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Prescription prices in the USA
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Rep. Paul Ray proposes bill to lower drug prices by giving rebates to the patients

Rep. Paul Ray wants pharmacies to pass their rebates on to the consumers instead of the insurance companies. (Photo: KSL TV)

Rep. Paul Ray has made it his goal to lower drug prices in America – but that’s not an easy task.

Prescription prices in the United States are higher than anywhere else on earth, with some of the more popular drugs coming in as much as three times the price seen in countries like Britain and Canada.

There’s a lot of reasons those prices are so high, but Ray has identified one that he thinks he can fix. Rebates demanded by groups called pharmacy benefit managers, Ray says, are a big part of the reason our prices have become so inflated, and he wants to fix that.

Paul Ray on his plan to reduce prescription prices

Paul Ray spoke to KSL Newsradio’s Dave & Dujanovic and explained the new bill he’s hoping will finally lower our drug prices.

“There’s a middle man called a pharmacy benefit manager,” Ray explained, who plays a major role in the costs of drugs in the US.

These PBMs, Ray explained, negotiate prices with pharmaceutical companies on behalf of the insurance companies. As part of that process, they will often demand that the drug companies provide rebates to both them and the insurance companies, which require the drug companies to raise their costs.

“Many of the drug companies have told me they’ve tried to lower prices and the PBM has said: ‘no, we’ve negotiated new contracts with our insurance carriers, you have to increase your prices,'” Ray says. “And when they’ve balked at increasing, they’ve been told: ‘We won’t buy your drugs anymore.”

If the drug companies want to stay in business, Ray says, they have to hand out these rebates, and in some cases, those rebates will take up as much as 75 percent of the medication’s cost. It’s a deal that’s very profitable for the PBMs and the insurance companies. For the customers, though, all it does is make the drugs more expensive, even when they’re forced to pay out-of-pocket.

“They’re trying to make money off of the same things that they’re supposed to be paying for, and they’re putting the cost back on the consumer,” Ray says.

Rep. Paul Ray

File photo of Rep. Paul Ray, taken on April 12th, 2017. (KSL TV)

Ray is pushing a bill that would require 100 percent of any of these rebates to be passed on to the customer instead of going into the pockets of the insurance provider and the PBM.

He doesn’t think that his bill will fix the whole problem, but he’s convinced it’ll be a good first step. With all the complexities involved in drug pricing, he says, it’s difficult for state lawmakers to tackle everything at once.

“We still need to talk about overall drug pricing, but obviously this isn’t an issue we’re going to cover all in one time,” Ray says. “This is one area where we can actually mandate.”

Ray is expecting a lot of opposition to his bill. “The hurdles are going to be your PBMs. … They are going to put up a huge fight,” he says. “Every influential lobbyist that they can purchase, they’re going to do that.”

Still, he’s hoping that the fight will be worth it and that, bit by bit, we’ll be able to chip down the over-inflated drug prices plaguing our country.

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