Insurance Coverage of Biosimilars: Prior Authorization and Tier Placement Strategies

By Harriet Calvington
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When you’re prescribed a biologic drug for rheumatoid arthritis, Crohn’s disease, or psoriasis, you might expect your insurance to cover it - but what if your plan covers the biosimilar version just as strictly as the original? That’s the reality for millions of patients in 2025. Biosimilars are not generics. They’re not cheaper copies made in a lab. They’re complex, living-cell-derived medications approved by the FDA to work almost identically to expensive biologic drugs like Humira, Enbrel, or Lantus. Yet, despite being 10-33% cheaper and approved for over a decade, most insurance plans treat them the same way as the original - with heavy restrictions, high out-of-pocket costs, and long approval delays.

Why Biosimilars Are Different From Generics

Generics are simple chemical copies of brand-name pills. Biosimilars are made from living cells - like tiny biological factories. They’re not exact copies. They’re extremely similar, with no clinically meaningful differences in safety or effectiveness. The first one, Zarxio, got FDA approval in 2015. Since then, over 70 have been approved, and about 40 are actually on the market. But here’s the catch: even though they’re cheaper and just as safe, insurance companies rarely make them easier to get.

Take Humira. It’s one of the most prescribed biologics in the U.S., costing up to $5,000 per month. Eight biosimilars are now available. Yet, in 2025, 99% of Medicare Part D plans put Humira and its biosimilars on the exact same tier. That means if you switch from Humira to a biosimilar like Cyltezo, your monthly cost drops from $1,200 to $1,150. That’s not a savings. That’s a rounding error.

How Insurance Tiers Work - And Why They Block Savings

Most insurance plans use a tier system for drugs. Tier 1: cheap generics. Tier 2: brand-name pills. Tier 4 or 5: specialty drugs like biologics. That’s where Humira and its biosimilars live. These tiers don’t use fixed copays. They use coinsurance - you pay a percentage of the drug’s list price. So if the drug costs $5,000, and your plan charges 33% coinsurance, you pay $1,650 a month. Even if the biosimilar costs $4,200, you still pay $1,386. That’s still more than most people can afford.

Only 1.5% of plans put biosimilars on a lower tier than the original. That’s not a mistake. It’s policy. Pharmacy Benefit Managers (PBMs) - the middlemen between insurers and drugmakers - decide where drugs go on the formulary. And for years, they’ve kept biosimilars locked in the same high-cost tier as the brand. Why? Because the original drugmakers pay PBMs big rebates to keep their products on top. Biosimilars don’t have that money to spend. So even though they’re cheaper to produce, they’re not cheaper to access.

Prior Authorization: The Hidden Gatekeeper

If you want a biosimilar, you’ll likely need prior authorization. That’s a form your doctor fills out - often with lab results, treatment history, and proof you’ve tried other drugs first. For Humira, 98.5% of plans require it. For biosimilars? Also 98.5%. No difference. No bonus for choosing the cheaper option.

And it’s not just paperwork. The process takes 3 to 14 days. For someone in pain, that’s weeks of suffering. A 2024 survey found that 78% of rheumatologists spend 3 to 5 hours a week just handling these requests. One patient with severe arthritis waited 28 days because her plan forced her to try a biosimilar first - even though she’d already failed three other treatments. That’s step therapy: a rule that says you must try the cheaper drug before getting the one your doctor prescribed.

Doctor filling out paperwork while patient waits in pain; on the other side, a biosimilar slides to a lower cost tier.

Why Insurers Won’t Move the Needle

The math should be simple: if biosimilars cost less, insurance companies should push them hard. The Congressional Budget Office says they could save the U.S. healthcare system $54 billion over ten years. But in practice, the opposite is happening. Most insurers treat biosimilars like they’re risky experiments, not proven alternatives.

Take insulin biosimilars. Eight are approved. Only 10% of Medicare plans cover them. Meanwhile, 80% cover the original Lantus. Why? Because the manufacturer of Lantus pays PBMs to keep it on formulary. The biosimilars? They get ignored. Same story with Humira: even though eight biosimilars are available, only half of Medicare plans cover any of them. And the one that’s most covered - Cyltezo - only works for a low-dose version of Humira that almost no one uses.

Some PBMs are starting to flip the script. Express Scripts, OptumRx, and CVS Caremark now exclude Humira entirely from their 2025 commercial formularies. You can’t get it unless you appeal. But you can get three biosimilars on Tier 3 - with 25% coinsurance instead of 33%. That’s a real incentive. But it’s not about patient care. It’s about cost control. They’re not encouraging biosimilars because they’re better. They’re forcing them because the original is too expensive.

