Introduction: The National Pharmaceutical Pricing Authority (NPPA) is the statutory body responsible for drug price regulation and monitoring in India. NPPA implements the Drug Price Control Order (DPCO), fixes ceiling prices for scheduled formulations, monitors market prices, and ensures affordability and availability of essential medicines. Key functions include price fixation, enforcement against overcharging, periodic price reviews, and maintaining the national ceiling price list. Understanding NPPA’s role, powers, and mechanisms—such as scheduled vs non‑scheduled drugs, ceiling price computation, and regulatory coordination—is essential for B.Pharm students preparing for careers in pharmaceutical regulation, policy, and industry compliance. Now let’s test your knowledge with 30 MCQs on this topic.
Q1. What is the primary role of the National Pharmaceutical Pricing Authority (NPPA)?
- To regulate drug prices and ensure availability and affordability of medicines
- To approve new drug applications and clinical trials
- To manufacture essential medicines for government hospitals
- To provide medical education and training
Correct Answer: To regulate drug prices and ensure availability and affordability of medicines
Q2. In which year was the NPPA constituted?
- 1985
- 1997
- 2005
- 2013
Correct Answer: 1997
Q3. Under which Ministry does NPPA function?
- Ministry of Health and Family Welfare
- Ministry of Commerce and Industry
- Ministry of Chemicals and Fertilizers
- Ministry of Finance
Correct Answer: Ministry of Chemicals and Fertilizers
Q4. Which legal instrument does NPPA implement to control medicine prices?
- Drugs and Cosmetics Act
- Drug Price Control Order (DPCO)
- Medical Devices Rules
- Essential Commodities Act only
Correct Answer: Drug Price Control Order (DPCO)
Q5. What are “scheduled formulations” under the DPCO?
- Drugs listed under the schedule of DPCO for price control
- All over‑the‑counter (OTC) medicines
- Only vaccines and biologics
- Drugs that are entirely exempt from price regulation
Correct Answer: Drugs listed under the schedule of DPCO for price control
Q6. Under DPCO 2013, ceiling price for a scheduled formulation is generally calculated using which method?
- Average of maximum retail prices of all brands
- Simple average of prices of brands having market share of 1% or more
- The highest price among manufacturers
- Cost plus fixed margin irrespective of market data
Correct Answer: Simple average of prices of brands having market share of 1% or more
Q7. Which of the following is a core objective of NPPA?
- Promote exports of patented drugs
- Ensure reasonable prices of medicines for the public
- License new pharmaceutical companies
- Conduct quality testing of all drugs
Correct Answer: Ensure reasonable prices of medicines for the public
Q8. Which authority primarily implements and enforces price orders under DPCO?
- Central Drugs Standard Control Organization (CDSCO)
- State Drug Controllers
- National Pharmaceutical Pricing Authority (NPPA)
- Pharmaceutical Export Promotion Council
Correct Answer: National Pharmaceutical Pricing Authority (NPPA)
Q9. Which of the following functions is carried out by NPPA?
- Granting manufacturing licenses to drug companies
- Fixing and revising ceiling prices of scheduled formulations
- Approval of New Drug Applications (NDA)
- Conducting preclinical toxicology studies
Correct Answer: Fixing and revising ceiling prices of scheduled formulations
Q10. NPPA monitors market prices primarily to:
- Increase taxes on pharmaceutical companies
- Identify overcharging and enforce price compliance
- Promote higher prices to boost industry profits
- Approve advertising campaigns for drugs
Correct Answer: Identify overcharging and enforce price compliance
Q11. Which medicines are typically exempt from price control under DPCO?
- All essential medicines
- Non‑scheduled medicines and many new or patented drugs unless notified
- All generic medicines
- All over‑the‑counter analgesics
Correct Answer: Non‑scheduled medicines and many new or patented drugs unless notified
Q12. If a manufacturer sells a scheduled formulation above the ceiling price, NPPA can:
- Order recovery of the overcharged amount and direct refund to consumers or government institutions
- Immediately revoke the company’s manufacturing license
- Authorize unlimited penalties without process
- Force the company to merge with a government firm
Correct Answer: Order recovery of the overcharged amount and direct refund to consumers or government institutions
Q13. NPPA’s ceiling price list is intended to be used by:
- Manufacturers, wholesalers, retailers, and government purchasers
- Only foreign importers
- Only hospital pharmacies
- Only research laboratories
Correct Answer: Manufacturers, wholesalers, retailers, and government purchasers
Q14. Which metric does NPPA consider when assessing market share for ceiling price calculation?
- Volume or value market share data of individual brands
- Only the number of prescriptions written
- Employee count of manufacturers
- Advertising expenditure by the company
Correct Answer: Volume or value market share data of individual brands
Q15. NPPA coordinates with which agency for issues related to drug quality and safety?
