Prescription drugs continue to be the fastest-rising cost to many employer-sponsored health plans. A major driver of those costs, especially in the specialty drug market, are biologic medications like Humira and Stelara.
Patents on many of the biologics developed in the 1990s and early 2000s to treat immune diseases, inflammatory issues, cancer, and diabetes have started to expire, opening the door to a classification of alternative drugs called biosimilars.
Like a generic drug, biosimilars can be used in place of the original, brand-name biologic. Unlike a generic drug, biosimilars are similar, but not identical to, their original biologic.
Integrating biosimilars into your business’ health plan presents opportunities and risks that could impact company healthcare costs and employee satisfaction. Here are four things that employers should know about biosimilars:
#1: Biosimilars vs. Generics
Biosimilars are meant to be an alternative option to an original biologic and are required by the FDA to show the same effectiveness and side effects. While they sound like generic drugs, biosimilars have important differences, said Andy Dum, Director of Commercial Pharmacy at Capital Blue Cross.
“Transitioning to biosimilars is not the same as transitioning to a generic drug,” Dum said.
Unlike generics, which are created from chemicals and are exact copies of a brand-name medication, biosimilars are produced using living cells.
In addition, not all biosimilars can be substituted by a pharmacist like generics can, because not all biosimilar manufacturers undergo the time-consuming process that is required by the FDA to gain what’s called “interchangeable” status.
#2: Impact on employee experience
Like many innovations, it has taken time for consumers to fully buy in to biosimilars. As a result, business leaders need to carefully consider how transitioning to biosimilars could impact their employee experience.
For starters, only 13 of the 71 biosimilars on the market (as of early 2025) have gained the FDA’s “interchangeable” designation. This can make transitioning to a plan that only includes biosimilars potentially disruptive for employees currently taking a biologic.
Provider surveys also show the medical community continues to have concerns about the disruption that switching to biosimilars can have on some patients.
#3: Cost Considerations
Biosimilars are generally cheaper than biologics, with cost savings ranging from 10% to 37%.
But in addition to the price of medication, there are multiple other factors that impact employer and employee costs in a group health plan, said Jamie Mazzocco, Director of Pharmacy Trade and Pricing at Capital Blue Cross. Business leaders should be wary of solutions that do not focus on the overall lowest net cost.
Contact the Capital Blue Cross pharmacy team to discuss the specific cost saving opportunities and potential risks of integrating biosimilars into your group plan.
#4: The Best Approach
To maximize value and minimize member disruption, Capital Blue Cross is including both biologics and biosimilars in its prescription drug formularies for 2025.
For employees, this offers the flexibility to work with their providers to determine the best treatment options for them.
For employers, this helps capitalize on the potential cost savings of biosimilars, while minimizing financial and customer experience risks that can arise when an employee cannot switch from a biologic to a biosimilar.
The biosimilar market is rapidly expanding, with a record 18 biosimilars approved by the FDA in 2024. “We will continue to evaluate the best approach and adjust when we feel that it can provide maximum value for our employer groups and minimal disruption for our members,” Mazzocco said.
