Empower Employees with Knowledge - Pharmacies

Trust and knowledge are the currencies of healthcare. We trust our doctor to prescribe the most appropriate medication but we often don’t understand enough about drug pricing and pharmacy policies to make an informed purchase decision. As a result, most of us fill the prescription at the most convenient pharmacy without questioning the cost.

While strategically designed benefit plans can incentivize employees to participate in managing their healthcare expenses, employees need to be equipped with the knowledge necessary to make those healthcare decisions.  For employees, pharmacy choice is a key factor that greatly influences their prescription cost. 

Pharmacy Type

Convenience, confidence, privacy, timeliness and cost need to be considered when choosing which pharmacy to use. After sitting in an emergency room for half of the night, a 24-hour retail pharmacy provides great value. For some, shopping for beauty products or groceries while waiting for a prescription to be filled enhances the experience.  Others may prefer receiving their prescription by mail from an accredited online pharmacy.  While some discount retailers specialize in offering low dispensing fees, online pharmacies have gained market share over the past quarter century by consistently offering low markups, low dispensing fees, lowest cost interchangeable brands and free delivery.


In most cases, the cost of a prescription is the total of the wholesale ingredient cost, markup and dispensing fee.  The markup that pharmacists charge on the wholesale cost of drugs varies significantly based on pharmacy type and pharmacy policy. Some pharmacies have an upper limit so that the markup on very expensive medication will not exceed a certain dollar amount.

Dispensing Fees

Pharmacies charge a dispensing fee for the services required to compound and dispense medications.  Dispensing fees vary among different pharmacies, with online and discount retail pharmacies generally charging lower fees.

Refill Policies

Most pharmacists will dispense up to a three month supply of maintenance medication in order to save clients time and money.  Some pharmacists refuse to dispense more than a one month supply, which triples the dispensing fee cost for clients.  There are even some pharmacists who double the dispensing fee when providing more than one month’s supply at a time.

Interchangeable Brands

Some pharmacies will provide the lowest cost interchangeable brand, which can save clients up to 85% of their drug costs.

Role of the Employer

While many pharmacies realize that their customers don’t feel equipped to manage the cost of their medication, employers can play a vital role in empowering employees to take charge of their prescription costs by facilitating access to educational resources.  Ensuring that your staff is aware how their coverage intersects with the current healthcare landscape is a vital step in designing and implementing a benefit plan that imbues staff with a sense of empowerment, security and satisfaction.