Biosimilars in 2026: How Employers Can Save on High-Cost Biologics

For most of the past two decades, biologic drugs have been the fastest-growing line item in employer pharmacy spend — and the most resistant to traditional cost-management interventions. Biologics now account for over 50 percent of total pharmacy spend in many employer plans despite representing a small fraction of total prescriptions filled. The blockbusters in this category — Humira, Enbrel, Stelara, Eylea, Remicade, and others — have collectively cost employer plans tens of billions of dollars annually, with year-over-year price increases that consistently outpaced inflation.

That equation is changing rapidly in 2026. The biosimilar market — which spent its first decade as a slow-moving regulatory experiment with limited actual savings impact — has reached a point where it is genuinely reshaping the economics of biologic spending for employer plans. Multiple high-volume reference biologics now have biosimilar competition, the FDA’s regulatory framework has matured, and PBM and carrier coverage strategies are increasingly steering utilization toward biosimilar alternatives.

For employers, the practical question is no longer whether biosimilars matter to pharmacy spend — they do — but how to capture the savings opportunity in a market where PBM and carrier coverage decisions, formulary placement, and rebate dynamics significantly affect what portion of the available savings actually reaches the plan. This article walks through what’s changed, what’s available, and what employers should be doing about it for 2026.

What Biosimilars Are — and Why They Took So Long to Matter

A biosimilar is a biological product that is highly similar to an FDA-approved reference biologic, with no clinically meaningful differences in safety, purity, or potency. Unlike generic small-molecule drugs — which are chemically identical copies of their reference products — biosimilars are produced from living cell systems and cannot be made identically to the reference biologic. Instead, the FDA’s biosimilar approval framework requires demonstration of biosimilarity through extensive analytical, preclinical, and clinical studies.

This regulatory complexity is one reason biosimilar adoption has lagged generic adoption. The first biosimilar was approved by the FDA in 2015. The first biosimilar for Humira — the most commercially significant biologic in the U.S. market — wasn’t approved until 2016, and the first one didn’t actually launch in the U.S. until 2023, due to patent litigation that delayed market entry by years.

Three additional factors slowed biosimilar adoption in the U.S.:

• Interchangeability designation- The FDA distinguishes between biosimilars and “interchangeable” biosimilars — the latter designation requires additional studies and allows pharmacist substitution without prescriber involvement (subject to state law). For years, few biosimilars carried the interchangeability designation, limiting the pharmacy-level substitution that drives generic adoption.
• Manufacturer rebate strategies- Reference biologic manufacturers responded to biosimilar competition with substantial rebate programs offered to PBMs in exchange for preferred formulary placement. These rebates often kept the reference product on preferred tiers despite higher list prices, because the rebate flow benefited the PBM even when the net cost to the plan exceeded the biosimilar list price.
• Provider familiarity and prescribing patterns- Specialty providers prescribing biologics — rheumatologists, oncologists, gastroenterologists, dermatologists, ophthalmologists — built their practice around specific reference products. Switching established patients to biosimilars required clinical comfort, patient education, and administrative effort that providers were often slow to undertake.

These barriers are now substantially lower. Biosimilar adoption is accelerating, the FDA has streamlined the interchangeability pathway, and PBM and carrier coverage policies are increasingly willing to challenge reference biologic incumbency.

What Has Changed in 2026

The biosimilar market in 2026 looks materially different from the market of even three years ago, in several specific ways that affect what employers can do about pharmacy spend.

Multiple Biosimilars Available for Major Reference Biologics

The most consequential change is the breadth of biosimilar competition for high-volume reference biologics. Humira biosimilar competition that began in 2023 has expanded substantially, with multiple biosimilars now competing in the U.S. market at materially lower list prices than the reference product. Biosimilars for Enbrel, Stelara, Remicade, Avastin, Herceptin, Rituxan, and several oncology and ophthalmology biologics are now established with multiple competitors and meaningful price competition.

The pipeline through 2026 and beyond includes biosimilars for additional high-cost reference products including Eylea, Prolia, and Soliris, with launches expected to continue accelerating in the second half of the decade.

For employer plans, this means that the population of biologic prescriptions where biosimilar alternatives exist is expanding rapidly — and the savings opportunity from biosimilar steering is materially larger in 2026 than it was in 2023.

List Price Discounts Have Widened

Early biosimilars launched at list price discounts of 10 to 25 percent below the reference biologic — meaningful but not transformative. As the market has matured and competition among biosimilars has intensified, list price discounts have widened materially. Multiple biosimilars now launch at list prices 60 to 85 percent below the reference biologic.

These discounts don’t translate dollar-for-dollar to net cost savings for employer plans, because the rebate dynamics on the reference product also affect net cost. But the gap between gross list price and net cost has narrowed for biosimilars, and the underlying economics increasingly favor biosimilar adoption even after rebate adjustments.

