US agreement could cut costs of popular weight loss drugs. What does this mean for Canada?

A new agreement with major drugmakers unveiled by U.S. President Donald Trump on Thursday aims to expand coverage and cut prices for popular weight-loss drugs south of the border.

The deal with Eli Lilly and Novo Nordisk is set to expand Medicare coverage of two GLP-1 receptor agonist drugs, Zepbound and Vegovy.GLP-1 agonists — which include semaglutide drugs like Vegovy and Ozempic — are a class of drugs that mimic the GLP-1 hormone to help treat diabetes and obesity. They work by stimulating insulin release, slowing stomach emptying, and reducing appetite.

In the US, access remains limited due to spotty insurance coverage and high costs, which can exceed $500 US per month for high doses. So how much could Trump’s announcement actually cut costs? And will Canadians also benefit?

What impact will this have on US prices?

Starting next year, the drugs will be expanded to include people who are severely obese and others who are overweight or obese and have serious health problems, according to a senior Trump administration official. Those who qualify will receive a $50 US copayment.

Lower prices for people without coverage will also be phased in through the administration’s TrumpRx program, which will allow people to buy drugs directly from manufacturers starting in January. Administration officials say the average price of drugs sold on TrumpRx will start at about $350 US and then drop to $245 US over the next two years.

These reductions may seem big, but Canadian pricing is already low. Taking into account exchange rates, prices for GLP-1 drugs are already “pretty low” here, said Dr. Nisha Gupta, an endocrinologist and postdoctoral fellow at McGill University.

What about Canada?

But prices in Canada could fall even further in the coming year — for reasons that have nothing to do with the U.S. deal.

Canadians currently pay $300 to $500 per month for GLP-1 drugs, including semaglutide brands such as Ozempic and Vegovy.

Here, Ozempic is approved to treat diabetesHill Vegovy is approved for weight loss. In January, Novo Nordisk – the maker of both semaglutide brands – could effectively lose its market exclusivity in Canada, potentially opening the door to generic versions. CBC News first reported,

Mina Tadras, an associate professor who evaluatesA reduction in pharmaceutical prices at the University of Toronto estimates that the price for the same strength of semaglutide product could drop from $400 to less than $100.

But Gupta emphasizes that it’s not clear what kind of generic version will be available, because semaglutide is offered in different doses for different conditions at different costs.

Will this make medicines more accessible?

One thing is clear: GLP-1s are already extremely popular among the public, and also quite expensive in cost. The provincial drug plan has reasonable amounts.

Between 2017–18 and 2022–23, total prescription drug spending for Canada’s public drug plans is expected to increase by more than $3 billion, to more than $14 billion overall. Three antidiabetic drugs, including Ozempic, are ranked in the list of high-impact drugs, which collectively contribute about two per cent to the increase in drug costs, and Ozempic alone has more than 200,000 beneficiaries nationwide. A federal report shows,

It is possible that cheaper prices may lead more Canadians to seek prescriptions, including for off-label use in cases where these drugs are not covered by private insurance plans.

Gupta stressed that in Canada, semaglutide is not covered for many overweight patients, leaving some people paying out of pocket. (Although Wegovi is technically approved for obesity, patients must have at least one weight-related comorbidity such as high blood pressure, type 2 diabetes, or obstructive sleep apnea.)

“If semaglutide becomes generic, it will be something we can more easily offer to our patients who are overweight or (obese),” she said.

“Whether others will prescribe it for other things that are not approved is very much up to the physician.”