in other countries
• Benchmarking prices against local generic equivalents
• Negotiating prices only with domestic manufacturers
• Applying a uniform global price set by WHO

Correct Answer: Setting domestic drug prices based on a basket of prices in other countries

Q9. What is the standard maximum patent term for pharmaceuticals from filing in most jurisdictions?

• 10 years
• 15 years
• 20 years
• 25 years

Correct Answer: 20 years

Q10. What key evidence do regulators require to approve an oral generic product as a substitute for a reference drug?

• Higher clinical efficacy studies
• Bioequivalence demonstration
• Large phase III trials
• Long-term safety cohort studies

Correct Answer: Bioequivalence demonstration

Q11. Which factor is the greatest barrier to entry for new firms in the pharmaceutical market?

• Low manufacturing costs
• High research and development costs
• Abundant skilled labor
• Simple regulatory requirements

Correct Answer: High research and development costs

Q12. Which competitive behavior is commonly used by pharmaceutical firms in an oligopoly besides price changes?

• Non-price competition such as marketing and promotion
• Open price collusion
• Eliminating competitors by acquisition only
• Producing identical commodities with no differentiation

Correct Answer: Non-price competition such as marketing and promotion

Q13. How is price elasticity of demand typically characterized for essential, life-saving medicines?

• Elastic
• Inelastic
• Unit elastic
• Perfectly elastic

Correct Answer: Inelastic

Q14. Which example best illustrates vertical integration in the pharmaceutical supply chain?

• A wholesaler acquiring a retail pharmacy
• A regulator issuing new guidelines
• A pharmacy expanding its counseling services
• Patient advocacy groups lobbying for access

Correct Answer: A wholesaler acquiring a retail pharmacy

Q15. Which entity holds legal responsibility for a marketed medicinal product’s quality and safety?

• Clinical trial sponsor
• Marketing Authorization Holder (MAH)
• Contract manufacturer
• Wholesale distributor

Correct Answer: Marketing Authorization Holder (MAH)

Q16. What is ‘patent evergreening’ in pharmaceutical markets?

• Compulsory licensing to generic firms
• Making incremental modifications to extend exclusivity
• Selling off patent rights to competitors
• Reducing prices before patent expiry

Correct Answer: Making incremental modifications to extend exclusivity

Q17. What primary role do community pharmacies play in pharmaceutical market dynamics?

• Drug discovery and clinical trials
• Final distribution channel and patient counseling
• Setting national reimbursement policy
• Manufacturing active pharmaceutical ingredients

Correct Answer: Final distribution channel and patient counseling

Q18. What pricing control directly sets a maximum price that can be charged for a medicine?

• Price floor
• Price ceiling
• Reference pricing
• Profit-sharing

Correct Answer: Price ceiling

Q19. Which demographic trend is a major long-term driver of pharmaceutical demand?

• Aging population
• Declining literacy rates
• Reduced urbanization
• Flattening population growth in children only

Correct Answer: Aging population

Q20. Which feature best describes monopolistic competition in pharmaceuticals?

• Single producer with unique product
• Many firms selling differentiated products
• Perfectly identical products sold by many firms
• Two or three firms dominating the market

Correct Answer: Many firms selling differentiated products

Q21. Which sequence correctly represents the typical drug product life cycle?

• Growth, introduction, maturity, decline
• Introduction, growth, maturity, decline
• Maturity, introduction, growth, decline
• Decline, maturity, growth, introduction

Correct Answer: Introduction, growth, maturity, decline

Q22. What does ‘parallel import’ mean in pharmaceutical trade?

• Importing an identical product from a country where it is cheaper
• Importing generic drugs without approval
• Importing raw materials only for local manufacturing
• Importing counterfeit medicines through third parties

Correct Answer: Importing an identical product from a country where it is cheaper

Q23. Which branch of study compares costs and outcomes of alternative pharmaceutical therapies?

• Pharmacovigilance
• Pharmacoeconomics
• Clinical pharmacology
• Pharmacogenomics

Correct Answer: Pharmacoeconomics

Q24. What is the main objective of competitive tendering in public drug procurement?

• Avoiding multiple suppliers
• Obtaining the lowest possible price through bidding
• Prioritizing local manufacturers regardless of price
• Increasing administrative complexity

Correct Answer: Obtaining the lowest possible price through bidding

Q25. What core function do pharmaceutical wholesalers perform in the market?

• Conducting clinical trials
• Distribution and inventory management
• Developing regulatory policy
• Direct price negotiation with patients

Correct Answer: Distribution and inventory management

Q26. Which is a common basis for market segmentation in pharmaceuticals?

• Therapeutic class or indication
• Manufacturer headquarters location only
• Packaging color alone
• Storage temperature exclusively

Correct Answer: Therapeutic class or indication

Q27. Which scenario best exemplifies price discrimination in pharmaceutical markets?

• Charging hospitals a lower price than retail pharmacies
• Charging the same uniform price to all buyers
• Reducing price only after patent expiry
• Setting prices based solely on manufacturing costs

Correct Answer: Charging hospitals a lower price than retail pharmacies

Q28. Which body is the national drug regulator in India responsible for approval of new drugs?

• FDA
• European Medicines Agency (EMA)
• Central Drugs Standard Control Organization (CDSCO)
• National Institute of Health (NIH)

Correct Answer: Central Drugs Standard Control Organization (CDSCO)

Q29. What term describes a sudden reduction in pharmaceutical supply due to manufacturing or distribution disruption?

• Demand shock
• Supply shock
• Market correction
• Price elasticity shift

Correct Answer: Supply shock

Q30. Why do regulators grant market exclusivity for orphan drugs?

• To penalize manufacturers for high prices
• To incentivize development of drugs for rare diseases by granting exclusive marketing rights
• To ensure immediate generic competition
• To extend patent life indefinitely

Correct Answer: To incentivize development of drugs for rare diseases by granting exclusive marketing rights

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