The Future of Prescription Benefits: FreeRx and the Shift to Value-Based Pharmacy
There’s a conversation happening quietly in benefits consulting circles that hasn’t fully reached the staffing industry yet: the traditional pharmacy benefit management model is broken, and the employers who figure that out first are going to have a significant competitive advantage.
The broken part isn’t hard to find. Total prescription drug spending by health plans on commercially insured individuals more than doubled between 2014 and 2024, rising from $694 to $1,626 per enrollee per year. That 134% increase was driven overwhelmingly by branded and specialty medications. According to Gallup research, 38% of American employees delayed medical care in 2024 due to the high cost of healthcare – and prescription medications are a primary driver of that avoidance.
For employers, particularly staffing firms whose workers often have limited incomes and higher-than-average rates of chronic conditions, that number represents a workforce health crisis that also has direct productivity consequences. Workers who skip medications aren’t just less healthy. They’re more likely to miss work, more likely to use emergency care, and more likely to leave a job that isn’t helping them afford the basics.
Rising Costs, Declining Access
The scale of the pharmacy cost problem has changed the nature of the employer conversation. It’s no longer a question of how to optimize a PBM contract. It’s a question of whether the traditional PBM model is the right structure at all.
The numbers explain why. According to the Segal Health Plan Cost Trend Survey, prescription drug costs are expected to increase 8% in 2025, following double-digit spikes in 2024. Specialty drugs – which represent just 1% of total drug volume – accounted for 63% of the drug spending increase between 2014 and 2024, according to UnitedHealth Group. High-cost medications now make up an estimated 60% of total drug spending.
For workers managing common chronic conditions – hypertension, type 2 diabetes, hyperlipidemia, depression – the brand-name vs. generic distinction matters enormously. The average annual drug spend per capita in the U.S. reached approximately $1,500, according to Kaiser Family Foundation data. For a temporary worker earning $15–18 per hour, a $1,500 annual medication cost isn’t a line item – it’s a financial crisis.
The response to that crisis is often medication non-adherence. Workers skip doses, split pills, or stop filling prescriptions entirely when the cost becomes unmanageable. That’s not just a health problem. The Journal of Managed Care & Specialty Pharmacy has documented a consistent inverse relationship between cost-sharing and medication adherence across disease areas: the higher the out-of-pocket cost, the worse adherence gets. And poor adherence for conditions like diabetes and hypertension leads directly to hospitalizations, complications, and higher total healthcare costs – costs that eventually circle back to the employer.
How Traditional PBM Models Fall Short
The pharmacy benefit management industry has long operated on a model that, in practice, serves intermediary interests more than the interests of employers or employees.
Traditional PBMs negotiate rebates from drug manufacturers in exchange for favorable formulary placement. The size of the rebate is tied to the list price of the drug – which creates an incentive to keep list prices high. According to the Paragon Health Institute, three PBMs control approximately 80% of the U.S. market and are vertically integrated with major insurers, creating structural conflicts between what’s good for the plan and what’s profitable for the PBM.
The result is a system where patient cost sharing is often calculated on list prices – before rebates are applied – meaning workers pay more out of pocket even when the plan is receiving significant manufacturer discounts. The opaque nature of rebate flows has historically made it difficult for employers to determine whether they’re actually getting value from their PBM relationship.
This isn’t a new critique. But the market is finally responding to it at scale.
The Shift to Value-Based Pharmacy
What Value-Based Pharmacy Actually Means
“Value-based pharmacy” gets used in a few different ways, but the core concept is straightforward: tie the cost and structure of prescription benefits to actual therapeutic outcomes rather than to the volume of prescriptions processed.
In practice, value-based pharmacy approaches include:
Outcomes-based contracting: Tying drug reimbursement to measurable patient outcomes, particularly for high-cost specialty medications. If a drug doesn’t deliver the expected clinical result, the PBM or manufacturer shares the financial risk. According to SmithRx’s 2025 PBM trends analysis, more PBMs are entering value-based contracts that reward positive outcomes rather than simply volume.
Transparent pricing models: Pass-through PBMs that disclose all rebates, fees, and spread pricing to plan sponsors – and pass those savings directly to the employer rather than retaining them as margin. Forward-thinking employers are increasingly choosing transparent PBMs to gain actual visibility into what they’re paying for.
Carve-out strategies: Rather than bundling pharmacy benefits with medical, some employers are carving out pharmacy to gain more direct control over formulary design, specialty drug management, and cost containment. According to Innovative Rx Strategies, among large plan sponsors, 48.6% have already carved out at least one component of their pharmacy benefits.
