Behind the counter: a time-driven activity-based costing analysis of community pharmacy dispensing services in Taiwan

BACKGROUND: Sustainable financing of community pharmacy services requires reimbursement models that accurately reflect resource use. However, empirical cost data for dispensing services remain limited in many health systems, including Taiwan's single-payer National Health Insurance (NHI) program. This study estimated the cost of dispensing services in community pharmacies and assessed the extent to which current reimbursement reflects underlying resource utilization. METHODS: A cost analysis was conducted from the healthcare provider perspective using a time-driven activity-based costing approach. Eight community pharmacies in Taiwan were included. Dispensing workflows were systematically mapped into six sequential steps, and time-and-motion data were collected across six simulated standardized dispensing scenarios designed to capture variation in medication number and type. Resource use included direct, indirect, and personnel-related cost components. Indirect costs were allocated using both space-based and revenue-based approaches. Personnel costs were calculated using capacity cost rates based on pharmacist salaries and practical working capacity. All costs were expressed in New Taiwan Dollars (NT$), and sensitivity analyses assessed robustness under alternative allocation assumptions. RESULTS: Mean dispensing time ranged from 195 to 303 s per prescription and increased with prescription complexity. Total dispensing costs ranged from NT$30.82 to NT$61.21 per prescription. Each additional medication increased costs by NT$13-17, while controlled substances added NT$18-23 due to additional regulatory procedures. Personnel-related costs were the primary cost driver, and cognitive verification activities accounted for the largest share of workload. Compared with current NHI dispensing reimbursement of approximately NT$49-68 per prescription, reimbursement may inadequately reflect the resources required for more complex prescriptions. Cost patterns were consistent across allocation methods. CONCLUSIONS: Dispensing services are resource-intensive and vary with prescription complexity, yet current flat-fee reimbursement under Taiwan's NHI does not adequately reflect this variation. Complexity-adjusted reimbursement mechanisms, such as per-medication or controlled-substance modifiers, may better align payment with actual resource utilization and support sustainable community pharmacy services.