Beneva exec says biosimilars are the key to cost control
As newer therapies enter the Canadian market, particularly in the weight management and diabetes categories, private drug plan sponsors are facing mounting costs and forced to rethink their strategies without cutting core benefits.
The sharpest increase, as several insurers told Benefits and Pensions Monitor, is notably happening in the GLP-1 drug class, where medications like Ozempic, Wegovy, Monjaro and Zepbound are rapidly transforming treatment protocols and budgets.
For GreenShield, year-over-year cost growth for semaglutide was 44 per cent in 2024, noted JP Girard, executive vice president and head of GreenShield Insurance.
“This was driven by several factors, including the clinical effectiveness of these drugs and their expanded list of approved uses,” he noted. “Ozempic is now widely recognized as the best-in-class treatment for diabetes, while Wegovy is being used not only for weight management but also now cardiovascular event prevention as well. I think the commercialization of Wegovy in Canada last year has also contributed to the growth."
While costs in weight management drugs are rising, these therapies are also delivering substantial health benefits for plan members, asserted Girard, pointing to improved diabetes control and proactive management of obesity related conditions. That’s why he believes continued growth and plan member adoption of these drugs is quite likely.
“The other drug that we're actually also seeing some increased utilization is fertility treatments. This is reflecting an upward shift towards plan members starting their families a little bit later in life and suggests the growing need for plan sponsors to offer more robust family planning therapies,” he added.
Peter Ricci, manager of pharmacy programs at Co-operators, also agrees that GLP-1s dominate private drug spending.
“They’re still the kings and queens of Canada in terms of spending,” he said, adding he expects recently introduced and approved drug Zepbound to add even more pressure and movement in the space.
“Cancer drug spending is on the rise as well. We're watching for inflammatory conditions and drugs used to treat those conditions, which are still increasing. Biosimilar pricing is helping with the situation, but it still does encompass a large chunk of the spend,” he added.
Meanwhile, Marie-Hélène Dugal, Medavie Blue Cross’s national pharmacy strategy lead, noted in an email to BPM the biggest cost increases are driven by drugs used to treat inflammatory conditions, like rheumatoid arthritis, Crohn’s disease, and psoriatic arthritis.
While diabetes drugs account for the second highest spend on their drug plans, which has been driven largely by the popularity of GLP-1s in the past few years, she explained that growth has slowed, as plans have now implemented controls to ensure that they are only reimbursed for patients with diabetes.
“Weight management drugs are, however, growing much faster than any other category for chronic conditions, driven by the high demand for effective treatment,” she said in a statement.
Benoit Bilodeau, vice president of partner and sales at Beneva, pointed to a consistent pattern of double-digit growth in drug plan costs, driven less by rising prices per drug and more by the expanding number of claimants particularly for GLP-1 drugs.
“We have seen an increase of 50 per cent in total costs only on this,” he said, referring to GLP-1 medications like Ozempic and Wegovy. He projects another 25 per cent increase by the end of 2025, which would make these drugs account for as much as 5 to 6 per cent of Beneva’s total drug plan costs, a dramatic shift considering they were virtually absent from the cost equation just five years ago.
“It’s largely driven by number of claimants, and less by the cost per claimant, which is very interesting,” he said.
Similarly, Girard believes it's not the price of GLP-1 drugs that’s driving up claims costs but how widely they’re being used. He noted that the per-unit price hasn’t changed significantly but expanded indications and broad adoption are pushing volumes higher.
“I really think the commercialization, the effectiveness of the drugs and the utilization plans being open to covering them,” he said.
While some specialty drugs like Trikafta, used to treat cystic fibrosis, carry extremely high price tags, they impact a small pool of claimants and are easier to manage. Contrastingly, GLP-1 drugs serve large populations and are increasingly used for multiple chronic conditions, including diabetes, obesity, and now cardiovascular prevention.
He suggests this broader use may ultimately offset future costs.
“If you can reduce obesity and diabetes, the cost of the drug upfront will lead to better health outcomes and therefore reduce the costs in the long term for the plan,” he said.
Gerrit Marais, benefits consultant at PBI Actuarial, also emphasized that it's not just the sticker price but the volume of claims that’s impacting budgets.
“It’s not really a high-cost drug, it's more the mid-range,” he said. “But definitely something that’s actively on the rise, and that plan sponsors need to take note of.”
Beyond GLP-1s, costs for biologics treating autoimmune conditions, certain cancer therapies, fertility treatments, and mental health medications are also climbing. While Ricci highlighted the continued pressure from biologics for inflammatory diseases and ADHD treatments, Marais agreed, noting a structural issue with chronic disease management in an aging population.
“There’s an increase in prevalence of chronic conditions,” he said. “These drugs treat two of the most prevalent: diabetes and obesity.”
And despite the rising costs, plan sponsors aren’t retreating from coverage.
“Instead, they’re exploring alternative strategies to manage the rising costs more substantially. Plan sponsors are increasingly focused on prevention and early intervention,” noted Girard. “They could offer things like chronic disease management programs, nurse consultations, and nutrition support.”
Looking ahead, Bilodeau sees other categories gaining momentum, particularly cancer therapies and mental health treatments. He highlighted emerging, high-cost cancer vaccines and a rise in prescriptions for anxiety and depression, especially among younger Canadians. To help clients absorb these rising costs, Bilodeau emphasized Beneva’s push toward biosimilar substitution.
“We strongly believe that the most generous savings are based on biosimilar substitutions,” he said, adding that while other carriers may rely heavily on product listing agreements (PLAs) for savings, Bilodeau sees biosimilars as more transparent and sustainable.
“That’s the vision that we have,” he said.
