Semaglutide, sold under the brand name Ozempic, has become a blockbuster drug for diabetes and weight loss. But access to this medication varies dramatically across borders. In Canada, patients can purchase a generic version for a fraction of the US price. Why? The answer lies in regulatory frameworks and market structures that the UK health secretary is now scrutinising.
Canada’s Patented Medicine Prices Review Board (PMPRB) sets maximum prices for patented drugs, preventing manufacturers from charging what the market will bear. For semaglutide, the PMPRB determined a reasonable price based on cost effectiveness and therapeutic value. Once the patent for Ozempic expired, generic manufacturers could enter the market, offering a cheaper alternative. The result? A sixfold price difference: a month’s supply of generic semaglutide costs around USD 170 in Canada versus up to USD 1,000 for branded Ozempic in the United States.
The US, by contrast, lacks such a federal pricing board. Instead, prices are negotiated between manufacturers and private insurers, pharmacy benefit managers, and government programs like Medicare. This fragmented system often leads to higher prices, as manufacturers can leverage monopoly power during the patent period. Even after generics become available, US laws and market dynamics sometimes delay widespread adoption. For instance, the Hatch-Waxman Act allows brand-name companies to secure additional patents that extend exclusivity, a practice known as “evergreening”. Generic manufacturers must also navigate complex FDA approval processes and legal battles, which can push back market entry by years.
UK Health Secretary Wes Streeting has taken note. In a recent statement, he highlighted Canada’s success in delivering lower drug prices and announced a review of the UK’s own pricing mechanisms. “We cannot afford to let patients wait while pharmaceutical companies maximise profits,” Streeting said. The UK already uses a cost-effectiveness threshold through the National Institute for Health and Care Excellence (NICE), but does not directly cap prices. Streeting’s team is exploring whether a Canadian-style board could be implemented to accelerate access to generics.
The implications are vast. Ozempic and similar GLP-1 agonists represent a multibillion-dollar market. If the UK adopts price controls, it could trigger a domino effect across Europe, pressuring US policymakers to reconsider their hands-off approach. For patients, this is a matter of life and death: type 2 diabetes and obesity are chronic conditions that require sustained treatment. High prices lead to non-adherence, worsening health outcomes and increasing long-term costs.
Critics argue that price controls stifle innovation. The Pharmaceutical Research and Manufacturers of America (PhRMA) warns that lower prices reduce incentives for R&D. Yet Canada, with its smaller market, still sees novel drugs launch. In fact, Canadian patients often access new medicines faster than US patients, despite lower prices. The disconnect between price and innovation suggests that other factors, such as regulatory efficiency and market size, play larger roles.
What the UK health secretary does next will be closely watched. If he implements a PMPRB-style body, it could reshape the global pharmaceutical landscape. For now, the contrast between Canada and the US stands as a stark reminder: drug pricing is a policy choice, not a natural law. As climate change and resource scarcity tighten budgets, such choices become even more consequential. The urgency to deliver affordable healthcare mirrors the urgency to deliver clean energy. Both require systemic shifts, not incremental tweaks.
