Prescription drug coverage continues to be a top cost pressure for Canadian group benefits plans. According to the 2025 Express Scripts Canada Drug Trend Report, overall drug trend – the year-over-year change in relative annual drug spend per plan member - rose 5.8%, driven by a 2.7% increase in specialty‑drug spend per claimant. Meanwhile, traditional drug spend per plan member actually decreased. Notably, semaglutide (e.g., Ozempic®, Wegovy®) ranked as the top drug in spend, highlighting how GLP‑1 therapies are exerting outsized cost pressure.
In Saskatchewan, employers are feeling the squeeze, particularly as these costly therapies become more commonplace in workplace claims. The challenge? Balancing comprehensive coverage with long-term plan affordability.
Specialty Drugs and GLP-1 Therapies: Game-Changers with Hefty Price Tags
Specialty drugs now account for roughly 35% of plan costs, even though only about 1.9% of claimants use them.1
GLP‑1 drugs such as Ozempic®, Wegovy®, and Trulicity® - originally approved for diabetes but increasingly used for weight management - are pushing cost pressure even further. A survey from May 2025 by the International Foundation of Employee Benefit Plans reports that:
- 56% of Canadian employers cover GLP‑1 drugs for diabetes only (down from 66% in 2024)
- Coverage for both diabetes and weight loss has risen from 17% to 31%
To control costs, employers are increasingly using prior authorization (100% of users of utilization management), eligibility requirements (45%), and annual maximums (32%).2
These therapies deliver real health benefits but insurers and plan sponsors must manage them carefully to prevent runaway renewals.
The Role of Biosimilars: A Path to Savings
Biosimilars - biologic analogues offering comparable safety and efficacy at a lower cost - are gaining traction as key cost-control tools. The Canadian Institute for Health Information (CIHI) reported that biosimilar uptake in public drug programs varies widely, from 64% in British Columbia to only 4% in Saskatchewan.3
In Saskatchewan, the Biosimilars Initiative, launched on October 20, 2022, requires patients using a reference biologic to transition to a biosimilar to maintain coverage under the Saskatchewan Drug Plan. Established patients had until April 30, 2023 to switch, or apply for a medical exemption; after that date, the reference biologic was no longer covered.4
An analysis published in June 2024 estimates that biosimilars can cost up to 50% less than reference biologics, and the policy may have saved the province around $20 million by May 2024.5
Strategic Levers Employers Can Use
Here’s how Saskatchewan employers can adapt:
- Prior Authorization (PA) Programs: Especially for GLP‑1 drugs and new high-cost therapies; as seen in the IFEBP survey, 100% of employers using utilization management require PA.
- Managed Formularies: Encourage the uptake of cost-effective options like biosimilars, aligning private plan designs with provincial policy to mitigate confusion.
- Health Spending Accounts and Cost-Sharing: Mix flexible HSAs with traditional coverage to manage employer exposure, as employers start offering GLP‑1 coverage via multiple mechanisms (HCSA, supplemental riders, etc.)
- Drug Monitoring Programs: Introduce new drugs, or new indications, only after pharmacoeconomic review or negotiation through product listing agreements. This approach addresses the rise of specialty drug spend (35% of costs from 1.9% users).
- Data‑Driven Decisions: Analyze your claims and demographic data to anticipate cost trends—much like what national trend reports offer, but tailored to your plan.6
Why This Matters for Employers As We Head Into 2026
Drug innovation continues to accelerate. With gene therapies, advanced biologics, and even pricier treatments expected soon, employers must act now. Proactive measures, like optimizing plan design, promoting biosimilar substitution, and implementing utilization controls, will position you to offer meaningful and affordable benefits tomorrow.
Failing to address these trends proactively risks spiraling renewal costs and dissatisfied employees. But by partnering with a knowledgeable benefits consultant and using the levers outlined above, you can be both fiscally responsible and compassionate.
Closing Thought
A well-designed benefits plan balances care and sustainability. By strategically addressing drug costs instead of reacting to them, employers can preserve plan integrity while supporting employee health.
Still Have Questions?
If you have any questions or just want to chat with someone on our team, please contact us. We’re always here to help and happy to connect.
Deb Wiegers, GBA, CLU, CH.F.C.
Founding Partner, Managing Principal Benefits Division
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1https://blog.ifebp.org/drug-plan-cost-containment-strategies/
2https://blog.ifebp.org/glp-1-drug-coverage-continues-to-rise-in-canada/
3https://www.cihi.ca/en/prescribed-drug-spending-in-canada-2022
4https://www.saskatchewan.ca/residents/health/prescription-drug-plans-and-health-coverage/extended-benefits-and-drug-plan/biosimilars?utm_source=chatgpt.com
5https://www.researchgate.net/publication/381405377_Implementing_a_Medication_Switching_Policy_Analysis_of_the_Saskatchewan_Biosimilars_Initiative
6https://blog.ifebp.org/glp-1-drug-coverage-continues-to-rise-in-canada/
