Wegovy – a spinoff of the diabetes medication Ozempic – was first approved by Health Canada in 2021, but was not introduced to market until last May because of global supply challenges.Amanda Andrade-Rhoades/The Associated Press
A 91-per-cent surge in claims for weight-loss drugs is raising concerns about the sustainability of private medical insurance plans in Canada.
A Telus Health drug report published this week said patient claims submitted to insurers soared last year following the introduction of weight-loss drug Wegovy in Canada.
Wegovy – a spinoff of the diabetes medication Ozempic – was first approved by Health Canada in 2021, but was not introduced to market until last May because of global supply challenges.
The total claims paid out by Canadian insurers for weight management drugs nearly doubled last year, climbing to $77-million in 2024 from nearly $38-million a year prior.
The growing popularity of these drugs poses a problem for private benefit plans, which are funded by employers and have a direct impact on companies’ bottom lines.
Paul Sabat, a benefits industry veteran, said the rise in claims requires careful management by plan administrators.
“Balancing cost control with compassionate, forward-thinking care will require strategic design, evidence-based coverage, and better education around how and when these drugs should be used,” said Mr. Sabat, a group benefits adviser and managing partner of The Consulting House Inc., based in Vaughan, Ont.
“The stakes are high for employee health and the long-term sustainability of private drug plans.”
The surge in claims has made weight-management drugs – which do not include Ozempic, as it is classified under the diabetes drug category – the 17th most prescribed medication in Canada, up from 54th place in 2016.
The number of claimants who have been reimbursed for weight management drugs grew by 59 per cent while the average annual amount per claimant increased to $2,012 in 2024, compared with $1,572 in the year prior, according to the study.
The growth of these two metrics is expected to continue at a strong pace, the report said, as Wegovy attracts more first-time patients.
Mr. Sabat said if coverage continues to expand, so will the strain on benefit plans. He has been speaking daily to his clients about the rapid shift in weight-management drug claims, driven largely by medications like Wegovy.
A small number of the plan sponsors Mr. Sabat advises are removing their requirements to have weight-loss drugs authorized before claims can be submitted to improve access, hoping to boost overall health and reduce future costs. But others are tightening the approved list of prescription drugs covered by their health insurance plan or re-evaluating coverage altogether, a sign of how polarized the response is, he said.
“While there’s clear potential to improve health outcomes and reduce long-term claims, such as long-term disability or critical illness, the sharp rise in usage and high price point are putting serious pressure on drug plan sustainability,” he added.
Despite the popularity of weight-loss drugs globally, many private insurers in Canada do not automatically provide coverage for weight-management drugs.
Some employers have placed stricter controls around the coverage they offer for Ozempic, either only approving the drug for diabetic patients or placing maximum limits for reimbursement.
But that may be changing as weight-loss drugs are no longer classified as “lifestyle drugs,” said Vicky Lee, Telus Health’s director of pharmacy consulting and professional services.
“These types of drugs used to be a standard exclusion in many group plans but now there has been a shift in the medical community where weight management is being recognized as a more chronic condition and we are seeing more plans add coverage for this class of drug,” Ms. Lee said in an interview.
And the potential pool for Wegovy is large, she adds.
More than 30 per cent of Canadians are obese and another 36 per cent are overweight, according to the study, which cited a Statistics Canada report based on 2023 data.
Use of weight-loss drugs first began to creep higher in Canada with the launch of Saxenda in 2015 and Contrave in 2018. According to Telus Health, the two drugs target hormones that control feelings of hunger or satiety, and are cited in Canada’s clinical practice guidelines for obesity as effective treatments for weight loss.
Saxenda remains the most prescribed weight-loss drug, with 44 per cent of claimants using it. Yet, after just eight months on the market, Wegovy accounts for about 31 per cent of all claimants, according to the Telus Health report.
Telus said almost one in six Wegovy users had previously been using Saxenda. However, it wasn’t until the arrival of Wegovy – a drug capable of reducing body weight by 10 per cent to 15 per cent – that private insurers saw a sharp acceleration in the rates of growth for the weight-management category.
Ms. Lee says no new weight-management drugs are currently under review by Health Canada, leaving Wegovy as one of only a few available in Canada.
But that could change in the next two to three years as clinical trials for two other drugs – Zepbound and CagriSema – have found to reduce body weight by 20 per cent and 23 per cent, respectively.