Current based PRELIMS QUESTION 30 July 2020

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1. Consider the following statements with reference to the National Pharmaceutical Pricing Authority (NPPA).
1. It was constituted vide Government of India Resolution in 1997 as an attached office under Ministry of Chemicals & Fertilizers.
2. It acts as an independent Regulator for pricing of drugs and to ensure availability and accessibility of medicines at affordable prices.
Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer-c
Explanation
National Pharmaceutical Pricing Authority (NPPA)
National Pharmaceutical Pricing Authority (NPPA) was established on 29th August 1997 as an independent body of experts as per the decision taken by the Cabinet committee in September 1994 while reviewing Drug Policy.
The Authority, interalia, has been entrusted with the task of fixation/revision of prices of pharmaceutical products (bulk drugs and formulations), enforcement of provisions of the Drugs (Prices Control) Order and monitoring of the prices of controlled and decontrolled drugs in the country.
Functions & Responsibilities
1. To implement and enforce the provisions of the Drugs (Prices Control) Order in accordance with the powers delegated to it.
2. To deal with all legal matters arising out of the decisions of the Authority.
3. To monitor the availability of drugs, identify shortages, if any, and to take remedial steps.
4. To collect/ maintain data on production, exports and imports, market share of individual companies, profitability of companies etc, for bulk drugs and formulations.
5. To undertake and/ or sponsor relevant studies in respect of pricing of drugs/ pharmaceuticals.
6. To recruit/ appoint the officers and other staff members of the Authority, as per rules and procedures lay down by the Government.

7. To render advice to the Central Government on changes/ revisions in the drug policy.
8. To render assistance to the Central Government in the parliamentary matters relating to the drug pricing.
http://www.nppaindia.nic.in/en/about-us/about-nppa/

2. Consider the following statements regarding the OPEC-Plus Arrangement.
1. OPEC+ refers to the alliance of crude producers, who have been undertaking corrections in supply in the oil markets since 2017.
2. OPEC+ countries include various countries including Russia and USA.
3. The deal represents the successful policy effort by the 24 member, informally referred to as the Vienna Group or OPEC+.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer-c
Explanation
OPEC-Plus Arrangement
A three-year pact between OPEC and Russia ended in acrimony recently after Moscow refused to support deeper oil cuts to cope with the outbreak of the coronavirus and OPEC responded by removing all limits on its own production.
OPEC-Plus refers to the alliance of crude producers, who have been undertaking corrections in supply in the oil markets since 2017.
OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.
The OPEC and Non- OPEC producers first formed the alliance at a historic meeting in Algiers in 2016.
The aim was to undertake production restrictions to help resuscitate a flailing market.
The deal represents the latest successful policy effort by the 24 member super cartel, informally referred to as the ‘Vienna Group’ or ‘OPEC+,’ to put their thumb on the scale of global oil markets.
OPEC+ is a group of 24 oil-producing nations, made up of the 14 members of the Organization of Petroleum Exporting Countries (OPEC), and 10 other non-OPEC members, including Russia.
https://www.forbes.com/sites/arielcohen/2018/06/29/opec-is-dead-long-live-opec/#6798f45a2217

3. Consider the following statements regarding the Price Monitoring & Resource Unit (PMRU).
1. It will be setup by the National Pharmaceutical Pricing Authority (NPPA) and each unit will be function under the direct supervision of the concerned Sate Drug Controller.
2. PMRU will also collect samples of medicines, collect and analyse data and make reports with respect to availability and over-pricing of medicines.
3. The major objective of the PMRUs is to provide necessary technical assistance to the State Drug Controllers and NPPA.
Which of the statement(s) given above is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer-d
Explanation
Price Monitoring & Resource Unit (PMRU)
The National Pharmaceutical Pricing Authority (NPPA) has started setting up long awaited price monitoring and research units (PMRUs) at the State and Union Territory levels to ensure Monitoring the notified prices of medicines, detection of violation of the provisions of DPCO (revised from time to time), pricing compliance and ensuring availability of medicines and other objectives as the first price monitoring and research units (PMRUs) has been established by NPPA in Kerala in collaboration with State Drug Controller, Kerala.
NPPA had announced the Draft Central Sector Scheme of assistance for setting up Price monitoring and resource units (PMRUs) at the states/ union territories in 2015.
Accordingly, it is proposed to initiate a Central Sector Scheme of Assistance for setting up Price Monitoring and Resource Units (PMRUs) at the States/ UTs which would provide all necessary support to the State Drug Controllers and NPPA. Each Unit will function under the direct supervision of the concerned State Drug Controller.
PMRUs will be key collaborating partners of NPPA with information gathering mechanism at the grassroots level.
PMRUs will also ensure that the benefits of the DPCO (revised from time to time) trickles down at the grassroots level.
The Central funding will be for an initial period of 5 (five) years subject to a mid-term review after 12th Plan period.
Objective of setting up the PMRUs:
The objectives of setting up the PMRUs are to provide necessary technical assistance to the State Drug Controllers and NPPA towards:
Monitoring the notified prices of medicines, detection of violation of the provisions of DPCO (revised from time to time), pricing compliance and ensuring availability of medicines; Monitoring the price movement of scheduled and non-scheduled formulations based on periodical returns filed by the industry, revision of price of scheduled formulations by the manufacturer based on the annual increase in Wholesale Price Index (WPI) as per provisions contained in the DPCO, oversee the price of non-scheduled formulations so that the prices of such formulations are not increased beyond 10% annually;
Collection and compilation of market based data of scheduled as well as non-scheduled formulations and analyse them. Collect test samples of medicines at the retailed market whenever required;
Conduct training, seminars and workshops at the State and District levels for consumer awareness and publicity covering aspects relating to the role and functions of NPPA, availability of scheduled and non-scheduled medicines at reasonable prices and care to be taken while purchasing the medicines from the chemists/ retailers and availability of alternative cheaper medicines . The resource persons for the training will be provided by the State Drug Controller and by the NPPA, whenever required; and
Any other related works as assigned to them by the NPPA from time to time.
For the purpose of staffing and providing the required infrastructure to the PMRU, States/ UTs have been proposed to be categorised into the following three categories:
Category I – States/ UTs having population of more than 3% of total population;
Category II – States/ UTs having population of less than 3% but more than 1% of total population; and
Category III – States/ UTs having population of less than 1% of total population.
With the implementation of PMRU scheme, Kerala will have a dedicated team to monitor price movements and so on other states who will establish price monitoring and research units (PMRUs) in the time to come.
http://www.dpco2013.com/files/news_event/whatsnew//8331547528481.pdf

