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Drug Markup

Uncovering the real cost of manufacturing a drug is difficult by design.

Pharmaceutical companies shield this information using a mix of intellectual property protections, trade secrecy laws, and regulatory opacity. There is no public record of what it costs to produce most medicines, and manufacturers are not legally required to disclose it — even when public money funds the development.

At DrugMarkup, we bypass this wall of secrecy using a transparent methodology based on independent academic research, nonprofit price audits, and international pricing benchmarks. Our estimates are grounded in publicly available evidence and are always open to scrutiny.

Here is how we calculate the markup values shown on this website:

1. Selection of Drugs

We focused on the 50 top-selling brand-name prescription drugs in the United States, selected by total sales revenue. These rankings were based on:

The list includes drugs for chronic conditions, cancer, autoimmune diseases, diabetes, and mental health — some of the most widely used and profitable medicines in the country.

2. Estimated Manufacturing Costs

Since pharmaceutical companies do not publish their manufacturing costs, we relied on trusted third-party sources, including:

Our estimates reflect mass-production costs, which include the cost of APIs (active pharmaceutical ingredients), formulation, excipients, packaging, quality control, and regulatory batch testing.

Research and development and marketing expenses are excluded; the object is to isolate the markup on manufacturing alone.

3. U.S. Retail Prices

Retail prices were gathered from widely used consumer and government sources:

For drugs offered in multiple strengths or formulations, we used a representative average dose based on common prescribing patterns. Prices are listed per month or per full treatment course, depending upon the medicine.

4. Markup Calculation

Markup Ratio = (U.S. List Price) ÷ (Estimated Manufacturing Cost)

This ratio shows how many times higher the retail price is compared with the estimated cost of production. For many drugs — particularly injectables, biologics, and insulin — the markup can exceed 30×, 100×, or more.

5. Limitations & Transparency

We strive for accuracy and clarity, yet certain limitations apply:

We welcome corrections, updates, and additional data contributions. Transparency remains our priority.

International Price Estimation

To demonstrate global price inflation, we estimated non-U.S. list prices using public conversion ratios from the RAND Corporation and other verified sources.

Country Source & Year U.S. Price Relative Conversion Used
Canada RAND Corp., 2024 (IQVIA MIDAS 2022) 229 % U.S. × 0.44
Germany RAND Corp., 2024 294 % U.S. × 0.34
United Kingdom RAND Corp., 2024 270 % U.S. × 0.37
India PharmEasy, 1mg (2025) ≈ 6 % U.S. × 0.06

Method Overview

  1. Multiplier logic: RAND presents the ratio as “U.S. ÷ foreign”. We inverted this to generate multipliers (e.g. 1 ÷ 2.29 = 0.44).
  2. Currency conversion: Indian retail quotes were converted using the July 2025 rate of USD 1 = ₹ 83.
  3. Rounding: All values were rounded to one decimal place for clarity.
  4. Scope and limitations:
    • Estimates reflect list prices, not net-of-rebate prices
    • Real-world pharmacy prices vary by region and policy
    • India lacks a national price database; six percent is a conservative average
    • Use CDSCO ceilings or actual pharmacy invoices for precision
  5. Alternate ratios: RAND reports larger gaps for brand-name drugs (e.g. U.S. = 324 % of Canada). You may substitute these if needed.

Prepared July 2025
Sources: RAND Corporation (International Prescription Drug Price Comparisons, 2024), PharmEasy, Tata 1mg, Apollo Pharmacy