With rising health care costs, employers and health plans are turning to biosimilars to help manage expenses while maintaining quality care. Coverage for biosimilars has grown, especially under Medicare, though commercial plan coverage varies by pharmacy benefit manager strategies.
What Are Biosimilars?
Biosimilars are medicines approved by the Food and Drug Administration (FDA). They are made from living organisms that closely match their brand-name biologic counterparts, offering the same strength, dosage, safety, and treatment benefits. They are proven safe and effective for conditions like arthritis, cancer, and chronic diseases. Of over 70 FDA-approved biosimilars, about 40 are available today.
Health Plan Coverage Considerations
Biosimilar coverage is expanding as more therapies enter the market, offering a cost-effective alternative to biologics and improving access for patients. Understanding how biosimilars fit into health benefits can help employees make more informed decisions. Key considerations include:
- Formulary placement – Biosimilars are often placed on lower medication tiers, resulting in reduced copays for members. Formulary placement can vary, so plans should be reviewed annually.
- Administration and coverage – Coverage varies by administration: self-administered biosimilars fall under pharmacy benefits, while those given by a provider are covered under medical benefits and may require authorization.
- Utilization management – Health plans may use step therapy, prior authorization, or quantity limits to manage biosimilar use.
- Substitution policies - The FDA designates some biosimilars as “interchangeable,” allowing pharmacists or providers to substitute them for the reference product without prior approval, depending on plan and state laws.
Making Health Care Decisions About Biosimilars
These steps can help employees make informed health care decisions about biosimilars:
- Review the plan formulary. First, check if biosimilars are in the plan’s formulary and review their cost-sharing level.
- Consult healthcare providers. When discussing treatment, ask the provider about biosimilar options, especially if starting or switching biologic therapies.
- Understand cost implications. Compare out-of-pocket costs for biosimilars and reference biologics and consult the provider to review clinical and financial considerations.
- Ask about coverage policies. Ask about step therapy or prior authorization to understand all requirements.
Conclusion
Biosimilars offer a cost-effective way to strengthen your health plan while maintaining access to quality care. Understanding coverage helps employees make informed decisions that fit their needs and budget. Download the bulletin for more details.