Interchangeability Designations Are More Common

The FDA has streamlined the interchangeability pathway, and an increasing number of biosimilars now carry the interchangeability designation. This matters because interchangeable biosimilars can be substituted at the pharmacy level (subject to state law) without prescriber notification, mirroring the substitution dynamics that drive generic adoption rates.

For employer plans, this expands the population of biosimilar transitions that can occur through pharmacy-level substitution rather than through more administratively complex provider-level switching programs.

PBM Coverage Policies Are More Aggressive

Major PBMs and carriers have shifted toward more aggressive biosimilar steering in 2025 and into 2026. Policies that previously placed reference biologics on preferred tiers despite biosimilar availability have increasingly been replaced with policies that prefer biosimilars, require biosimilar trials before reference biologic authorization, or offer member cost-sharing differentials that incentivize biosimilar selection.

The pace and aggressiveness of this shift varies significantly by PBM. Employers should specifically evaluate their PBM’s biosimilar coverage policies rather than assuming uniformity across the market.

How Employer Savings Actually Work in the Biosimilar Market

The path from biosimilar list price discounts to actual employer plan savings is more complex than it appears. Understanding that path is essential to capturing the savings that should be available.

The Rebate Wall and Its Erosion

Reference biologic manufacturers have historically used rebates to maintain preferred formulary placement despite higher list prices. The rebate flow — typically 30 to 50 percent of list price — accrued primarily to PBMs and only partially passed through to plan sponsors, depending on contract terms.

When biosimilars launched at modest list price discounts, the math was actually unfavorable for biosimilar adoption in many PBM contracts: the reference biologic’s higher list price generated higher rebates, which the PBM retained or passed through, while the biosimilar’s lower list price generated correspondingly lower rebates. From a PBM revenue perspective, the reference biologic was often more profitable to dispense than the biosimilar — even when the net cost to the plan was higher.

This dynamic — the “rebate wall” that protected reference biologics from biosimilar competition — is eroding in 2026 for several reasons:

Wider list price discounts mean biosimilars are now substantially cheaper on a net cost basis, even accounting for the rebate differential on the reference product. The math has shifted from “marginal savings after rebates” to “substantial savings after rebates” for many biologic categories.

Transparent PBM contracting has expanded, with more employers — particularly self-funded plans — moving to PBM contracts that pass through rebates to the plan rather than retaining them at the PBM level. In transparent contract structures, the plan captures the full benefit of biosimilar list price discounts directly.

Manufacturer rebate strategies have responded to biosimilar competition by reducing rebate generosity over time, particularly as biosimilars have established themselves and reference biologic manufacturers face declining rationale for premium pricing.

The practical implication for employers: the savings available from biosimilar adoption depend heavily on the structure of the PBM contract. Employers in transparent PBM arrangements with full rebate passthrough capture substantially more of the available savings than employers in traditional spread-pricing or partial-rebate-retention arrangements.

What “Plan Savings” Actually Looks Like in Practice

For an employer plan with significant biologic utilization in categories where biosimilars are available, the realistic savings range from biosimilar adoption in 2026 typically runs:

For self-funded plans with transparent PBM arrangements: 15 to 30 percent reduction in net spend on the affected biologic categories, depending on the breadth of biosimilar availability for the specific products dispensed and the aggressiveness of the PBM’s coverage policies.

For self-funded plans with traditional PBM arrangements: 5 to 15 percent reduction in net spend on the affected categories, with much of the gross savings retained by the PBM through rebate dynamics.

For fully insured employers: Savings flow primarily to the carrier rather than to the plan in the current year, but improved utilization patterns can support more favorable renewal pricing in subsequent years.

These ranges reflect the practical reality that biosimilar savings opportunity is real but heavily mediated by contract structure. Employers who haven’t reviewed their PBM contracts for rebate transparency and biosimilar coverage policy in the past 18 to 24 months are likely capturing substantially less of the available savings than they could.

What Employers Should Actually Do About Biosimilars in 2026

The actionable items for employers fall into four categories.

1. Audit Your Current Biologic Spend by Category

Before making coverage or contract decisions, understand what your plan is actually spending on biologics and which categories have biosimilar competition. Request from your PBM or TPA a report showing:

• Total biologic spend for the most recent 12 months, broken down by therapeutic category
• Top biologic products by total spend, with member counts and per-member spend
• Biosimilar availability status for each top product
• Current formulary placement and member cost-sharing for each top product

This audit identifies where the savings opportunity is concentrated. For most employer plans, a small number of high-volume biologic products account for the majority of biologic spend, and the audit quickly reveals which categories matter most for plan economics.

2. Review Your PBM’s Biosimilar Coverage Policies

Request from your PBM a written summary of current biosimilar coverage policies for the top biologic categories in your plan. Specifically, confirm:

• Whether biosimilars are placed on preferred or equivalent formulary tiers relative to reference biologics
• Whether biosimilar trial requirements (step therapy) are in place before reference biologic authorization
• What the member cost-sharing differential is between biosimilar and reference biologic options
• What pharmacy-level substitution rules apply for interchangeable biosimilars
• What provider communication and education programs the PBM operates to support biosimilar adoption

If your PBM’s policies are materially less aggressive than industry leading practice — particularly if reference biologics retain preferred placement despite biosimilar availability — this is a structural issue affecting your plan’s ability to capture biosimilar savings.

