When you’re prescribed a biologic drug like Humira for rheumatoid arthritis or insulin for diabetes, your out-of-pocket costs shouldn’t depend on whether your doctor chooses the brand-name version or a biosimilar. But in 2025, they still do. Despite FDA approval of over 70 biosimilars, and their potential to cut drug costs by 10-33%, most insurance plans treat them exactly like the original biologics-same tier, same prior authorization, same high copays. That’s not just confusing-it’s costing patients thousands every year.
What Are Biosimilars, Really?
Biosimilars aren’t generics. Generics are chemically identical copies of small-molecule drugs. Biosimilars are complex, living-cell-derived versions of biologic drugs-medicines made from proteins, antibodies, or other biological materials. They’re not exact copies, but they’re required by the FDA to be highly similar in structure, safety, and effectiveness. The first one, Zarxio, hit the market in 2015. Since then, more than 40 have become available in the U.S., with nearly a dozen adalimumab biosimilars alone replacing Humira.
These aren’t experimental. They’ve been used safely in Europe for over a decade. In Germany, biosimilars make up over 80% of the market for drugs like Humira. Here? Less than 23%. Why? It’s not about science. It’s about how insurance plans are structured.
How Insurance Tiers Work-And Why Biosimilars Get Locked Out
Most Medicare Part D and commercial plans use a tiered formulary system. Tier 1 usually has low-cost generics. Tier 2 has preferred brand-name drugs. Tier 3 and 4 are for specialty drugs-biologics, cancer treatments, autoimmune therapies. These tiers often require you to pay a percentage of the drug’s cost (coinsurance), not a flat copay.
Here’s the problem: 99% of Medicare Part D plans in 2025 placed Humira and its biosimilars on the exact same tier. That means if Humira costs $5,000 per month, your coinsurance might be 33%-$1,650 out of pocket. If a biosimilar costs $4,500, your coinsurance is still 33%-$1,485. That’s a $165 difference. Not enough to motivate a patient to switch, especially when your doctor, pharmacist, or insurance rep says, "It’s the same thing."
Only 1.5% of plans put biosimilars on a lower tier. That’s less than one in 60 plans. Meanwhile, 80% of plans cover the brand-name insulin Lantus, but fewer than 10% cover insulin biosimilars-even though they’re FDA-approved and cheaper. This isn’t accidental. It’s a financial incentive for pharmacies and PBMs to keep prescribing the more expensive version.
Prior Authorization: The Hidden Gatekeeper
Prior authorization is supposed to ensure drugs are used appropriately. But for biosimilars, it’s become a barrier, not a safeguard. Nearly all plans (98.5%) require prior authorization for both Humira and its biosimilars. None of them make it easier to get a biosimilar approved. In fact, some require you to try a biosimilar first before getting the brand drug-a process called step therapy.
One rheumatologist in Ohio told me about a patient with severe RA who waited 28 days for approval to switch from a biosimilar back to Humira. The patient had been stable on the biosimilar for six months. But because the plan required step therapy, the doctor had to submit multiple appeals, provide lab results, and prove the biosimilar wasn’t working-even though the patient showed no signs of relapse. That’s not clinical judgment. That’s administrative chaos.
Doctors spend 3-5 hours a week just managing prior auth requests. That’s time they could be seeing patients. And for patients? It’s delays in treatment, increased pain, lost workdays, and stress.
Why PBMs Are Changing Tactics (And What It Means)
It’s not all bad news. Some pharmacy benefit managers (PBMs) are finally shifting strategy. In 2025, Express Scripts, CVS Caremark, and OptumRx all removed Humira from their standard formularies. Instead, they’re pushing patients toward biosimilars by placing them on preferred tiers-Tier 3-with 25% coinsurance instead of 33%. That’s a real savings: $1,000 a month versus $1,650.