Zero-cost generic programs: The most direct intervention for the affordability problem – simply eliminating cost-sharing for generic medications, particularly for chronic conditions. The research on this model is consistent and compelling.
The Evidence for Zero-Cost Generics
The case for free generic medication programs isn’t theoretical. A major employer study, published in the Journal of Managed Care Pharmacy, found that when workers managing diabetes or high cholesterol could obtain generic medications at zero copayment, adherence rates for diabetic medications remained stable at 81.8% vs. a decline from 81.9% to 73.1% for non-participants. For cholesterol medications, adherent participants maintained 77.7% adherence while non-participants fell from 77.6% to 70.8%.
The implication: it’s not that workers with chronic conditions don’t want to take their medications. It’s that cost creates a barrier that predictably erodes adherence over time. Remove the cost barrier, and adherence holds steady.
Broader research, including a 2010 study in the American Journal of Managed Care, found that $0 copayments – more than any other benefit design variable, including generic prescribing – are the most consistent predictor of improved medication adherence. The mechanism isn’t complicated: people take medications they can afford.
FreeRx: A New Model for Prescription Benefits
How FreeRx Works
FreeRx, offered through Benefits in a Card, is a prescription benefit program designed specifically to address the affordability barrier that drives non-adherence.
The model is structured around removing cost at the most impactful point: chronic medications. Workers enrolled in FreeRx receive unlimited generic chronic medications via home delivery at zero cost. These are the medications that manage ongoing conditions – antihypertensives, antidiabetics, statins, antidepressants, thyroid medications, and many others that workers with chronic conditions take daily.
For acute conditions – the kind that come up unexpectedly and need treatment now – FreeRx provides access to low-cost acute medications at over 64,000 pharmacies nationwide. Workers aren’t locked into mail-order for urgent needs. And for workers managing diabetes who require insulin, low-cost insulin options are available at Walmart Pharmacy locations.
The structure matters because it matches benefit delivery to actual usage patterns. Chronic medications – the ones workers need every month, indefinitely – come via home delivery, so there’s no monthly trip to the pharmacy and no month-to-month decision about whether to refill. Acute medications, where convenience and speed matter, are accessible at the pharmacy the worker already uses.
Unlimited Means Unlimited
The “unlimited” aspect of FreeRx’s generic chronic medication benefit deserves emphasis. Most pharmacy benefit programs either cap the quantity of covered prescriptions or impose cost-sharing after a threshold. FreeRx does neither for covered generic chronic medications.
For a worker managing two or three chronic conditions simultaneously – which is common, since conditions like hypertension, diabetes, and high cholesterol frequently co-occur – an unlimited generic benefit means the monthly medication cost is genuinely zero. That’s a material financial benefit. For a worker taking three generic medications that would otherwise cost $15–25 each per fill, the monthly savings are $45–75. Annually, that’s $540–900 – real money for a temporary worker.
The other dimension of “unlimited” is that it removes the calculation workers otherwise make at the pharmacy counter. When there’s a cost to every refill, workers make decisions about which medications to prioritize. When the cost is zero, they don’t have to make that calculation. Adherence goes up not because the worker is more motivated, but because the friction that was eroding motivation has been removed.
Impact on Employee Satisfaction and Health
Medication Adherence as a Workforce Metric
Benefits conversations tend to focus on plan design and cost structures, but the real measure of a pharmacy benefit’s value is whether workers actually take their medications as prescribed. Non-adherence is widespread in the workforce – and it has compounding effects.
Milliman’s analysis of 2.5 million commercially insured patients found that among high-risk patients with diabetes, hypertension, or hyperlipidemia, adherent patients had significantly lower total healthcare costs than non-adherent patients. The difference wasn’t marginal – for high-risk patients, adherence was associated with meaningfully better outcomes and lower overall spend.
For employers, that translates into reduced sick days, fewer hospitalizations, and better productivity from workers managing chronic conditions. For staffing firms specifically, it means less turnover driven by health deterioration and fewer assignment interruptions from preventable health crises.
Employee Financial Relief
Prescription cost relief shows up in job satisfaction metrics in ways that are easy to underestimate. Workers who are spending $50, $100, or more per month on medications are making trade-offs elsewhere in their budget. When a benefit genuinely reduces that cost, workers notice – and they attribute that relief to their employer.
This is particularly true for chronic medication costs, which are predictable and monthly. A one-time benefit – a signing bonus, a gift card – creates a moment of appreciation. A monthly benefit that reliably reduces a recurring expense creates an ongoing, repeated association between the employer and financial relief. That association is a retention factor.
