Semaglutide, the ingredient in Ozempic and Wegovy, will soon move to generic status in Canada and consultants hope this sparks plan sponsors to take a proactive approach to weight management
Novo Nordisk’s unexpected loss of Canadian patent protection for semaglutide, the active ingredient in blockbuster drugs Ozempic and Wegovy, has left many in the group benefits space asking hard questions.
“It’s surprising,” said Gavin Mosley, a group benefits consultant at Mosley Group Benefits. “We don’t normally get news of a brand drug going generic prematurely.”
He sees this event not just as a business curiosity, but a flashpoint for larger systemic questions. Drawing parallels to drugs like Lipitor and Crestor, which took years to reach generic status, Mosley noted the deliberate pace at which most blockbuster medications move off patent.
He acknowledged the unavoidable interdependence between stakeholders in the health benefits system like pharmaceutical companies, insurers, employers, and advisors. He stressed that while frustrations over drug costs are valid, the industry requires collaboration, not blame.
That doesn’t mean there aren’t serious concerns. He points to the growing gap between the actual cost to produce a drug and the price attached to it, often based more on perceived value than manufacturing expenses.
“Should a drug have a Super Bowl ad? What are we really paying for here?” he said. “We want pricing to be stable on our side because the price of a drug is a direct impact to an employer's bottom line. Even though I don't work for pharma and I don't work for insurance companies, we have to represent them and convince companies to invest in their employees’ health and well being.
“When we see Ozempic, a major blockbuster drug go generic prematurely, it makes you wonder why, and what actually did happen. Was this an accident? Was it strategic? If it was strategic, I would have loved to be a fly on the wall in the boardroom to understand the inner workings of why,” he added.
In a statement emailed to Benefits and Pensions Monitor, Novo Nordisk said it’s incorrect to claim that generic versions will enter the Canadian market next year because of a missed maintenance fee.
“All intellectual property decisions are carefully considered at a global level. Periods of exclusivity for pharmaceutical products end as part of their normal lifecycle and generic treatments may become available over time,” said Novo Nordisk in a statement.
Meanwhile, Tim Clarke, president of tc Health Consulting, isn’t convinced by the idea that Novo Nordisk simply forgot to pay a fee.
“I personally can't imagine an experienced, top-notch company like Novo Nordisk to just forget to pay a fee,” he said.
Either way, the patents were set to expire in 2026 regardless, meaning the timeline shift is relatively minor in terms of market impact, he noted.
With semaglutide now expected to become significantly cheaper in Canada, Mosley is watching closely to see how plan sponsors respond and whether they’ll take the opportunity to go beyond cost-cutting. While the reduced price tag may look like a win on the surface, he warned that more important questions lie beneath.
Despite the World Health Organization recognizing obesity as a chronic illness, Mosley notes that stigma still shapes plan design. Many insurers treat anti-obesity drugs as elective, categorizing them as a “lifestyle drug,” leaving it up to employers to decide whether to include them.
That reluctance, he highlighted, is driven by one thing: cost.
Now, with generics on the horizon, the cost barrier may finally shift. But whether that translates into broader coverage remains uncertain. Mosley is curious to see how employers will react and wonders whether employers will reinvest the savings into more inclusive health benefits, or simply reduce their spend?
“I wonder if more progressive and proactive employers will take the opportunity to support the members who are struggling with obesity which leads to diabetes, heart conditions and co-morbidities with disabilities. It could open the door to something much better as the savings will shift from short-term to long-term when tackling larger health issues within an employee population,” he said.
As to the immediate consequences, Mosley believes there will be a competitive scramble ahead in the wake of Novo Nordisk’s patent loss, with both brand and generic players vying for position.
“It’s a race,” he said, predicting that Novo will likely follow an emerging trend in the pharmaceutical space: marketing a cheaper version of its own product to retain market share.
He pointed to what's happening with biologics transitioning to biosimilars as an example. In some cases, Mosley noted, manufacturers are simply relabeling the same product.
“The manufacturers [are] just marketing actual Stelara under a different name, and that is going to be the biosimilar of itself,” he said.
He expects a similar tactic with semaglutide, where “the generic of Ozempic will probably just be Ozempic.”
Still, he acknowledged that competition could erode Novo’s hold on the market. While some patients may prefer to stick with what they know due to concerns over new formulations or inactive ingredients, “they definitely won’t keep it all,” Mosley said.
Clarke also sees this as a chance to widen access and improve care. With employer cost concerns somewhat alleviated by expected price drops, he believes the heightened focus on the health benefits of weight management is an opportunity for employers to broaden drug coverage while also expanding health coaching and other supportive programs.
“Maybe this is an opportunity for plan sponsors to be more proactive rather than reactive to how they approach all elements of weight management moving forward... This will be a conversation for years to come,” he added.
While Novo Nordisk declined to comment on other manufacturers’ plans and sharing additional details about their patent strategy, they emphasized that they’re “the only company in Canada with Health Canada-approved products containing semaglutide, identified under the trade names Ozempic, Rybelsus and Wegovy,” adding they continue to support individuals managing diabetes or obesity.
