In a Dutch oven, cook sausage over medium heat until no longer pink, breaking into crumbles (do not drain), 8-10 minutes. Add flour, pepper, sugar and salt; cook and stir until blended, about 2 minutes.
Stir in milks; bring to a boil. Reduce heat; simmer, uncovered, until thickened, 3-5 minutes, stirring occasionally. Serve with biscuits.