This isn’t charity. It’s business. By excluding the expensive brand-name drug entirely, PBMs force patients and doctors to choose the cheaper option. It’s a bold move, and it’s working. Market share for adalimumab biosimilars is climbing, slowly. Analysts predict they’ll hit 40% of the market by 2027-if this trend continues.
But here’s the catch: this only works if the biosimilar is actually available and covered. Many plans still don’t cover newer biosimilars. And some still require prior authorization even for interchangeable biosimilars-drugs that pharmacists can substitute without a doctor’s approval. That’s outdated. The FDA approved interchangeability for a reason.
What You Can Do If You’re on a Biologic
If you’re taking a biologic drug right now, here’s what to ask your doctor and insurer:
- Is there a biosimilar version of my drug? (Check the FDA’s biosimilar list)
- Is it on the same tier as the brand? If so, ask if your plan will consider moving it to a lower tier.
- Is prior authorization required? If yes, get a copy of the formulary and see if your drug is listed.
- Can your pharmacist switch you to an interchangeable biosimilar without a new prescription? (Only if it’s labeled as interchangeable by the FDA.)
- Ask your doctor to write a letter of medical necessity if you’ve been stable on the biosimilar and your plan denies coverage.
Patients aren’t powerless. In 2024, the Medicare Rights Center found that when patients appealed denied coverage for biosimilars, nearly 60% were approved on appeal. That’s a win rate most insurance battles don’t offer.
The Bigger Picture: Why This Matters
The Congressional Budget Office says biosimilars could save the U.S. healthcare system $54 billion over the next decade. But under current coverage rules, that number drops to $1.8 billion. Why? Because patients aren’t being allowed to save money. Insurance plans aren’t designed to help them. They’re designed to protect revenue.
It’s not just about cost. It’s about access. Biologics treat chronic, life-altering conditions. Delays in treatment mean more hospitalizations, more complications, more suffering. And yet, the system still treats biosimilars like second-class drugs-even though they’re FDA-approved, clinically proven, and cheaper.
Change is coming. CMS now requires plans to report biosimilar coverage data. The FTC is watching. The OIG is calling out discriminatory practices. But real progress won’t happen until patients, providers, and policymakers demand that insurance tiers reflect real clinical value-not corporate profit.
Are biosimilars as safe as brand-name biologics?
Yes. Biosimilars undergo rigorous FDA testing to prove they’re highly similar to the original biologic in terms of safety, purity, and potency. They’re not experimental. Over 15 years of real-world use in Europe show no increased risk of side effects. The FDA requires post-market monitoring, and thousands of patients in the U.S. have safely switched to biosimilars without issues.
Why don’t pharmacies automatically substitute biosimilars for brand-name drugs?
Only a few biosimilars have the FDA’s "interchangeable" designation, which allows pharmacists to substitute them without a new prescription. Even then, many insurers require prior authorization or don’t cover the interchangeable version at all. Many pharmacies also don’t stock biosimilars because they’re paid the same rebate for the brand-name drug-so there’s no financial incentive to switch.
Can I switch from my brand-name biologic to a biosimilar on my own?
No. You need your doctor’s approval and your insurer’s authorization. Even if your doctor supports the switch, your plan may require prior authorization or step therapy. Some plans won’t cover biosimilars at all. Don’t switch without checking your formulary and talking to your provider.
Do all insurance plans cover biosimilars?
No. In 2025, 50% of Medicare Part D plans still didn’t cover any adalimumab biosimilars. Many commercial plans exclude them entirely. Coverage varies by insurer, region, and drug. Always check your plan’s formulary before assuming coverage.
Why are biosimilars still so expensive if they’re cheaper to make?
Manufacturing biosimilars is complex and costly-far more than making a chemical generic. But the real reason they’re still expensive is because insurers don’t negotiate hard for lower prices. When biosimilars are placed on the same tier as the brand, there’s no pressure to lower list prices. PBMs and drug manufacturers often share rebates, so the system rewards keeping prices high-even for cheaper alternatives.