4. Consider the following statements with reference to the International Energy Agency (IEA).
1. This first oil shock led to the creation of the IEA in 1974 with a broad mandate on energy security and energy policy co-operation.
2. The IEA is an autonomous inter-governmental organisation within the OECD framework, headed by its Executive Director.
3. The IEA works with governments and industry to shape a secure and sustainable energy future for all.
4. The World Energy Outlook (WEO) provides critical analysis and insights on trends in energy demand and supply, has been an annual publication since 1998 by the IEA.
Which of the statement(s) given above is/are correct?
(a) 1, 2 and 4 only
(b) 2, 3 and 4 only
(c) 1, 3 and 4 only
(d) All of the above
Answer-d
Explanation-
International Energy Agency (IEA)
The IEA was born with the 1973-1974 oil crisis, when industrialised countries found they were not adequately equipped to deal with the oil embargo imposed by major producers that pushed prices to historically high levels.
This first oil shock led to the creation of the IEA in November 1974 with a broad mandate on energy security and energy policy co-operation. This included setting up a collective action mechanism to respond effectively to potential disruptions in oil supply.
The framework was anchored in the IEA treaty called the “Agreement on an International Energy Program,” with newly created autonomous Agency hosted at the OECD in Paris.
The IEA was established as the main international forum for energy co-operation on a variety of issues such as security of supply, long-term policy, information transparency, energy efficiency, sustainability, research and development, technology collaboration, and international energy relations.
The IEA’s founding members were Austria, Belgium, Canada, Denmark, Germany, Ireland, Italy, Japan, Luxembourg, The Netherlands, Norway (under a special Agreement), Spain, Sweden, Switzerland, Turkey, United Kingdom, and the United States. They were followed by Greece (1976), New Zealand (1977), Australia (1979), Portugal (1981), Finland (1992), France (1992), Hungary (1997), Czech Republic (2001), Republic of Korea (2002), Slovak Republic (2007), Poland (2008), Estonia (2014), and Mexico (2018).
The IEA’s collective emergency response system mechanism ensures a stabilizing influence on markets and the global economy. It was activated three times since the Agency’s creation. The first was in January 1991, during the First Gulf War. The second was in 2005, after the hurricanes Katrina and Rita damaged oil infrastructure in the Gulf of Mexico. The third was in 2011, during the Libyan crisis.
While energy security remains a core mission, the IEA has evolved over the years, adapting to the transformation of the global energy system. Today, the IEA is at the heart of global dialogue on energy, providing authoritative statistics and analysis and examining the full spectrum of energy issues, advocating policies that will enhance the reliability, affordability and sustainability of energy in its 30 member’s countries and beyond.
In 2015, the IEA’s Ministerial Meeting approved a new modernization strategy presented by the Agency’s to strengthen the Agency’s role as an authoritative voice on global energy policy.
The modernization of the IEA was structured under three pillars: strengthening and broadening the IEA’s commitment to energy security beyond oil, to natural gas and electricity; deepening the IEA’s engagement with major emerging economies; and providing a greater focus on clean energy technology, including energy efficiency.
The Agency’s successful “open door” policy allowed the IEA to deepen its collaboration with eight new countries through the Association programme: Brazil, China, India, Indonesia, Morocco, Thailand, Singapore, and South Africa. The IEA family now represents about 75% of global energy consumption, up from 40% in 2015.
The IEA has had seven Executive Directors since its creation.
A candidate country to the IEA must be a member country of the OECD. In addition, it must demonstrate several requirements. These are:
• Crude oil and/or product reserves equivalent to 90 days of the previous year’s net imports, to which the government has immediate access (even if it does not own them directly) and could be used to address disruptions to global oil supply;
• A demand restraint programme to reduce national oil consumption by up to 10%;
• Legislation and organisation to operate the Co-ordinated Emergency Response Measures (CERM) on a national basis;
• Legislation and measures to ensure that all oil companies under its jurisdiction report information upon request;
• Measures in place to ensure the capability of contributing its share of an IEA collective action. An IEA collective action would be initiated in response to a significant global oil supply disruption and would involve IEA Member Countries making additional volumes of crude and/or product available to the global market (either through increasing supply or reducing demand), with each country’s share based on national consumption as part of the IEA total oil consumption.
The IEA Executive Director must make a finding to ascertain whether a potential member country can meet these requirements, during which the IEA Secretariat advises and works with the candidate country to advance the accession process. The IEA Governing Board makes the final decision on a country’s membership.
The IEA is an autonomous inter-governmental organisation within the OECD framework, headed by its Executive Director.
The Governing Board is the main decision-making body of the IEA, composed of energy ministers or their senior representatives from each member country.
Through the IEA Ministerial Meeting that takes place every two years, the IEA Secretariat develops ideas for existing or new work programmes, which are then discussed with member countries in various IEA committees and ultimately presented to the Governing Board for approval.
In addition to the Governing Board, the IEA has several Standing Groups, Committees and Working Parties made up of member country government officials that meet several times a year.
The Governing Board is the main decision-making body of the IEA. It is composed of energy ministers or their senior representatives from each Member country.
The IEA works with governments and industry to shape a secure and sustainable energy future for all.
World Energy Outlook (WEO)
Published every year based on objective data and dispassionate analysis, The World Energy Outlook (WEO) provides critical analysis and insights on trends in energy demand and supply, and what they mean for energy security, environmental protection and economic development.
The first WEO was published in 1977 and it has been an annual publication since 1998. The detailed projections are generated by the World Energy Model, a large-scale simulation tool, developed at the IEA over a period of more than 20 years that is designed to replicate how energy markets function. It covers the whole energy system, allowing for a range of analytical perspectives from global aggregates to elements of detail, such as the prospects for a particular technology or the outlook for end-user prices in a specific country or region.
https://www.iea.org/about

