By Beckie Fenrick, PharmD, MBA, Chief Pharmacy Officer at Navion
Every major PBM has biosimilars on formulary. That doesn’t mean your groups are saving money on them. Formulary availability and actual utilization are two very different things, and the gap between them is where plan dollars quietly disappear.
The Biosimilar Market Has Matured and So Has the Savings Opportunity
Biosimilars aren’t new. What’s changed is how much the pharmacy benefit conversation has shifted around them, and how much more is now at stake financially for plan sponsors.
Early biosimilar activity in the U.S. played out largely on the medical benefit side. The moment that shifted attention to the pharmacy benefit was the introduction of biosimilar competition for Humira, the world’s best-selling drug, which faced a wave of biosimilar entrants over roughly a 12-month window.
Despite biosimilar availability, meaningful formulary movement away from Humira took well over two years. AbbVie’s contracting strategy, which created financial incentives for PBMs and health plans to maintain Humira’s preferred formulary status, slowed the transition. It wasn’t until mid-2024 that the market had largely moved on.
Stelara tells a different story. Biosimilar competition for Stelara launched in January 2025, and formulary changes came much faster. Biosimilar manufacturers learned from the Humira experience and entered the market with deeper list price discounts, most at 80% or more below Stelara’s list price, compared to the roughly 50% discount range seen early in the Humira biosimilar launch. PBMs and health plans responded more quickly, and the transition has been more compressed.
How Formulary Design Determines Whether Plans Actually Save
The financial opportunity in biosimilars is real, but it requires the right conditions.
Savings show up most clearly when formulary design actively drives utilization toward the biosimilar. When a reference product is excluded from the formulary entirely, or when meaningful cost-share differences exist between biosimilar and reference products, members and prescribers have a reason to make the switch. When both options carry the same flat-dollar copay, that incentive disappears and the lower-cost option often doesn’t get used.
The highest-impact categories right now include drugs used for inflammatory conditions (think adalimumab and ustekinumab biosimilars), bone health medications like denosumab, and oncology support therapies for managing chemotherapy-related side effects. Specific opportunity depends on the population, which is why reviewing actual utilization data matters.
Why Rebates Complicate the Biosimilar Decision
Rebate dynamics have added a layer of complexity to biosimilar adoption from the start. When a reference product carries a significant rebate tied to its formulary position, that rebate can make the reference product appear more financially competitive on paper, even when the biosimilar’s list price is dramatically lower. But what’s actually behind those rebate dollars isn’t always clear to plan sponsors.
In the current structure, most employer groups see rebates as an aggregate, a bucket of dollars reconciled at the end of the period, not as a drug-by-drug breakdown that would let them evaluate whether keeping a reference product on formulary is actually the right financial call.
That’s starting to change. Under the Consolidated Appropriations Act, many self-insured employers should begin to see more direct reporting on what they’re actually paying at the drug level, making it easier to assess whether rebate-driven formulary decisions are truly serving the plan’s interest.
Vertical Integration: What Plans Should Know
Some PBMs operating within vertically integrated health systems, where the PBM, pharmacy and drug distribution arm are all part of the same organization, have introduced their own private-labeled biosimilars. This creates a dynamic worth questioning. In some cases, the list price on these house biosimilars is set higher than comparable products in the market, which can affect how PBM discount guarantees are calculated and make it harder to assess the true net cost.
The full picture isn’t always visible to plan sponsors, and that’s where having an independent partner to evaluate the real net cost becomes important.
Questions Employers Should Be Asking Their PBM Right Now
Regardless of which PBM a group is with, there are a few questions worth asking now:
- Which biosimilars are on the formulary, and how is the reference product positioned relative to them?
- Is there a cost-share differential that gives members an incentive to use the biosimilar?
- What’s the actual biosimilar dispensing rate for key drug categories?
- When a formulary change is made, what outreach and support is provided to patients and prescribers to make the transition stick?
That last point matters more than it might seem. The most successful biosimilar conversion strategies aren’t passive. The most successful biosimilar strategies pair a clear formulary change with advance communication to prescribers and pharmacist-level patient education, so that when the switch happens, it’s supported, not just mandated.
The Bottom Line
Biosimilars are delivering real savings for plans that have structured their formularies and benefit designs to capture them. The question isn’t whether biosimilars work. It’s whether your PBM partner is positioned to drive utilization and whether your benefit design is set up to support that outcome.
If you’d like to evaluate how your current PBM is managing biosimilar utilization, reach out to Navion to continue the conversation.
