Yes, the markup is less, because the price of brands are (I believe) capped by the Canadian gov't to a certain amount (don't remember what)...and this is for brand name, not generic. The Canadian route would seem to offer savings to individuals on meds that are still on patent and are not available as generics yet. In any case, this "cap" is what allows Canadian pharmacies to undercut domestic retailers.
I think U.S. retailers have a lower profit margin on brands since they are so expensive already...the market wouldn't be able to bear a higher markup. They make up for this low profit margin on brands with higher markups on generic. Example: one of our Henderson Wags will sell a 30 day supply of Fluoxetine generic for ~$160. Costco, which operates on lower profit margins on all their stuff, will sell the same 30 day supply for ~$20. Quite the markup! (about 8x)
So yeah, cash price for brands are already high here in the U.S. not so much due to the retailers, but to the manufacturers.
I heard that Oklahoma SBOP has filed lawsuits against some of these storefronts for running illegal pharmacies (or it could be just one establishment, don't remember). The FDA has taken some sort of action against them as well. I'll bet you other state's BOPs are paying attention to Oklahoma...and will base their actions on what happens there.
Oh, and that new Canadian pharm storefront here in Vegas? It was in the LV review journal the other day....it's in the news. It's just a matter of time before I'll see it on the agenda for upcoming NVSBOP meetings. We'll see.