Why do I sometimes have to pay out of pocket for my prescription drugs?

April 13, 2025

Your pay-direct benefits card makes it easy and convenient when filling a prescription. Your drug claim gets processed right at the pharmacist’s counter and instantly you are told the amount paid by your plan and any amount owing. How did the pharmacy determine this amount for your drugs? Why is it important to have limits on pharmacy mark-ups and dispensing fees?

As per the OSSTF ELHT Benefits Plans includes mandatory generic substitution(News and Updates from Ontario Teachers Insurance Plan | OTIP RAEO  ) and limits on dispensing fees and mark-ups to help manage the costs associated with prescription drugs.

Price of your prescription

There is no limit to what a pharmacy can charge for a prescription. Pharmacists can charge any mark-up or dispensing fee that is considered standard for their store or company.

Factors That Determine the Price Of Prescription Drugs

Although costs vary depending on where you shop, three factors determine the price of prescription drugs:

Drug Ingredient Cost  + Pharmacy Markup  + Dispensing Fee  =    Total Cost of The Prescription 

• The Drug Ingredient Cost is the amount a pharmacist pays to buy the drug.
• A Pharmacy Mark-up refers to any additional amount a pharmacist may charge for a drug, above the original drug cost. The mark-up is applied to help pay for the costs of running the pharmacy.
• A Dispensing Fee is the professional fee a pharmacist charges to fill your prescription.

NOTE: In the province of Quebec, pharmacists are not required to provide a breakdown of the drug cost, mark-up and dispensing fee.

The OSSTF ELHT Benefits Plans includes the following limits on drug mark-ups and dispensing fees:

• Dispensing fee maximum is subject to reasonable and customary limits (which is currently $12 per prescription).
• Maintenance medications are limited to six dispensing fees/prescription/12 months.
• Pharmacy mark-up is limited to 10% of the drug ingredient cost.

If your pharmacy charges a dispensing fee and/ or mark-up beyond the maximums stipulated by the OSSTF Benefits Plans then you will be paying the difference out of pocket.

Be a smart shopper

To keep drug costs down for you and your plan, here are some cost-savings ideas:

• Shop around. Because the cost of prescription drugs varies depending on where you shop, call your local pharmacies and ask how much it will cost to fill your prescription(s). Find out what their dispensing fee is and get a breakdown of the drug cost. You may be able to get a better price somewhere else.
• Request a three-month supply. For prescriptions that you fill regularly and take on a long-term basis (e.g. cholesterol-lowering or blood pressure medication, oral contraceptives, insulin, etc.), get a three-month supply instead of just one month to reduce the number of dispensing fees you are charged. Be sure to let your prescribing doctor and/or pharmacist know your maintenance prescriptions are limited to six dispensing fees every 12 months.

Questions about your OSSTF Benefits drug coverage? You can contact OTIP Benefits Services at 1-866-783-6847.

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The information in this document is provided by OSSTF Benefits for general information only. OSSTF Benefits endeavours to have all information current and accurate. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, or suitability of the information included. All information is subject to change without notice.

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