Background: Cost of drugs is an important factor influencing compliance with treatment. Skin diseases are a common problem in Nepal. A large number of dermatological preparations are available. Studies on the price variation between brands are lacking. Hence the present study was carried out to obtain information on the price variation between different brands of topical dermatological preparations. The variation within and between Nepalese and Indian brands was also studied. Materials and methods: The prices of brands were obtained from three sources, the pharmacy price list of the Manipal hospital, the Nepal Drug review and Advance Drug Review. The percentage cost variation was calculated using the formula Percentage cost variation = Cost of highest priced - cost of lowest priced brand × 100 Cost of lowest priced brand The drugs were grouped into therapeutic categories and the average variation for different categories was calculated. Results: A total of 37 Nepalese and 397 Indian brands were surveyed; 40 drugs or drug combinations were studied. Twenty-five drugs (62.5%) showed more than 75% variation. The combination of betamethasone, gentamicin and clotrimazole showed the maximum variation. The Nepalese brands were generally cheaper than their Indian counterparts but there were exceptions. Among the therapeutic categories, the maximum variation was observed among topical antiseptics, topical antivirals and corticosteroids. The variation within Nepalese brands was less compared to that within Indian ones. Conclusions: There was substantial price variation observed. Information on product quality and prices should be widely disseminated. True' competition between brands should be encouraged.