5. Consider the following statements regarding the Medical Devices notified as Drugs.
1. The Government is regulating 24 class of medical devices which have been regulated as drugs under Drugs & Cosmetics Act, 1940 and Drugs & Cosmetics Rules, 1945.
2. This will ensure that no manufacturer/importer increases the MRP of a drug more than Ten percent of MRP during preceding twelve month.
3. The manufacturer/importer shall also be liable to deposit the overcharged amount along with interest thereon from the date of increase in price in addition to penalty.
Which of the following statements is/are correct?
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer-d
Explanation-
The Government is regulating 24 class of medical devices which have been notified/regulated as drugs under Drugs & Cosmetics Act, 1940 and Drugs & Cosmetics Rules, 1945.
Of the above, 4 medical devices viz. (i) Cardiac Stents (ii) Drug Eluting Stents (iii) Condoms and (iv) Intra Uterine Device (Cu-T) are scheduled medical devices for which ceiling prices have been fixed.
These 4 medical devices are under price control. As regard remaining non-scheduled medical devices which are notified/regulated as drugs, NPPA is currently monitoring Maximum Retail Prices (MRPs) under Para 20 of the DPCO, 2013 to ensure that no manufacturer/importers can increase the price more than ten percent in preceding twelve months.
The NPPA vide Notification dated 31st March, 2020 in pursuance of Notification No. SO 648(E), dated 11th February, 2020, stated that all medical devices shall be governed under the provisions of the Drugs (Prices Control) Order, 2013 (DPCO, 2013) w.e.f. 1st April 2020.
Thus, with effect from 1st April, 2020, all Medical Devices shall be regulated by the Government as Drugs for quality control and price monitoring. Therefore, the Maximum Retail Prices (MPRs) of all the Medical Devices would be monitored by the Government under the provisions of Para 20(1) of the DPCO, 2013 to ensure that no manufacturer/importer increases the MRP of a drug more than ten percent of MRP during preceding twelve month and where the increase is beyond ten percent of maximum retail price, it shall reduce the same to the level of ten percent of maximum retail price for next twelve months.
Further, as per Para 20(2) of the DPCO, 2013 read with the Essential Commodities Act, 1955, the manufacturer/importer shall also be liable to deposit the overcharged amount along with interest thereon from the date of increase in price in addition to penalty.
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1609670