Generic semaglutide could improve diabetes treatment affordability in Canada

In a novel analysis examining the economic implications of generic semaglutide entering the Canadian market, researchers predict that the anticipated price reductions of up to 70% will dramatically increase both the cost-effectiveness and health system affordability of therapy options for patients with type 2 diabetes and high cardiorenal risk. The new study in the Canadian Journal of Cardiology, published by Elsevier, provides key evidence regarding reimbursement and formulary decisions.

Generic semaglutide, a glucagon-like peptide-1 receptor agonist (GLP-1RA), has recently become available in Canada after regulatory exclusivity for semaglutide expired in Canada in January 2026-years earlier than expected in the US and countries in Europe. Patients with type 2 diabetes and high cardiorenal risk are recommended to initiate a GLP-1RA and/or a sodium-glucose cotransporter-2 inhibitor (SGLT2i) according to Canadian and international guidelines.

The authors estimate that between 1.3 and 2.1 million people living in Canada may meet the Canadian Cardiovascular Society criteria for type 2 diabetes patients eligible to use GLP-1RAs or SGLT2is. The estimated annual cost of providing GLP-1RAs to all indicated patients would be $3.35 to $5.31 billion at pre-generic 2025 semaglutide prices. In Canada, these costs are typically paid by provincial or private drug insurance plans, but may be paid out-of-pocket when the drugs are not covered by a patient's insurance plan.

The high cost of brand-name versions of these GLP-1RAs has been a significant barrier to patients and provincial insurers. Anticipated price reductions from the introduction of generic semaglutide could substantially alter the health economic value of programs aimed at initiating SGLT2i and GLP-1RA therapies for patients with type 2 diabetes and high cardiorenal risk."

Ethan McNally, BA, first author of the study, McGill University School of Population and Global Health

Using a health economic microsimulation model to project lifetime costs, quality-adjusted life years (QALYs), and the burden of cardiovascular and renal comorbidities for this high-risk patient group, the investigators examined how the cost-effectiveness of GLP-1RAs changes across a range of possible prices.

Key economic modeling outcomes

Guided by the commonly used threshold of $50,000 per QALY in Canada, the most important findings are as follows:

• At a 60% reduction from the 2025 pre-generic semaglutide price paid by the Quebec provincial drug plan, combined GLP-1RA and SGLT2i therapy may become the preferred strategy for this guideline-indicated cohort of patients, compared to either therapy alone or other standard-of-care therapies.
• At a 70% price reduction, GLP-1RA is predicted to be cost-effective compared to non-SGLT2i standard-of-care therapies (cost-effectiveness ratio [CER] of $22,700). SGLT2i is still predicted to be preferred over GLP-1RA alone, but dual therapy is predicted to be more cost-effective than either option alone (CER of $31,700 for dual therapy vs. SGLT2i alone).

Given the rapid growth of GLP-1RA usage and their high costs, this analysis may provide evidence for reimbursement and formulary decisions. "Many provincial public drug plans limit GLP-1RA and SGLT2i reimbursement to patients who fail to meet glycemic targets. Multiple clinical guidelines now recommend these therapies for patients with type 2 diabetes at high cardiorenal risk, regardless of blood sugar levels. Given that our findings suggest that generic pricing may be cost-effective, payers could explore adjusting reimbursement criteria," notes lead investigator Abhinav Sharma, MD, PhD, DREAM-CV Lab, Research Institute, and Centre for Outcome Research & Evaluation, McGill University Health Centre.

These findings may generalize internationally, once generic semaglutide becomes available in other countries.

Co-lead investigator Alton Russell, PhD, McGill University School of Population and Global Health, and Centre for Outcome Research & Evaluation, McGill University Health Centre, concludes, "Our results are encouraging and provide further economic justification for the use of these therapies among appropriate patients with type 2 diabetes in Canada, which will significantly improve the quality of life, lower hospitalization costs, and ultimately protect patients from heart failure and kidney disease progression."