With Canada approving 1st generic semaglutide, how will costs compare?

Health Canada approved the first generic version of brand-name semaglutide drugs like Ozempic on Tuesday, becoming the first G7 country to do so.

Manufactured by Dr. Reddy’s Laboratories in India, the injectable medication has been approved for once-a-week treatment of Type 2 diabetes in adults.

The generic semaglutide drug is sold under the brand name “Obeda” in India and was submitted for review to Health Canada in early 2024.

Health Canada stated in a press release that eight other submissions are currently under review for generic semaglutide.

Dr. Hertzel Gerstein, a professor in the medicine department at McMaster University and a diabetes physician, said that there is not much difference between name-brand and generic semaglutide drugs.

“When Health Canada approves a generic version of a drug, they go through a very rigorous process and ensure that the drug that they’re approving is as close to the original drug chemically as it can possibly be,” he said. 

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According to Felix, a Canadian integrated health-care platform, the average cost of Ozempic injections can be between $200 and $450 per month, depending on each Canadian province.

The price of Mounjaro ranges between $300 and $550 per month in Canada.

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Wegovy’s current list price is expected to cost $5,066 per patient per year, or roughly $400 per month.

According to the pricing structure of the pan-Canadian Pharmaceutical Alliance, the first generic version of a medication typically costs 75 to 85 per cent less than the brand name.

Once a second generic version of a medication enters the market, the price for both typically drops to 50 per cent. When there are three or more generic products available in Canada, the cost typically decreases to about 35 per cent of the brand-name price.

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Health Canada also said that many generic medications are 45 to 90 per cent cheaper than brand-name versions.

“The numbers I’ve heard are anywhere from like $40 to $80,” Dana Small, a neurology and neurosurgery professor at McGill University, said. “That’s a major decrease in cost.”

Small also stated that the lower price range for generic products is “great for the research community” for advancing research in other fields.

Gerstein said that the process of approving generic GLP-1 drugs into public drug plans can differ from each province, and it’s not yet clear whether generic semaglutide will be covered.

“It just depends on each provincial review of whether they include it or don’t include it as part of their drug benefits for people who are eligible for the drug benefit program.”

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Small also added that it makes sense economically to include generic GLP-1 drugs into insurance plans.

“I think it will overall benefit the health system with reducing costs related to obesity treatment, cardiovascular disease,” she said. “I think the cost-benefit analysis will come out that there is a net gain because of the prevention of all the chronic diseases in the hospital and care costs associated with that.”

However, Small also urged caution for those thinking of going on the drugs.

“It depends on each person, and once you start taking the drugs, you can lose a lot of weight. You can really improve glucose control. But the moment you stop taking it, everything goes back to the way it was,” she said. “So, it’s something that you need to stay on it in order to continue with the benefits.”

“It’s a long-term commitment.”