A stark divergence in pharmaceutical access has emerged between Canada and the United States regarding generic versions of semaglutide, the active ingredient in blockbuster diabetes and weight-loss drug Ozempic. Canadian regulators approved a generic alternative this week, allowing patients to access the medication at a fraction of the brand-name cost. In the United States, however, no such generic has entered the market, leaving millions of patients exposed to list prices exceeding $1,000 per month. The disparity underscores fundamental differences in how the two countries approach drug pricing, with observers pointing to the United Kingdom’s National Health Service pricing model as a template for equitable access.
Ozempic, manufactured by Novo Nordisk, has become a global phenomenon due to its efficacy in managing type 2 diabetes and facilitating weight loss. Its high cost, however, has strained healthcare budgets and patient finances alike. In the US, the absence of generic competition is primarily attributed to patent protections and legal barriers that prevent lower-cost manufacturers from entering the market. A complex web of patents, including those covering the drug’s delivery device and method of use, has extended Novo Nordisk’s monopoly beyond the initial expiry of its compound patent. This practice, known as “patent evergreening,” has drawn criticism from patient advocacy groups and lawmakers.
Canada’s health regulator, Health Canada, took a different approach. By applying a more rigorous examination of patent claims and prioritising public health over commercial exclusivity, the agency authorised a generic version produced by a domestic manufacturer. The move is expected to reduce the price of semaglutide in Canada by up to 70 per cent, making it accessible to a broader population. Canadian officials framed the decision as a matter of equity, noting that the drug’s high cost had created a two-tier system where only the wealthy could afford sustained treatment.
The contrast with the United States is pronounced. Despite repeated calls from the Biden administration to lower drug prices, legislative efforts have stalled in Congress. The Inflation Reduction Act of 2022 introduced price negotiation for a limited set of drugs under Medicare, but Ozempic is not yet subject to these provisions. Meanwhile, the Federal Trade Commission has investigated alleged anticompetitive practices in the pharmaceutical industry, but no definitive action has forced generic entry for semaglutide.
International health economists have increasingly pointed to the United Kingdom’s NHS pricing mechanism as a model that balances innovation with affordability. Under the voluntary scheme for branded medicines and pricing, the NHS negotiates directly with pharmaceutical companies to set maximum prices based on cost-effectiveness. The system ensures that drugs like Ozempic are available at a fraction of US list prices, while manufacturers still generate sustainable profits. A recent report from the London School of Economics concluded that the UK model could serve as a benchmark for other nations seeking to curb excessive drug costs without stifling research.
Pharmaceutical industry representatives argue that high US prices incentivise the development of new therapies, and that generics should not be rushed at the expense of patent protections. They point out that the average cost of bringing a new drug to market exceeds $2 billion, and that weaker patent regimes could reduce investment. However, critics counter that the US system disproportionately rewards marketing and minor reformulations rather than genuine innovation. A 2023 study in the Journal of the American Medical Association found that almost 80 per cent of new drugs approved by the FDA offer no clinical advantage over existing treatments.
The Canadian approval has intensified pressure on US regulators to act. Advocacy groups such as Patients for Affordable Drugs have launched campaigns urging the Food and Drug Administration to expedite generic applications for semaglutide. Legislation has been introduced in Congress to limit patent evergreening, but its prospects remain uncertain.
For now, the divergence between Canada and the US highlights a fundamental choice: whether to prioritise market exclusivity or public health access. The UK’s NHS model, with its focus on value-based pricing, continues to attract interest from policymakers worldwide. As the global demand for semaglutide and other GLP-1 receptor agonists grows, the question of fair access will only become more urgent.
