The healthcare landscape is facing a critical challenge as the GLP-1 drug boom strains employer drug plans, while generic alternatives lag behind. This issue is a ticking time bomb for plan sponsors, who are scrambling to manage the surge in specialty drug costs before they explode.
GLP-1 drugs, initially developed for diabetes treatment, have now become a central concern for employer drug plans in 2026. Plan sponsors are witnessing the impact of GLP-1 receptor agonists not only for type 2 diabetes but also for weight management. The pipeline reveals an expansion into conditions like metabolic dysfunction-associated steatohepatitis (MASH) and obstructive sleep apnea (OSA), with a second wave targeting obesity and multiple cardio-renal and metabolic co-morbidities.
MASH, affecting an estimated 5-6% of Canadians, is a silent threat. Studies show that roughly one in three overweight or obese individuals may have this condition, which can progress to cirrhosis, liver cancer, or the need for a liver transplant if left untreated. Wegovy, a GLP-1 drug, uses the same dosing for MASH as for its existing indications, costing approximately $5,000 per year. OSA, affecting about 20% of Canadians, often goes undiagnosed and increases cardiometabolic risk. Maintenance dosing for OSA could cost between $6,800 and $9,800 annually.
Late-stage products like Maridebart, CagriSema, high-dose semaglutide 7.2mg, forglipron, retatrutide, and survodutide are targeting obesity, cardiovascular disease with obesity, chronic kidney disease, back pain, osteoarthritis, MASH, and other complications. While most of these drugs are not yet approved by Health Canada, their trial status indicates continued pressure on drug budgets as their indications expand beyond diabetes and obesity.
Generic entry, although helpful, will only provide marginal relief. Generic versions of liraglutide and semaglutide are expected in 2026, but generic semaglutide has already been delayed until mid-2026. Novo Nordisk has also received Health Canada approval for Plosbrio and Poviztra, formulations identical to Ozempic and Wegovy, with pricing expected to be lower than the originals to compete with generics. However, given the rising utilization, more indications, and new molecules, the overall GLP-1 spend is unlikely to decrease.
High-cost biologics are following a similar trajectory, moving into chronic, high-prevalence conditions with long treatment durations. In respiratory disease, depemokimab, under Health Canada review, is positioned as the first ultra-long-acting biologic for obstructive airway disease, requiring dosing only every 6 months instead of every 2-4 weeks. It is submitted as an add-on maintenance treatment for type 2 inflammatory asthma in adults and adolescents, and for adults with chronic rhinosinusitis with nasal polyps.
Existing biologics are also expanding their indications, which will increase eligibility: Dupilumab (Dupixent), already used for atopic dermatitis and other conditions, is now approved for eosinophilic COPD and chronic spontaneous urticaria, costing an estimated $23,500 annually. Mepolizumab (Nucala) is under review for eosinophilic COPD, with current dosing costing about $26,000 per year. Tezepelumab (Tezspire) is under review for chronic rhinosinusitis with nasal polyps, at approximately $24,000 per year.
In neurology, two products have the potential to impact high-cost, long-term care pathways. Tolebrutinib, an oral Bruton's tyrosine kinase inhibitor, is under review for non-relapsing secondary progressive multiple sclerosis (nrSPMS) to slow disability progression. If approved, it would be the first therapy specifically for nrSPMS, filling a significant treatment gap. Pricing remains unknown.
Leqembi (lecanemab), approved in October 2025 at around $32,000 per year, is the first disease-modifying therapy for Alzheimer's disease. Its use requires specialized clinicians, MRI imaging, genetic testing, and infusion infrastructure. Treatment should be discontinued once patients progress to moderate disease, which has implications for disability, long-term care, and coordination with public programs.
Other examples under Health Canada review include Imaavy for generalized Myasthenia Gravis, costing approximately US$324,480 per year for a 75kg person, Tryngolza for familial chylomicronemia syndrome at about US$595,000 annually, Yorvipa for hypoparathyroidism at about US$285,000 per year, Lyvdelzi for primary biliary cholangitis at around $86,000 per year, and Voxzogo for achondroplasia at about $320,000 per year. These products require strict criteria, mandatory use of public funding, and strong case management.
In this landscape, generics and biosimilars remain key tools. The Pan-Canadian Tiered Pricing Framework allows oral solid generics to drop to as low as 25% of the brand price when three or more competitors are on the market, and to 35% for other dosage forms. Notable first-entry generics under review include products for diabetes (Invokana, Jardiance, Synjardy, Trajenta, Jentadueto), cardiovascular disease, central nervous system conditions, and fertility. A golimumab biosimilar to Simponi is also under review; Simponi costs about $18,000-$20,000 per year, so biosimilar competition should reduce spending for inflammatory conditions like rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, and ulcerative colitis.
But here's where it gets controversial: With the rising cost of specialty drugs, how can we ensure access to necessary treatments while managing the financial strain on employer drug plans? And this is the part most people miss: The impact of these drugs extends beyond just the cost - it affects disability, long-term care, and the coordination of public programs. So, what's your take on this? Do you think generics and biosimilars are enough to address this issue, or do we need more innovative solutions? Share your thoughts in the comments below!
