Christine Johnston on biosimilar interchangeability and PBM formularies

Proposed legislation that would make approved biosimilars interchangeable wouldn’t change pharmacy benefit manager (PBM) operations overnight, but it could force PBMs to justify keeping higher-cost brands in preferred formulary positions, according to Christine Johnston, general manager of Foundational Pharmacy Strategies. Johnston spoke with Managed Healthcare Executive about the bills under consideration in Congress.

Today, pharmacists can automatically substitute a generic for a brand-name drug without asking the prescriber, Johnston said, but a biosimilar that isn’t designated as interchangeable requires a new prescription. Interchangeability would remove that step. “It definitely makes it a lot easier because then you don’t have to convince the physician to change what they’re doing,” she said. A biosimilar would still need to clear formulary and pharmacy and therapeutics committee review, however, and PBMs would need to move away from brand-over-generic strategies that keep rebated brands preferred, as with Synthroid over levothyroxine today.

Johnston supports making biosimilars interchangeable. Concerns about how they are manufactured once raised quality questions, she said, but numerous international studies have shown they achieve the same results. “I think right now we’re in a good position to allow biosimilars to be interchangeable,” she said.

Easier substitution would push PBMs and manufacturers to show a clinical advantage before keeping an originator product in preferred status, though she expects a fight. Her bigger concern is broader: comparing cost-effectiveness across an entire therapeutic class rather than drug by drug. With Enbrel, Humira, Skyrizi, Rinvoq, Tremfya and now biosimilars in the same class, the question is which drugs are preferred, why they are clinically better and whether their added cost is justified.

The distinction between biosimilar and interchangeable still matters, she said, because these drugs treat very specific conditions, including rheumatoid arthritis, psoriasis and Crohn’s disease, and a biosimilar may not be used in pediatric Crohn’s disease, for example. Interchangeability can broaden the reach of biosimilars across those conditions.

Johnston pointed to the Consolidated Appropriations Act, 2026, as potentially more far-reaching. Under it, she said, a PBM that prefers a higher-cost drug over a lower-cost one must justify that choice. Combined with interchangeability, that could have “a huge impact on our ability to increase the utilization of biosimilars.”

Today, PBMs aren’t required to explain why high-cost brands see more use than cheaper biosimilars or to share net costs after rebates, she said. The law has been enacted but hasn’t gone through rulemaking, and Johnston worries it could get “watered down” in that process.

In this video, Johnston discusses what biosimilar interchangeability and PBM reform could mean for formulary strategy.