- Central Drugs Standard Control Organization (CDSCO)
- Food Safety and Standards Authority of India (FSSAI)
- Indian Council of Medical Research (ICMR)
- National Institute of Nutrition (NIN)
Correct Answer: Central Drugs Standard Control Organization (CDSCO)
Q16. The term “scheduled formulation” implies price control applies to:
- A particular formulation (strength and dosage form) as notified under DPCO
- All formulations of a molecule regardless of strength
- Only injectable forms of a drug
- Only traditional Ayurvedic products
Correct Answer: A particular formulation (strength and dosage form) as notified under DPCO
Q17. Which of the following is NOT a typical function of NPPA?
- Price negotiation and fixation for scheduled drugs
- Monitoring prices and ensuring compliance
- Licensing pharmacists for practice
- Maintaining national price data and issuing price orders
Correct Answer: Licensing pharmacists for practice
Q18. How does NPPA help in ensuring access to essential medicines?
- By subsidizing all medicines directly
- By controlling prices of essential and scheduled formulations to make them affordable
- By producing generic medicines centrally
- By banning private pharmacies
Correct Answer: By controlling prices of essential and scheduled formulations to make them affordable
Q19. When a new formulation is added to the DPCO schedule, NPPA usually:
- Allows unlimited time for manufacturers to set price
- Fixes a ceiling price based on notified methodology and market data
- Automatically exempts it from price control
- Transfers responsibility to state governments
Correct Answer: Fixes a ceiling price based on notified methodology and market data
Q20. NPPA’s actions can directly influence which of the following in the pharmaceutical market?
- Medicine affordability and manufacturer pricing strategies
- Clinical trial design and patient recruitment
- Pharmacovigilance signal detection only
- Exclusive rights over drug patents
Correct Answer: Medicine affordability and manufacturer pricing strategies
Q21. Which stakeholders regularly interact with NPPA for price compliance and data submission?
- Manufacturers, importers, and trade associations
- Only patients and consumers
- Only academic researchers
- Only foreign governments
Correct Answer: Manufacturers, importers, and trade associations
Q22. What role does NPPA play regarding non‑scheduled drugs?
- It has no interest and never monitors non‑scheduled drugs
- It may monitor prices and intervene in cases of abnormal price rise even for non‑scheduled drugs
- It fixes retail margins for non‑scheduled drugs
- It manufactures non‑scheduled drugs centrally
Correct Answer: It may monitor prices and intervene in cases of abnormal price rise even for non‑scheduled drugs
Q23. Which document or data is essential for NPPA to calculate ceiling price accurately?
- Market price and market share data of brands
- Only the number of doctors in a state
- Manufacturer’s employee salaries
- Hospital bed counts across India
Correct Answer: Market price and market share data of brands
Q24. NPPA can issue a price order requiring manufacturers to:
- Reduce the price to the ceiling level and refund any overcharged amounts
- Change drug formulations arbitrarily
- Stop all exports permanently
- Switch to government ownership
Correct Answer: Reduce the price to the ceiling level and refund any overcharged amounts
Q25. Coordination between NPPA and state drug controllers is important for:
- Local enforcement, seizures, and preventing illegal overcharging at retail level
- Conducting international patent negotiations
- Setting university curricula for pharmacists
- Producing vaccines
Correct Answer: Local enforcement, seizures, and preventing illegal overcharging at retail level
Q26. In the context of NPPA, “ceiling price” means:
- The maximum price at which a scheduled formulation can be sold in the market
- The minimum export price mandated by government
- The wholesale purchase price only for government hospitals
- The price at which a drug must be manufactured
Correct Answer: The maximum price at which a scheduled formulation can be sold in the market
Q27. NPPA’s interventions are designed to balance which two broad objectives?
- Pharmaceutical profitability and advertising freedom
- Affordability for patients and fair returns for industry
- Complete price deregulation and unrestricted export
- Clinical trial speed and patent length
Correct Answer: Affordability for patients and fair returns for industry
Q28. Which of the following best describes NPPA’s authority to revise prices?
- NPPA cannot revise prices once fixed
- NPPA can revise ceiling prices based on updated market data and policy decisions
- Only the Supreme Court can revise medicine prices
- Prices are revised solely by pharmaceutical companies
Correct Answer: NPPA can revise ceiling prices based on updated market data and policy decisions
Q29. How does NPPA contribute to public health policy?
- By setting pricing policies that improve access to essential medicines and advising government on affordability issues
- By conducting hospital audits nationwide
- By directly managing public hospitals
- By licensing clinical laboratories
Correct Answer: By setting pricing policies that improve access to essential medicines and advising government on affordability issues
Q30. For a B.Pharm student, understanding NPPA is important because:
- It helps in regulatory affairs, ensuring compliance, and protecting patients from unjust pricing
- It guarantees jobs in manufacturing only
- It replaces the need to know pharmacology
- It is only relevant for medical doctors
Correct Answer: It helps in regulatory affairs, ensuring compliance, and protecting patients from unjust pricing
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