Q1 2025 Trends Focus: Biosimilars

Key statistics

Biosimilar adoption has been slow. For medications with available biosimilars, generally less than 10 percent of prescriptions have been for a biosimilar, but the percentage increased significantly in Q2 2024 due to changes in pharmacy benefit manager (PBM) practices.

Biosimilars as a Percentage of Monthly Biologic Prescriptions

Source: Segal’s SHAPE data warehouse, 2024

Strategies for promoting use of biosimilars

The promise of Rx plan cost savings from competition of biosimilar drug therapies is still in its early stages. A biosimilar is like a generic version of a biologic drug. However, a generic drug is an exact copy of a brand drug. A biosimilar, on the other hand, is a biologic (medication derived from living organisms) that is similar to another biologic medication that is already licensed by the Food and Drug Administration (FDA), known as the originator or reference product, and is close enough that it leads to similar clinical outcomes.

Interchangeable biosimilars may be automatically substituted by a pharmacist for the original biologic or reference product, like generic substitution for brand-name medications, while non-interchangeable biosimilars require prescriber approval. Note that applicable laws vary by state.

Due to complexities in developing, manufacturing and storing these biologics, they typically have higher overall costs than non-biologic medications, and biosimilars may still be costly when compared to costs of generic medications. However, biosimilars, which were first approved in 2015, have shown roughly 35 percent savings over originator products when covered under medical benefits. In recent years, more biosimilars have been approved as alternatives to originator products that are commonly provided under pharmacy benefits.

As of January 2025, for example, Humira^®, typically the top biologic medication in terms of pharmacy expenditures, has 10 FDA-approved biosimilars (several are considered interchangeable). Humira biosimilars represent up to 85 percent savings off of Humira's list price and could result in significant savings for plan sponsors, even when accounting for potential rebates.

Evolving landscape

Since the first biosimilars were approved, the promise to lower costs for plan sponsors has not fully materialized. This is likely due to market dynamics and the dominance of originators such as Humira. According to Segal’s SHAPE data warehouse, originators made up 99.6 percent and 98.9 percent of all biologics spending in 2022 and 2023, respectively.

In April 2024, CVS began excluding Humira from most of its major commercial formularies. This change resulted in a decrease of 2.3 percentage points in the median allowed cost of all biologics drugs through August 2024 in Segal’s SHAPE database. Beginning in 2025, ESI and OptumRx have also taken steps to remove Humira from their formularies.  

There is a growing pipeline of biosimilars that will reshape various therapeutic areas, including oncology, diabetes and cardiovascular treatments.

Adoption has been slow

Some reasons for the modest adoption rates include:

• Manufacturers often use stalling tactics to delay the launch of competing biosimilar drugs.
• How biosimilars are positioned within the formulary and represented in the PBM contract may discourage their use. To maximize rebates, PBMs and insurers may favor more expensive brand originator products over the lower-cost biosimilars.
• Prescribing providers may be hesitant to convert to biosimilars due to efficacy concerns, and often find inconsistency in insurers' Some physicians may not want to disrupt a prescription for a patient whose condition is stable.
• Patients may be reluctant to switch because they don’t understand biosimilars, including their safety, efficacy and potential cost savings.
• Plan sponsors may wish to avoid disrupting participants' treatments.

How to encourage adoption

Despite challenges, biosimilars are projected to generate substantial cost savings as adoption increases. Plan sponsors can use several strategies to encourage use of biosimilars:

• Education and awareness campaign. Educate stakeholders, including providers, pharmacies and participants, about the safety and increased availability of biosimilars.
• Plan design and utilization management. Revise the plan design to include incentives that encourage adoption. Consider use of utilization management, such as step therapy, to require patients to try lower-cost options first or prior authorization for expensive biologics and include biosimilars as preferred alternatives.
• Financial incentives. Introduce provider incentives, either through a direct contracting arrangement or by working with the insurer or third-party administrator (TPA) to ensure that the contracted providers are aware of and are considering biosimilars as a treatment option.
• Formulary management. Place biosimilars in preferred tiers with lower copayments to incentivize their use or remove the originator product from the formulary. Regularly update the formulary to include newly approved biosimilars and remove (or deprioritize) more expensive reference biologics.
• Real-time benefit programs. Consider implementing real-time benefit programs that integrate with prescribers’ electronic health record systems and provide comparative pricing for originators and biosimilars when providers e-prescribe.
• Monitoring and reporting. Ask medical administrator and PBM for a current utilization report showing biosimilar vs. reference product utilization under both the medical and pharmacy benefits. This will help identify opportunities to encourage more biosimilar use.

Consider these questions when developing strategies to promote biosimilars:

• What is my PBM’s strategy and how flexible is it in adopting biosimilars?
• Should biosimilars be added as a preferred or non-preferred formulary option?
• Does a brand or generic copayment apply?
• If the plan offers copayment assistance, how will that impact costs?
• Should it be added only for new patients?