Prescription Drug Costs Breakdown

Advisor Portal, Health

Understanding the total cost of a prescription drug claims means learning the 3 main components:

1) Ingredient Cost

Actual cost the pharmacy pays the drug company or wholesaler to buy the drug.

2) Pharmacy Markup

Percentage charged to cover the expenses involved in running a pharmacy and a profit margin.

3) Dispensing Fee

Professional fee charged by the pharmacy to have licensed pharmacists dispense drugs, provide patient counselling, review medication records for safety and appropriateness and collaborate with physicians and other health care providers.

Pharmacies are free to set the markup and dispensing fee they charge, provided they do not exceed any legislated maximums. As a result, the cost of the same prescription drug can vary widely between pharmacies and even among pharmacies in the same chain.

For example:

Controlling Prescription Drug Costs

When you submit your prescription drug claim, we verify that the components fall within legislated, reasonable and customary dollar maximums established for the jurisdiction. Therefore, this helps protect your plan from unusually high costs. Any component that exceeds the maximum will be capped at the reasonable and customary amount, as a part of the adjudication process.

How can you help?

One of the components that varies widely from pharmacy to pharmacy is the dispensing fee. Unlike other purchases you may make, prescription drug prices are not readily available. So it is hard to compare prices from pharmacy to pharmacy or to research them online. Except for a few provinces, pharmacies are not required to outline their dispensing fee on the prescription receipt. This can make it difficult for patients to know what they’re paying.

A reasonable and customary dispensing fee* is the maximum dispensing fee The Co-operators will reimburse in each province or territory. Let’s have a closer look at how dispensing fee reasonable and customary maximums affect you.

*Reasonable and customary dispensing fees do not apply if you live in Québec.


The pharmacy’s dispensing fee is less than or equal to the reasonable and customary dispensing fee in your province or territory.


The pharmacy’s dispensing fee is more than the reasonable and customary dispensing fee in your province or territory.


Ask Questions:

Do your research and ask your pharmacy about its dispensing fee. Ask what services are included in the fee.

Shop Around:

Speak with pharmacies in your area to compare the cost of filling your prescriptions. Find the one that offers the best value in order to reduce or eliminate your out of pocket expenses.

Think Long Term:

Purchase a 100-day supply of medications you take on a regular and long-term basis, for example, medications used to treat high blood pressure or lower cholesterol levels. You’ll eliminate the dispensing fees associated with filling these prescriptions monthly and will make fewer trips to the pharmacy.

Note: For most drugs, pharmacists in some jurisdictions can choose to charge a separate dispensing fee for each monthly supply filled but are not required to.

Follow Us On Social Media!

Looking at Benefit Plans for your business?

Acquisition pricing hurts clients

Acquisition Pricing Hurts Clients – Why and How?

Have you ever started a group benefits plan or changed insurers for a lower price? Only to be told a year later that due to your high claims your rates have increased. The reality is that almost always the initial rates you were quoted were artificially low. Creating...
What Employee Benefits Are Most Important?

What Employee Benefits Are Most Important?

There is a variety of employee benefits a company can offer. You might be thinking "where do I begin?" We are going to discuss what benefits are most important to employees. We have noticed a shift in consumer trends in the last few years. Benefits that used to be...
Health & Dental Relief

Health and Dental Premium Relief Extended for June

The health and dental premium reduction we provided to plan sponsors for April and May gave relief in real-time. In implementing this, it reflected the anticipated decrease in plan member health and dental claims due to pandemic closure of service providers. We...
Keeping Social while Social Distancing

Keeping Social While Social Distancing

With Covid-19 going strong, there is a new normal that has arrived. We will talk about a few ways to help us to stay social while social distancing. Since the Covid-19 pandemic, health experts have asked us to social distance, keeping at least 6 feet apart from one...
How to stay focused working from home?

How to Stay Focused Working from Home?

There are more people working from home now than ever before. With the outbreak of Covid-19, it has forced thousands of people to work from home. In this, article we would like to share some of the pros and cons of working from home. Then we will provide some tips on...
What are the Benefits of Group Insurance?

What Are The Benefits of Group Insurance?

First of all, there are a lot of insurance packages out there, for individuals and for groups. So, which should you choose? We are going to talk about what the benefits of group insurance are for you as employees and employers. Although the government sponsors many...
Support For Small Businesses

COVID 19: Support For Small Businesses In BC

Small Business BC Support For the latest information on small business supports, resources and advisory services during COVID-19, please visit Small Business BC. Advisors are ready to help by phone at 1-800-667-2272, email and daily digital meetups. See how COVID-19...
Employee Benefits, are they important?

Are Employee Benefits that Important?

Do I really need employee benefits? Are employee benefits THAT important? Let's talk about some reasons why employee benefits are important to employees. 1. Increase Your Appeal As A Business Benefits are strategically important. They are an important way to get...
Social Media for Your Company

20 Benefits of Using Social Media for Your Company

A growing number of companies are using social media as part of their marketing strategy. Social media works in many ways as a marketing tool. has found great success from using social media in their marketing strategy. Let's talk about 20 benefits of...
Scientifically Proven Ways to Stay Happy at Work!

Scientifically Proven Ways to Stay Happy at Work!

We are living in a busy world! Always on the go. This can make us feel overwhelmed, stressed or even unhappy when we get to work. What can we do? How can we be happy? We will talk about 5 ways that are scientifically proven to stay happy at work in a stress-filled...