The retail price of pharmaceuticals is a result of different costs, markups, and fees, few of which are well understood by consumers. The final retail cost of the same drug can vary across provinces and territories, and within jurisdictions, prompting concerns and complaints about fairness. Perhaps the least understood cost component is the pharmacy markup. Pharmacy markups appear to vary across several factors, including location, type of drug, the pharmacy, and whether public or private insurance is involved.
Drawing on information and insights gathered from a literature review and interviews with key stakeholders, this briefing explores the inputs and costs that are reflected in the final retail cost of pharmaceuticals, sheds light on how pharmacy markups are determined, and discusses key themes and opportunities. It is the first in the new Health Care Aware series, which aims to bring greater transparency on a number of complex issues in health care.