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Home > Why OTIP > News > Understanding limits on pharmacy mark-ups and dispensing fees
Your group benefits plan makes it easy and convenient when filling a prescription. Your drug claim gets processed right at the pharmacy counter and instantly you are told the amount covered by your plan.
But you may be wondering how drug amounts are determined and how much is covered under your benefits plan?
Your group benefits plan may include limits on pharmacy mark-ups and dispensing fees to help manage the costs associated with prescription drugs. If you share in either the cost of your plan or the cost of your prescription, understanding pharmacy mark-ups and dispensing fees may help you save money.
Although costs vary depending on where you shop, three factors determine the price of prescription drugs:
NOTE: In the province of Quebec, pharmacists are not required to provide a breakdown of the drug cost, mark-up and dispensing fee.
If the pharmacy is dispensing a drug that costs $100 and they apply a 10% mark-up on top of the drug ingredient cost (the amount they paid to buy the drug), the pharmacy may claim up to $10 (10% of the $100).
If the pharmacy is charging a mark-up on a drug claim that is greater than the dollar amount set by your group benefits plan, the mark-up allowed will be reduced to the maximum dollar amount set by your plan. Therefore, unreasonably high drug mark-ups may impact your prescription costs and how much you need to pay out of your own pocket.
The allowable dispensing fees vary by province; therefore, your specific claim is calculated and adjusted similar to the process for pharmacy mark-ups. Here are some cost-saving ideas for filling prescriptions:
Learn more about dispensing fees and how to save money on your prescriptions.
Questions? We are here to help. Check your benefits booklet for benefit plan terms and coverage details. You can also contact OTIP Benefits Services at 1-866-783-6847 or send us an online note.
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