What’s Changing in 2025 - And What’s Not

There’s a shift happening. The Office of Inspector General (OIG) called out insurers in late 2024 for not giving biosimilars fair treatment. CMS responded by starting to track tier placement and prior authorization rules more closely. The Inflation Reduction Act gives them new power to penalize plans that discriminate against biosimilars.

But change is slow. In Europe, biosimilars make up over 80% of the market. In the U.S., it’s still under 25% for Humira. Why? Because here, money talks louder than science. Drugmakers pay rebates. PBMs protect them. Patients pay the price.

Still, there’s hope. As more biosimilars enter the market, competition will force prices down. And if CMS starts enforcing fair tiering, we could see biosimilars hit 40% market share by 2027. But that’s only if insurers stop pretending they’re the same as the original. They’re not. They’re better - cheaper, just as safe, and just as effective. They deserve better coverage.

Biosimilar superhero on trial against a money-covered Humira monster in a courtroom judged by an owl in CMS robes.

What Patients Can Do

If you’re on a biologic right now, here’s what you can do:

Ask your doctor: Is there a biosimilar version of my drug? Is it FDA-approved?
Call your insurance. Ask: Is the biosimilar on the same tier? What’s my out-of-pocket cost if I switch?
If you’re denied coverage, file an appeal. Cite FDA approval and clinical equivalence.
Check if your plan has a step therapy requirement. If so, ask for a medical exception.
Use patient assistance programs. Many biosimilar makers offer co-pay cards - even if your insurance doesn’t help.

Don’t assume your plan is helping you save money. Most aren’t. But you can fight for better.

What Providers Need to Know

Doctors and pharmacists are on the front lines. You’re the ones filling out the prior auth forms, explaining why a biosimilar won’t work for a patient, or fighting to get a switch approved.

Keep a list of approved biosimilars and their formulary status by insurer.
Document every delay. If a patient waits 30 days for treatment, write it down. That data matters.
Submit appeals with clinical evidence - not just patient requests.
Push for institutional policies that prioritize biosimilars when clinically appropriate.

Change doesn’t come from one doctor. It comes from hundreds speaking up.

Are biosimilars as safe as the original biologic drugs?

Yes. The FDA requires biosimilars to show no clinically meaningful differences in safety, purity, or potency compared to the original biologic. They go through the same rigorous testing as new drugs. Over 70 biosimilars have been approved in the U.S., and millions of patients have used them safely since 2015. Real-world data from Europe, where biosimilars have been used for over a decade, confirms their safety profile matches the reference products.

Why don’t insurance plans put biosimilars on lower tiers?

Most plans don’t because the original drug manufacturers pay Pharmacy Benefit Managers (PBMs) large rebates to keep their drugs on preferred tiers. Biosimilars don’t have that money to spend. So even though they’re cheaper to produce, they’re locked in the same high-cost tier as the brand. Only a few PBMs - like Express Scripts in 2025 - are now excluding the original drug entirely and pushing biosimilars as the only option.

Can a pharmacist switch my biologic to a biosimilar without asking me?

Only if the biosimilar is designated as "interchangeable" by the FDA - and even then, only in certain states and for specific formulations. Right now, only one biosimilar for Humira (Cyltezo) has interchangeable status - and only for the low-dose version, which is rarely prescribed. Most biosimilars require a new prescription from your doctor. Pharmacists can’t substitute them automatically like they can with generics.

How long does prior authorization take for biosimilars?

It typically takes 3 to 14 business days. Some plans process faster if your doctor submits all required documents upfront - like lab results, prior treatment failures, and a letter of medical necessity. Delays are common, especially for step therapy rules that require you to try the biosimilar first. For patients in pain or with active disease, even a week’s delay can worsen symptoms.

Can I get help paying for a biosimilar if my insurance doesn’t cover it well?

Yes. Most biosimilar manufacturers offer co-pay assistance programs - even if your insurance doesn’t cover the drug well. These programs can reduce your monthly cost to under $100, sometimes even $0. Check the manufacturer’s website or ask your pharmacist. Patient advocacy groups like the Arthritis Foundation and Crohn’s & Colitis Foundation also have financial aid resources.

Will my insurance cover a biosimilar if I switch from the original biologic?

It depends. Most plans will cover it - but only if you go through prior authorization and sometimes step therapy. Some insurers require you to try the biosimilar first before allowing you to go back to the original. Others will cover the switch if your doctor explains why the original isn’t working. Always get your doctor’s support and submit documentation. Don’t assume your plan will approve it automatically.

What’s Next for Biosimilars?

The future of biosimilars depends on policy, not just science. If CMS starts enforcing fair tiering rules under the Inflation Reduction Act, we could see biosimilars reach 40% of the market by 2027. If not, they’ll stay stuck in the same high-cost tier, with patients paying nearly as much as they did for the original. The technology exists. The savings are real. What’s missing is the will to make them accessible - not just approved.