Dispensing Fee
A dispensing fee is the professional service charge that a pharmacy adds to the cost of a prescription drug when it is filled. This fee covers the pharmacist’s time, expertise, and services such as verifying the prescription, reviewing potential drug interactions, preparing the medication, and providing counselling on proper use. Each pharmacy sets its own dispensing fee, which can vary based on location, prescription type, and the pharmacy’s policies.
How It Works
The total cost of a prescription drug claim is made up of three main components: the ingredient or drug cost, the pharmacy markup, and the dispensing fee. The dispensing fee and markup together compensate the pharmacist for reviewing and ensuring the prescribed medication is appropriate and safe and for counselling the patient, while also covering operating costs like stocking medication, maintaining patient medication records, rent, taxes, and employee salaries. Pharmacies are free to set the markup and dispensing fee they charge as long as they do not exceed any legislated maximums, so the cost of the same prescription drug can vary widely between pharmacies and even among pharmacies in the same chain. When a drug claim is submitted, the insurer verifies that the components fall within legislated, reasonable and customary maximums established for the jurisdiction, and any component exceeding the maximum is capped at the reasonable and customary amount during adjudication.
Example:
Suppose a maintenance prescription is filled at a Canadian pharmacy and the receipt itemizes the drug ingredient cost, the pharmacy markup, and a separate dispensing fee. Under a typical private extended health plan that reimburses a percentage of eligible drug costs, the insurer pays its share of the eligible amount. If the pharmacy’s dispensing fee is higher than the reasonable and customary maximum the insurer allows for that province, the plan caps reimbursement at that maximum and the member pays the difference out of pocket. Because the same drug filled monthly incurs a dispensing fee each time, asking the pharmacist for a 90-day supply means paying that fee once instead of three times, reducing out-of-pocket cost.
What to Watch For:
Not all extended health care plans cover 100% of prescription drug costs or even dispensing fees, so you may still have out-of-pocket expenses. A reasonable and customary dispensing fee is the maximum dispensing fee an insurer will reimburse in each province or territory, and these limits do not apply if you live in Quebec. Public drug plans also cap how often a dispensing fee is paid. Under the Ontario Drug Benefit Program, in most cases the dispenser is paid a maximum of two dispensing fees per 28 days for a listed drug product, even if the prescription directs more frequent dispensing. Some provinces do not require pharmacies to outline their dispensing fee on the receipt, which can make it difficult to know what you are paying, so ask for an itemized receipt that separates the drug cost from the dispensing fee to support accurate claim submission.
