Realizing the full potential of biosimilars will require coordinated action from pharmacy benefits managers (PBMs), health care providers, benefits professionals and policymakers. With the right shifts, it is possible to build a system where biosimilars truly fulfill their promise – giving patients greater access to treatments at lower cost. Here’s a closer look at four key barriers holding biosimilars back and what it will take to move forward.

Complex formulary structures

When biosimilars like Amjevita™ and Yusimry® – approved for a range of inflammatory conditions, including rheumatoid arthritis, Crohn’s disease, and psoriasis – entered the market, expectations were high for rapid uptake. But entrenched rebate agreements and long-term contracts have kept the original branded biologics (“reference products”) in preferred formulary positions. This often places biosimilars at a disadvantage, with higher patient costs and limited accessibility for providers.

Some recent shifts are promising. In April 2024, CVS Caremark removed Humira® from some of its preferred formularies and prioritized adalimumab biosimilars, leading to a rapid increase in biosimilar use, according to the company. Express Scripts followed suit in August, and Optum Rx announced plans to remove Humira from its preferred formularies by January 2025, recommending biosimilars like Amjevita as cost-effective alternatives. However, there are still other market forces at work that impact prescriber behavior. More on that below.

The paradox of high pricing

Another barrier to biosimilar adoption is the high wholesale acquisition cost (WAC) that many of these drugs carry at launch – an approach that contradicts their promise of affordability. Bringing biosimilars to market is expensive and manufacturers often set high initial prices to cover those investments. Unfortunately, this strategy limits early uptake and can create a commercial catch-22 of limited market share requiring higher pricing.

Creating a competitive environment will require pricing strategies that prioritize “starting gate” cost benefits. Increased transparency around WAC pricing and more competitive pricing models could enable biosimilars to better compete with brand-name biologics, ultimately helping to expand access to cost-effective treatments.

Strategic barriers created by market dominance

Brand-name biologics have built strongholds in the market that create complications for biosimilars. As alluded to above, market forces like “pay-for-delay" strategies and costly, lengthy litigation by brand manufacturers postpone the entry of lower-cost biosimilars, while rebate structures and targeted marketing tactics have long kept established drugs in preferred formulary positions.

Reforming rebate structures and contract negotiation terms is key to creating a fair marketplace. Without these changes, biosimilars will continue to face challenges competing on equal footing. Policymakers and industry leaders have an opportunity – and a responsibility – to step in and create a more balanced environment that supports cost-effective treatment options for patients.

Prescriber and patient awareness

Understandably, prescribers have been slow to adopt, given the complex array of choices, including differences in concentration, formulations, interchangeability and limited awareness. And without guidance from their prescriber — and compounded by direct-to-consumer advertising — patients may perceive biosimilars as the lesser, unproven option.

It will take targeted education efforts to build confidence in biosimilars. Studies have shown adoption rates rise when prescribers and patients clearly understand the benefits, safety and efficacy of these alternatives. Greater awareness can empower biosimilars to take on their intended role, improving affordability and access across the healthcare system.

Setting the stage for biosimilars to succeed

Every year, the slow adoption of biosimilars costs the health care industry billions – savings that could have been transformative. In fact, according to a recent analysis, broader access to Humira biosimilars could have saved the health care system up to $6 billion in one year.

While the barriers to biosimilars are clear, so is the opportunity to change course. With an expanding pipeline of biosimilars set to enter the market in the next few years, particularly for high-cost treatments in autoimmune disease and oncology, now is the time to act. Reforming formulary policies, fostering competition, committing to transparent pricing, and increasing awareness are crucial steps toward building a market where biosimilars can fulfill their promise.