For staffing firms competing for workers in tight labor markets, the question isn’t whether workers care about prescription benefits. They do. The question is whether the pharmacy benefit you’re offering actually reduces their costs in a way they experience, or whether it’s a nominal benefit that looks good on paper but doesn’t change what they pay at the pharmacy counter.
The Business Case for Better Pharmacy Benefits
Competitive Differentiation
The staffing industry has historically treated benefits as a compliance exercise: offer enough to meet ACA requirements, keep costs manageable, and move on. That approach made sense when competitors were doing the same thing.
The competitive environment in 2026 is different. Labor markets in manufacturing, logistics, hospitality, and light industrial remain tight in many regions. Workers have choices. The staffing firm that can honestly say “your generic medications are free – unlimited, home-delivered – and you get 24/7 virtual care access starting your first day” is competing differently than one that says “we offer medical coverage as required.”
Benefits are increasingly how staffing firms differentiate in recruiting. And for benefits to differentiate, they have to deliver tangible, experienced value – not just coverage that technically exists on paper.
Integration with Comprehensive Benefits Strategy
A free generic medication program doesn’t exist in isolation. Its impact is amplified when paired with:
24/7 virtual care: Workers who can access a doctor at any hour, without a copay, are more likely to actually manage their health proactively. Telehealth and pharmacy benefits work together – the virtual visit diagnoses the condition, FreeRx provides the medication.
Day-one eligibility: Prescription benefits that don’t kick in for 30 or 60 days don’t help workers who are managing chronic conditions from their first day on the job. Day-one eligibility for pharmacy coverage means zero interruption in medication access during job transitions – a significant concern for workers who change employers frequently.
First-dollar coverage: High-deductible structures that require workers to meet a significant out-of-pocket threshold before pharmacy benefits apply often function as “no pharmacy benefit” for low-income workers who can’t reach the deductible. First-dollar coverage eliminates that barrier.
The shift to value-based pharmacy models is accelerating because the old model demonstrably fails workers who need it most. Free generic programs aren’t charity – they’re a rational benefit design response to a cost problem that, unaddressed, creates real workforce health and retention costs for the employers who thought they were saving money by keeping pharmacy benefits thin.
References
1. UnitedHealth Group, “Prescription Drug Prices Are Driving Cost Increases for Employers and Commercially Insured Individuals,” UHG, June 2025. https://www.unitedhealthgroup.com/content/dam/UHG/PDF/2025/2025-06-25-uhg-prescription-drug-prices.pdf
2. LEVR Health, “Addressing Rising Prescription Costs: How Employers Can Support Employees in 2025,” LEVR, February 2025. https://www.levrhealth.com/addressing-rising-prescription-costs-how-employers-can-support-employees-in-2025/
3. Intercept Health, “2025 Prescription Drug Pricing Predictions,” January 2025. https://intercept.health/insights/blog/2025-prescription-drug-pricing-predictions-trends-employers-and-employees-need-to-know/
4. Paragon Health Institute, “PBM 101: What They Are and How They Affect Drug Prices,” January 2026. https://paragoninstitute.org/private-health/pbm-101-what-they-are-and-how-they-affect-drug-prices/
5. SmithRx, “PBM Trends in 2025,” January 2025. https://smithrx.com/blog/4-pbm-trends-in-2025
6. Roundstone Insurance, “Your Guide to Pharmacy Benefit Managers,” September 2025. https://roundstoneinsurance.com/blog/pharmacy-benefit-managers-your-self-funded-plans-secret-weapon/
7. Journal of Managed Care & Specialty Pharmacy, “Cost-sharing and adherence, clinical outcomes, health care resource utilization,” JMCP, April 2022. https://www.jmcp.org/doi/10.18553/jmcp.2022.21270
8. PMC / Journal of Managed Care Pharmacy, “Evaluation of Increased Adherence and Cost Savings of a Zero Copay Program,” PMC, 2023. https://pmc.ncbi.nlm.nih.gov/articles/PMC10438126/
9. American Journal of Managed Care, “Medication Adherence and the Use of Generic Drug Therapies,” PMC, 2010. https://pmc.ncbi.nlm.nih.gov/articles/PMC2918380/
10. Milliman, “The Impact of Medication Adherence on Total Healthcare Costs,” Milliman, May 2025. https://www.milliman.com/en/insight/medication-adherence-healthcare-costs-insured-patients
11. Innovative Rx Strategies, “Year in Review: Pharmacy Benefits 2025,” December 2025. https://innovativerxstrategies.com/year-in-review-pharmacy-benefits-2025/
