What does a drug's "markup" typically refer to in a pharmacy setting?

In a pharmacy setting, a drug's "markup" refers to the percentage increase on the purchase price of the medication. This markup is essential for pharmacies as it helps cover operational costs, including salaries, rent, utilities, and other expenses, while also allowing for a reasonable profit margin. The markup is calculated based on how much the pharmacy paid to acquire the drug, and then it adds a percentage to that base cost to determine the final sale price to customers.

Understanding markup is crucial because it reflects how much the pharmacy needs to charge in order to maintain financial viability while providing medications to patients. The other options provided focus on specific costs related to drug handling or charges not directly related to the markup itself. For instance, storage costs, fees from insurance companies, and shipping costs are important in the overall financial handling of a pharmacy but do not define the concept of markup.