The Rise of GLP-1s in Canadian Benefit Plans

In recent years, there has been a dramatic increase in the use of glucagon-like peptide-1 (GLP-1) medications like Ozempic, Wegovy and others available on the market. Approximately 830 million people have diabetes worldwide; in Canada, 3.9 million people live with diagnosed diabetes. While drugs like Ozempic have been a staple for treating diabetes since it came to market in 2017, the entry of lower-cost generics this summer is shifting the landscape. Canada is the first G7 country to approve generic versions. This change is top-of-mind for plan sponsors because of the combination of high demand, evolving clinical uses, and the need to effectively manage drug plan budgets in 2026.

The employer's balancing act

Balancing member accessibility with long-term drug plan sustainability is a core tension in healthcare finance. Most employers want to ensure equitable access to the most meaningful treatments, but increased claims and rising costs are constant considerations as both health conditions and drug availability change. Keeping up with changes to ensure your organization has the right plan for the current market is therefore an important part of getting the balance right. 

As clinical indications for GLP-1s evolve beyond type 2 diabetes, towards conditions as wide ranging as heart health, kidney decline, and potential future uses for sleep apnea or metabolic disorders, there is potential for expanding patient eligibility. This can shift budget allocations away from older therapies and lead to increasing total utilization and spending. 

However, as generic brands come to market, there is potential to lower drug plan costs. In April 2026, Health Canada authorized the first generic semaglutide injection - the first G7 country to do so. Health Canada is also reviewing eight other submissions for generic semaglutide, which could have further impact on costs if more are approved. Generic drugs typically cost 25% less than their brand name counterparts, with the cost dropping a further 25% to 50% as more competitors enter the market. Drug plans save money by using generic substitutions and lower copay tiers for these cheaper options. That said, despite the lower cost for generic GLP-1s, a rise in use, expanding pipeline of drugs in development and broader indications mean a decrease in overall GLP-1 therapy plan spend is unlikely in coming years.  

Key GLP-1 considerations for plan sponsors

The Critical Role of Prior Authorization:

Insurers utilize prior authorization forms to ensure drugs are used for their approved clinical indications (on-label use). This process acts as a necessary safeguard to protect against cost inflation driven by off-label usage.

Coverage Complexity: 

Coverage can be complex, especially where off-label use is increasing and demand is high. Obesity drug coverage is not universal; many plan sponsors do not currently cover weight loss medications, and carrier approaches vary significantly. 

Staying Informed: 

With the market for GLP-1 due to change this summer, plan sponsors should check with their specific carriers to understand current policies on generic GLP-1 management and any potential restricted availability or waitlists.

The value of expert guidance 

While the rise of GLP-1s and generics represents a significant industry development, it is manageable with the right support. Policies, patent expirations, and regulatory implementation are shifting rapidly and constantly, making expert guidance vital. Working with your benefits advisor ensures you stay up to speed on industry projections and can make informed, data-driven decisions for your team. Proactive management, utilizing tools like prior authorization, and maintaining open communication with carriers and advisors are the best paths forward for a sustainable benefits plan.