Lockton Canada’s first market update hands plan sponsors a rare window to rein in drug spending
Canadian employers covering GLP-1 drugs for both diabetes and weight loss reached 37 percent in 2026, more than double the 17 percent recorded in 2024.
International Foundation of Employee Benefit Plans survey data published in July, cited in the inaugural Lockton Canada Market Update released in October, frames generic semaglutide as an opening to manage costs in one of the fastest-growing areas of drug spending while reassessing broader benefits strategies.
Canada became the first G7 country to authorize a generic version of semaglutide in April.
By late June, Health Canada had authorized three generic semaglutide products, including the first indicated for chronic weight management, with six additional generic submissions under review at that time.
Health Canada has indicated that generic medicines can create potential cost savings, though the impact on any particular employer plan will depend on product availability, plan design, formulary decisions and applicable substitution rules.
“Drug-cost inflation isn’t necessarily a one-way trend; plan design, generic substitution and formulary management can materially change the trajectory,” the report states, a position that echoes warnings about how open formularies expose plans to escalating costs.
Alberta Blue Cross, in a February media release cited by Lockton, expects GLP-1 therapies and a growing number of other high-cost specialty medications to keep driving costs up, and warns that savings from generics and biosimilars will not be enough to offset them.
Lockton recommends plan sponsors review plan design and generic substitution requirements so savings from generic semaglutide are captured as lower-cost alternatives become available, and reassess coverage strategies for GLP-1 medications as falling prices change the economics of coverage decisions, particularly for weight-loss programs.
Employment declined by 42,000 in August while the unemployment rate held at 6.4 percent, according to Statistics Canada data from September cited in the report.
Skilled trades continue to be difficult to recruit and retain even as labour market conditions soften more broadly.
Benefits, disability and health-related claims continue to be significant cost drivers for employers.
A TELUS Health survey from September, also cited by Lockton, found one in five Canadian workers say money worries have affected their productivity, while nearly two-thirds want more support with retirement planning, pensions and savings, findings consistent with earlier evidence that financial stress is eroding workplace productivity in Canada.
The report tells employers to consider whether financial wellness resources, benefits communication and employee support programs are addressing the workforce pressures most relevant to the organization, and to monitor disability trends, claims experience and workforce demographics as changing demographics, health needs and economic conditions all affect future benefits costs.
Stéphane Lespérance, CEO of Lockton Canada, said Canadian businesses face an environment where risks “can no longer be assessed in isolation.”
Lespérance said organizations should reassess their exposures and “challenge assumptions” on a regular basis.
