Most plan sponsors in Canada have already felt what GLP‑1 medications can do to drug plan spend. Ozempic became a household name overnight, and the numbers tell the story.

Public drug plan spending on Ozempic reached $662 million in 2023, up from $434 million the year before, and GLP‑1 drugs accounted for roughly 25% of the entire growth in that spending[i]. Private plans felt it too. Semaglutide held the top spot for private drug plan spend in 2023 and 2024[ii]. As claims climbed, insurers responded by introducing prior authorization criteria to ensure the drug reached the right patients. When Wegovy launched in March 2024 as the first semaglutide product approved specifically for chronic weight management, it reinforced why those boundaries mattered. Many plan sponsors assumed the worst was behind them.

It may not be.

Here is something most benefits conversations have not yet caught up to. Canada has become the first major Western market where patent protection on semaglutide, the active ingredient in both Ozempic and Wegovy, has expired. Not by design, but by accident.  The patent lapsed several years ago, and when data exclusivity also expired on January 4, 2026[iii], the door opened completely.

Health Canada received nine applications for generic semaglutide from several manufacturers. One stated publicly that it intends to use Canada as a launchpad for a generic. Versions could be in pharmacies in 2026[iii].

The natural reaction is relief. And on a per‑prescription basis, there may be some. Analysts suggest generic semaglutide could be priced as low as 35% of the current branded cost[iv]. For employees who pay out of pocket, that matters. For plan sponsors, the math is not that simple.

Obesity is a chronic condition, and these medications have real clinical value for the people who need them. Cost is only one part of the story. When drugs get cheaper, more people use them.

The size of the potential population matters here.  Statistics Canada’s Canadian Health Measures Survey shows more than two thirds of adults aged 18 to 79 now classify as overweight or having obesity, up from 60% before the pandemic. Obesity alone rose from 25% to 33% in that period[v]. That is the population these medications are built to treat.

Today’s branded prices act as a natural brake on demand. When that brake lifts, the question is not whether utilization increases. It is how much and how quickly.

We have seen this before. When drugs go generic, prior authorization criteria can loosen, more physicians feel comfortable prescribing them, and patients who could not afford the brand can access the treatment. Lower prices may not reduce total plan spending when demand is already this strong and the eligible population is already this wide. And volume is only the beginning.

More complexity is coming. Wegovy gained an expanded indication in late 2024 for reducing the risk of nonfatal heart attack in overweight adults with established cardiovascular disease[vi]. In December 2025, Health Canada approved a further indication for the treatment of a serious liver condition known as MASH[vii]. Every new approval increases the number of people who qualify.

Lower prices and expanded eligibility will broaden access. For employers, that is where the real cost pressure begins. A meaningful rise in GLP‑1 utilization will show up directly and quickly in renewal numbers. Statistics Canada has noted that obesity rates have climbed fastest among working‑age adults, particularly those between 18 and 39[v]. These are the people on employer plans.

These medications matter, and many people truly benefit from them. But the arrival of generics is not a signal to relax. It is a signal to take a fresh look at coverage criteria, understand what guardrails exist, and make intentional decisions about how your plan is set up for what comes next. The prior authorization rules that helped stabilize costs over the last two years may not hold up in a world where the price drops.

Plan sponsors should also be thinking now about mandatory generic substitution. When generics are available, plans that require members to use the lowest cost equivalent rather than the branded version will be in a better position to manage the per‑unit cost side of the equation. It will not solve the volume question, but it will prevent plans from overpaying for the same molecule.

The first wave of GLP‑1 cost pressure caught most employers off guard. The second wave is forming, and this time, you can see it coming. That is an advantage worth using.

Sources:

[i] Canadian Institute for Health Information. Canada’s public drug program spending reaches $18.4 billion in 2023, medications like Ozempic driving cost. cihi.ca, 2024.

[ii] Express Scripts Canada. 2025 Drug Trend Report. express‑scripts.ca, 2025.

[iii] CBC News. Cheaper obesity medications could come to Canada this summer, as Health Canada reviews generics. cbc.ca, January 6, 2026.

[iv] Global News. Generic Ozempic can be made in Canada as of next week. Will it be cheaper? globalnews.ca, January 2, 2026.

[v] Statistics Canada. The prevalence of overweight and obesity is on the rise in Canada: New results from the Canadian Health Measures Survey, 2022 to 2024. statcan.gc.ca, October 2025.

[vi] Benefits and Pensions Monitor. Health Canada approves Wegovy to reduce heart attack risk in adults with obesity. benefitsandpensionsmonitor.com, November 28, 2024.

[vii] Health Canada. Regulatory Decision Summary for Wegovy (semaglutide). Drug and Health Product Portal, Health Canada. Decision date December 10, 2025. dhpp.hpfb-dgpsa.ca.

Written by:
James Deware
Right Path Advisor
Selectpath Benefits & Financial