How commercial health plans define and apply step therapy requirements for interchangeable biosimilars versus reference biologics
2024: Growing focus on access procedures
Step therapy entered the biosimilar discussion well before interchangeability became routine. By 2024, national debate over prior authorization reform had taken off. KFF Health News noted that several insurers signed a six-part pledge to make approvals easier for doctor-recommended care. One element focused on simplifying prior authorization, the process where patients or clinicians seek plan approval before starting treatment. Step therapy works through that same process, patients must try one drug first before being cleared for another, such as a reference biologic.
The pledge was voluntary and, as KFF recognized, carried little enforcement power. That mirrors the flexibility commercial plans hold when setting utilization rules across drug classes containing both reference biologics and interchangeable biosimilars. With no binding standard, each plan decides how to handle sequence and substitution within its own benefit design.
Mechanics of step therapy in biologics
In practice, step therapy for biologics or biosimilars runs through the same workflow as any other prior authorization. The plan defines a covered sequence. Providers or patients submit requests, which the plan approves or denies by matching medical policy to formulary placement. The first covered product becomes “step one.” Any product off that step requires proof of failure or intolerance before it’s approved.
Plans interpret interchangeability differently. Some treat the interchangeable biosimilar as substitutable and assign it as the first step. Others keep the reference biologic first-line, moving the biosimilar later in the sequence, sometimes due to rebate arrangements or utilization patterns. Because no cited regulation specifies how that order must be set, sequencing stays a plan-level decision.
2025: Calls for clearer rules and accountability
By 2025, KFF reporting showed that financial and operational incentives still drove insurer behavior more than patient protections. Sabrina Corlette of Georgetown University’s Center on Health Insurance Reforms put it plainly: without firm rules or standards, insurers act in their financial best interests. That logic readily extends to interchangeable biosimilars. A plan can call products clinically equivalent while steering usage toward the one aligned with its negotiated contracts.
Operational implications for patients and pharmacists
Step therapy adds friction when documentation or system coding misfires. Providers may have to resend authorization requests even when interchangeability is established. Pharmacists sometimes face automatic rejections when dispensing biosimilars that federal law allows as substitutes but that still sit behind a plan’s internal step. These gaps show how cost-control frameworks often outpace the systems built to support them.
2026 and beyond: Uncertain evolution
Parallel findings from the GAO on Marketplace oversight strike a similar note. In 2024, the Centers for Medicare & Medicaid Services added tighter requirements for consumer consent in agent and broker transactions, with more controls planned for review in 2027. While that analysis centered on enrollment rather than biosimilars, it reflects a recurring pattern: regulation lags innovation. For now, commercial plan rules governing step therapy for interchangeable biosimilars remain patchwork until clear federal standards emerge.
Commercial insurers still set their own step sequences through internal formulary policy. Patients and prescribers must work through the prior authorization and appeal pathways each plan already outlines.
This article is for informational purposes only and does not constitute medical, legal, or insurance advice. Individuals should review their health plan documents or consult licensed professionals about specific coverage questions.