3. Evaluate PBM Contract Structure for Rebate Transparency

The PBM contract structure determines what portion of biosimilar savings actually flows to the plan. For employers on traditional PBM arrangements with limited rebate transparency, the biosimilar adoption opportunity is materially limited by the PBM’s incentive structure.

Self-funded employers above 200 to 300 employees should be evaluating their PBM contracts at every renewal for:

• Full rebate passthrough provisions
• Audit rights to verify rebate flows
• Performance guarantees on biosimilar adoption rates and net cost outcomes
• Transparent administrative fee structures separate from rebate flows
• Reporting requirements that provide visibility into actual versus expected savings

Employers whose current PBM contract does not provide these elements have a contract structure issue that is limiting their ability to capture biosimilar savings, regardless of what coverage policies they adopt at the formulary level.

This connects directly to the broader transparent PBM trend covered in companion content on pharmacy benefit management strategy. The biosimilar opportunity is one of several reasons why transparent PBM contracting has become a meaningful priority for self-funded employers.

4. Communicate Effectively With Members on Biosimilar Transitions

Member communication is a critical and frequently underestimated element of biosimilar adoption. Members who have been on a reference biologic for years — particularly for chronic conditions like rheumatoid arthritis, psoriasis, inflammatory bowel disease, or oncology maintenance therapy — may be anxious about transitioning to a biosimilar even when clinical evidence supports equivalence.

Effective member communication addresses:

• The clinical equivalence basis for biosimilars in plain language
• The FDA approval process and the rigor of biosimilar testing
• The specific savings the member captures through biosimilar selection (typically reflected in lower copays or coinsurance)
• The clinical pathway for raising concerns or requesting reference biologic continuation when medically necessary
• The provider’s role in the transition decision

PBMs and specialty pharmacy partners typically provide member communication templates, but these often benefit from employer-level customization to reflect the specific population and communication channels the employer uses.

Specific Categories Where the 2026 Opportunity Is Largest

For employers prioritizing where to focus biosimilar adoption efforts, certain therapeutic categories represent disproportionately large opportunities in 2026.

Adalimumab (reference: Humira). Multiple biosimilars are now established in the U.S. market with substantial list price discounts. Humira historically represented one of the largest single line items in many employer pharmacy budgets. Biosimilar adoption in this category alone can generate material plan savings.

Etanercept (reference: Enbrel). Biosimilars are available with meaningful price competition. This category overlaps with adalimumab in indications and patient populations, and combined adoption strategies for both reference products typically maximize savings.

Ustekinumab (reference: Stelara). Biosimilar competition entered the U.S. market in 2024–2025, expanding substantially through 2026. Stelara represents another high-volume specialty biologic with significant employer plan exposure.

Infliximab (reference: Remicade). Mature biosimilar competition with multiple biosimilars established. While the absolute opportunity is somewhat smaller than newer biosimilar categories, this is a stable adoption opportunity for employers who haven’t yet implemented biosimilar steering in this category.

Oncology biologics (Avastin, Herceptin, Rituxan). Biosimilar competition is well-established in these categories, primarily affecting the medical benefit (infused medications) rather than the pharmacy benefit. For employer plans, this requires coordination with the medical benefits side of plan management — an often-overlooked component of biosimilar strategy.

Ophthalmology biologics. Biosimilars for ranibizumab (Lucentis) are available, and Eylea biosimilars are entering the market. For employer plans with members receiving ongoing ophthalmology biologic therapy — typically for age-related macular degeneration and related conditions — this category has rapidly expanding biosimilar opportunity.

Bottom Line

Biosimilars are no longer a deferred opportunity for employer pharmacy cost management — they are a current opportunity, with the 2026 market offering meaningfully more options, wider price discounts, and more aggressive PBM coverage policies than the market of even two or three years ago. The savings opportunity is real and substantial for employers with significant biologic utilization, particularly for self-funded plans with PBM contract structures that allow biosimilar savings to flow to the plan rather than being captured at the PBM level.

The practical work to capture the opportunity is not technically complex but does require active engagement: audit current biologic spend, review PBM coverage policies, evaluate PBM contract structure for rebate transparency, and support effective member communication on biosimilar transitions. Employers who have not done this work over the past 18 to 24 months are very likely leaving material savings on the table.

For employers building 2026 pharmacy strategy, biosimilars should be a priority discussion with the PBM and broker — not as a single agenda item, but as one of the dominant cost-management opportunities in the current pharmacy market.

Taylor Benefits Insurance Agency works with self-funded and level-funded employers on pharmacy strategy, including PBM contract review, formulary policy evaluation, and biosimilar adoption planning. If you’d like an assessment of where your plan stands on biosimilar readiness for 2026, contact our team for a consultation.