The following are the most common methods of pricing:

1. Percentage markup: In this method, the price is calculated as follows: Cost of ingredients + (cost of ingredients × percentage markup) = Dispensing price The desired percentage markup is taken of the cost of the ingredients and added to the cost of the ingredients to obtain the dispensing price. For example, if the ingredients in a prescription cost 100 and if the pharmacist wishes to apply 40% markup on the cost, he/she would add 40 to the cost of the ingredients and the dispensing price would be 140.The percentage markup applied may be varied depending on the cost of the ingredients. Lower markup is generally used for prescription items of higher cost and higher markup for ingredients of lower cost.
2. Percentage markup + minimum fee: According to this method, the price is calculated in the following manner: Cost of ingredients + (cost of ingredients × percentage markup) + minimum fee = Dispensing price Here, a minimum fee is added to the cost of ingredients apart from a percentage markup. The markup used in this method is generally lower than the one used in the percentage markup method.A minimum fee is established to recover the combined cost of the container, label, overhead, and professional services. Overhead expenses include rent, heater, refrigeration, electricity, taxes, insurance, depreciation on equipment, deterioration of drugs, interest on investment, delivery service, and other miscellaneous expenses. In computing the average overhead cost per prescription, the total overhead expenses of the prescription department are divided by the total prescription dispensed over a specific period of time. It is computed annually.
3. Professional fee: The pricing of a prescription in this method is as follows: Cost of ingredients + professional fee = Dispensing price This method involves the addition of a specified professional fee to the cost of the ingredients used in filling a prescription. The professional fee includes the dispensing cost and professional remuneration. A true professional fee is independent of the cost of the ingredients. Some pharmacies use a variable or sliding professional fee method. Here, the magnitude of the fee is varied with the cost of the ingredients.A common fee for all prescriptions is the true basis of the professional fee method. The fee represents payment for the professional service rendered in filling a prescription and is the same irrespective of the cost of the ingredients.A pharmacy may determine its professional fee by averaging the amount previously charged, above the cost of the ingredients, for prescriptions dispensed over a specific period of time or by using the cost analysis method.
4. Summation: In this method, the pricing is determined as follows: Sum of all costs + profit = Dispensing price Each component cost is determined individually for each prescription and totaled. This equals the break-even point. To this, a profit is added to obtain the dispensing price. The method is equitable and economical, but it has the disadvantage of being complicated, cumbersome, and time-consuming.