Insurance Coverage of Biosimilars: How Prior Authorization and Tier Placement Affect Access

When you’re prescribed a biologic drug like Humira for rheumatoid arthritis or Crohn’s disease, the cost can be staggering-often over $4,000 a month. Biosimilars, which are nearly identical copies of these expensive drugs, were supposed to change that. They’re FDA-approved, clinically proven, and cost 10-33% less. But if your insurance won’t cover them-or makes it harder to get them than the original drug-then the savings don’t matter. In 2025, biosimilars are still fighting an uphill battle not because of science, but because of how insurance plans are structured.

Why Biosimilars Are Different From Generics

You’ve probably heard of generic drugs. They’re cheap copies of pills like metformin or lisinopril. Biosimilars aren’t like that. They’re made from living cells-not chemicals-and even tiny differences in how they’re grown can affect how they work. That’s why the FDA requires much more testing for biosimilars than for regular generics. But once approved, they’re just as safe and effective. The problem? Insurance companies treat them like they’re risky, even though they’re not.

Take adalimumab-the active ingredient in Humira. By 2025, there were eight FDA-approved biosimilars for it. Yet only half of Medicare Part D plans covered any of them. And when they did, they often put them on the same tier as Humira. That means you pay the same out-of-pocket cost whether you get the original or the cheaper version. If Humira costs $5,000 a month and your biosimilar costs $4,200, your copay might still be $1,200. Where’s the incentive to switch?

Prior Authorization: The Hidden Gatekeeper

Nearly every insurance plan that covers biologics requires prior authorization. That’s when your doctor has to jump through hoops to prove you need the drug. For Humira, that usually means showing you tried and failed other treatments first. But here’s the twist: the same requirement applies to biosimilars. And in 98.5% of cases, the rules are just as strict-even though biosimilars are proven to work just as well.

Doctors report spending 3 to 5 hours a week just filling out these forms. One rheumatologist in Ohio told me she had a patient wait 28 days for treatment because her plan forced her to try a biosimilar first-even though the patient had already tried two other biologics without success. That’s not clinical judgment. That’s bureaucracy.

Prior authorization isn’t just slow. It’s inconsistent. One insurer might require a letter from your doctor. Another might demand lab results from six months ago. And if you’re on Medicare Part D, your plan changes every year. What was covered in January might be denied in July.

Tier Placement: The Cost Trap

Insurance plans use tiers to control costs. Tier 1 is your cheapest generic pills. Tier 4 or 5? That’s where biologics live. Most plans put Humira on Tier 5. And guess what? Most biosimilars are on Tier 5 too. Only 1.5% of plans put biosimilars on a lower tier to encourage use. That’s not a mistake. It’s by design.

Here’s how it works: if you’re on a Tier 5 drug, you pay 33% of the cost. For a $5,000 drug, that’s $1,650 a month. If your biosimilar costs $4,200, your share drops to $1,386. You save $264 a month. But you still pay over $1,300. That’s not a savings-it’s a burden. And for many patients, especially those on fixed incomes, that’s not worth the hassle of switching.

Even worse, some plans don’t cover biosimilars at all. In 2025, UnitedHealthcare, CVS, and Cigna still didn’t list any insulin biosimilars on their formularies-even though eight adalimumab biosimilars were available. That’s not about safety. It’s about contracts. Drugmakers pay PBMs (pharmacy benefit managers) big money to keep their brand drugs on top. And those PBMs don’t want to lose that income.

How PBMs Are Changing the Game

But something’s shifting. In 2025, Express Scripts, OptumRx, and CVS Caremark started excluding Humira from their national formularies entirely. That means if you want Humira, you can’t get it unless your doctor gets special approval. But if you want a biosimilar? It’s on a preferred tier-Tier 3-with lower coinsurance and fewer hoops to jump through.

This is a big deal. It’s no longer about encouraging biosimilars. It’s about forcing them. PBMs are using exclusion as a tool. If you can’t get the original drug, you have to take the cheaper version. It’s blunt, but it works. Early data shows that when Humira is removed from formularies, biosimilar use jumps by 40% in six months.

This strategy is spreading. The Congressional Budget Office estimates that if this trend continues, biosimilars could save the U.S. healthcare system $54 billion over the next decade. Right now, we’re on track to save only $1.8 billion a year because of the way coverage is set up. The difference? One is about patient choice. The other is about forcing the right decision.

What Patients Are Really Paying

Let’s say you’re on Medicare Part D. You’ve been on Humira for two years. Your monthly cost is $1,200. Your doctor suggests switching to a biosimilar. You check your plan’s formulary. The biosimilar is on the same tier. Your copay? $1,150. You save $50 a month. But now you have to go through prior authorization again. You have to refill your prescription through a specialty pharmacy. You have to call your doctor’s office every time your insurance changes its mind.

That $50 isn’t worth the stress. Especially when you’re already tired from managing a chronic illness. A survey by the Medicare Rights Center found that 62% of patients didn’t switch to biosimilars-not because they didn’t want to, but because the process was too complicated.

And it’s not just money. It’s time. One patient in Texas waited 11 weeks to get her biosimilar approved after her Humira was discontinued. She missed two months of treatment. Her arthritis flared. She ended up in the ER. That’s the hidden cost of bad coverage.

What’s Changing in 2025

The government is paying attention. In late 2024, the Office of Inspector General found that most Medicare plans still didn’t give biosimilars a better shot. In response, CMS started requiring plans to report how they place biosimilars on tiers. And in 2025, new rules under the Inflation Reduction Act are pushing PBMs to stop treating biosimilars like second-class drugs.

Some insurers are already ahead of the curve. A few Medicare Advantage plans now offer $0 copays for biosimilars if you’ve tried and failed the reference drug. Others have dropped prior authorization entirely for biosimilars. These are small wins-but they’re growing.

The real turning point? When biosimilars start appearing on Tier 2 instead of Tier 5. That’s when patients will actually choose them-not because they’re forced to, but because it makes sense.

What You Can Do

If you’re on a biologic and your doctor suggests a biosimilar, don’t assume it’s the same as switching from brand-name to generic. Ask these questions:

• Is the biosimilar on the same tier as the original drug? If yes, ask why it’s not on a lower tier.
• Do I need prior authorization for the biosimilar? If so, can my doctor skip it since it’s proven equivalent?
• What’s my out-of-pocket cost difference between the two? If it’s less than $100 a month, is the switch worth the hassle?
• Does my plan exclude the original drug? If yes, I might be forced into the biosimilar anyway-so ask about support programs.

Also, talk to your pharmacist. Specialty pharmacies often have patient assistance programs that can cut your costs by half-even if your insurance doesn’t budge.

And if you’re frustrated? Speak up. Call your insurer. Ask why biosimilars aren’t treated like the safe, effective alternatives they are. Patient pressure has already forced changes in insulin coverage. It can do the same for biosimilars.

What’s Next

By 2027, experts predict biosimilars will make up 40% of the biologics market-up from 23% today. But that only happens if coverage rules change. Right now, insurance is the biggest barrier-not science, not safety, not cost. It’s policy.

The goal was simple: make life-saving drugs affordable. Biosimilars were supposed to be the answer. But if insurers keep treating them like an afterthought, we’ll keep paying the same prices-and patients will keep waiting.