Public and private drug plans in Canada are facing growing pressure over how to fund GLP-1 drugs, such as Ozempic, as demand extends beyond diabetes to obesity and weight management.
In Ontario and most other provinces, publicly funded coverage for semaglutide injections remains limited to type 2 diabetes, leaving patients who use the drugs for obesity to pay out of pocket or rely on private benefits, according to a report from The Canadian Press. That gap is illustrated by the case of 77‑year‑old Anne Welch of Paris, Ont., whose physician agreed Ozempic could help her lose weight but who does not qualify for coverage because she does not have diabetes.
Welch, who retired from a physically demanding job at the local SPCA and has an underactive thyroid, said “the weight just started piling on” after she stopped working.
Her physician was “more than happy to prescribe” a GLP‑1, Welch said. But because she does not have diabetes, Ontario’s public drug plan will not cover Ozempic. Like other provincial plans, Ontario restricts publicly funded semaglutide injections to type 2 diabetes, the Health Canada–approved indication referenced in most formularies, and does not reimburse them for obesity alone.
Living on Canada Pension Plan and Old Age Security, Welch said she cannot afford several hundred dollars a month out of pocket. Meanwhile, she has watched her husband, who has diabetes and qualifies for public coverage, lose 30 to 40 pounds on Ozempic and keep it off.
“It’s very frustrating,” she said.
Data from the Canadian Institute for Health Information (CIHI) showed Ozempic has become the single largest driver of growth in public prescription drug spending, accounting for about $807 million of the $20.1 billion spent by public plans and responsible for 8.5 percentage points of a 9.2% annual increase.
CIHI and other analyses indicated that much of the recent increase in public drug plan spending is coming from biologics and higher‑cost specialty drugs, including treatments for diabetes and obesity. That fiscal backdrop helps explain why most public plans have so far limited GLP‑1 coverage to diabetes, even as evidence for weight‑loss and cardiometabolic benefits in people with obesity has grown.
Megha Poddar, an endocrinologist and assistant clinical professor at McMaster University in Hamilton, said cost is the biggest barrier for patients who do not have diabetes but need GLP‑1 medications for obesity treatment.
“A lot of the generics conversation is actually coming from us as health-care providers to say, ‘hey, we know that this isn't an option for you right now because of cost but it will likely be an option for you very soon because of the generics and the hopefulness around reduction in cost,’” Poddar said.
In the private market, GLP‑1 coverage is expanding but remains tightly managed, the report said. A 2025 pulse survey by the International Foundation of Employee Benefit Plans found most Canadian employers now cover GLP‑1s for diabetes, but coverage for weight‑loss indications is far less common and usually comes with conditions such as prior authorization, BMI thresholds and step therapy.
Consultants reported that GLP‑1s have become some of the fastest‑growing cost drivers on employer plans, prompting some sponsors to introduce annual caps or carve‑outs, and others to frame access as part of a broader cardiometabolic and disability‑prevention strategy.
For individuals like Welch who do not have private coverage, however, the reality is binary -- pay full retail or go without.
Welch is now pinning her hopes on generic semaglutide. Nine generic versions are currently under review by Health Canada, following the expiry of key protections for the originator product in early 2026.
Generic semaglutide would come to market under the pan-Canadian Pharmaceutical Alliance's tiered pricing framework. For non-oral dosage forms, public plans generally pay 75% to 85% of the brand price for the first generic, dropping to around 50% once a second product is listed and to roughly 35% when three or more generics are available.
How that translates into actual out‑of‑pocket costs will depend on manufacturer pricing, pCPA negotiations and whether private and public plans list the generics broadly or maintain current diabetes‑only restrictions.
Health Canada spokesperson Marie‑Pier Burelle said the regulator is “on track to meet review targets for generic semaglutide drug submissions,” with an initial review timeline of about six months, not including additional time for companies to respond to data requests. She noted that generic semaglutide applications are complex because the originator is a biologic, while the generics are complex synthetic products that must be shown to be pharmaceutically equivalent without compromising safety or efficacy.
The coming wave of semaglutide generics creates both risk and opportunity. Lower unit prices could make it more feasible to expand coverage beyond diabetes, but wider access would likely increase overall utilization and push total plan costs higher unless offset by health‑outcome gains.
US modeling by Blue Cross Blue Shield suggests that broad GLP‑1 coverage could add measurable pressure to employer premiums over the next decade, depending on uptake and duration of therapy. Canadian actuaries and benefits consultants are now running similar scenarios as they prepare for generic entry and revisit plan design.
Until those generics arrive and new coverage norms emerge, patients like Welch remain caught between strong clinical demand for GLP‑1s and funding frameworks that are still playing catch‑up — and insurers and sponsors will remain under pressure to balance access, affordability and long‑term health outcomes, the report said.
