what do you mean "by passing in the password" like in a control like a password text box?
There are lots of pdf libraries out that can be leveraged, if you dont have a pdf library right now to handel your encrypting and decrypting needs, Check docotic pdf it should give you what you need.
Since your application needs to decrypt the file prior to serving it, you will need to add a linkbutton so that you can implement the onclick event to handle decryption and writing to the repsonse stream.
Since you have not given any details about the encrypted file i'll show you how to implement response writing in the click event.
protected void LinkButton1_Click(object sender, EventArgs e)
// code for you pdf work here
// now write pdf data to the response stream
Response.Headers["Content-Type"] = "application/pdf";
Response.Headers["Content-Length"] = pdfData.Length;