Gary Sawatzky | Chief Operating Officer, ARTA

When a drug manufacturer introduces a new type of medication in Canada, they can patent the drug and sell it under its brand name, knowing generic versions of the drug are not allowed to infringe on the patent.

The patents for drugs last for about twenty years total, though this period starts at the time the drug is introduced, continues through the time the drug is formulated, tested for use and effectiveness, and goes through the lengthy regulatory approval process while it is being reviewed by Health Canada. As a result, a drug manufacturer can sell the drug to patients in the marketplace for only eight years. Once the patent protection expires, generic drug manufacturers are able to market generic bioequivalent versions of the drug.

One such drug that recently lost its patent protection in Canada is Xarelto (rivaroxaban). Xarelto is a very popular anticoagulant medication — also known as a blood thinner — used to treat and prevent blood clots. In 2023, it was the #4 drug covered by ARTA’s Benefit Plans by dollars spent by the Education sector, and the #7 drug covered by ARTA’s Benefit Plans by dollars spent by the Public/Private sector. In total, ARTA spent almost $310,000 for Xarelto claims, based on submitted claims of $1.57 million (most of the claims were paid for by public health care plans).

Since Xarelto has lost its patent protection, generic drug manufacturers can now manufacture and sell the generic version of Xarelto, which is beneficial to ARTA’s Benefit Plans as generic medications typically cost between 10% and 25% of their brand-name counterparts, meaning savings for the plan and our members.

Rivaroxaban has already been added to the Alberta Drug Benefit List, so residents covered under the Alberta Coverage for Seniors program can claim rivaroxaban through their public drug care coverage. It has been added to the Alberta Drug Benefit List as a regular benefit, whereas the brand-name Xarelto required special authorization for coverage.

Brand-name Xarelto is still available to be claimed through the ARTA Benefit Plans, but since the generic versions are now available, the plans will only cover up to the cost of the generic medication — anyone who wants to continue to take the brand-name medication is liable for the difference between the cost of the brand-name drug and the generic drug.

If you are unsure about taking the generic version of Xarelto (or any medication for that matter) we encourage you to speak to your pharmacist about the differences between brand-name medications and their generic counterparts.

Generic drugs are only allowed to be considered interchangeable with the brand‑name drug if they are “bioequivalent” to the brand‑name drug. Bioequivalent means that a generic drug must have the same amount of the active medicinal ingredients as the brand‑name drug, it must disperse the medicinal ingredients at the same rate into the body as the brand‑name drug, and it must also be ingested at the same rate as the brand‑name drug. In addition, the generic drug’s intended use, effects, side effects, risks, and safety must be the same as the original drug. In other words, the generic drugs’ pharmacological effects are required to be the same as those of their brand‑name counterparts.

A generic drug undergoes rigorous tests to ensure that it can be considered bioequivalent to its brand‑name drug, and it will only be approved by Health Canada’s Therapeutic Products Directorate if it is proven to be as safe and effective as the brand‑name version. Even though a generic drug is bioequivalent, it may look different from the brand‑name drug. It might be a different colour, shape, or size, because the inactive ingredients such as the fillers and dyes can be different provided that they do not affect the efficacy of the medication.

ARTA will ensure that members covered under the ARTA Benefit Plans continue to have access to the right drug, at the right time, at the right price. As more brand-name drugs reach their patent cliff (when they are no longer covered by patent protection), the generic versions provided in the marketplace help to offset the additional costs of new innovator brand-name drugs like the antidiabetic and weight-loss medications I wrote about in the spring 2024 edition of news&views.

After working in group benefits consulting for twenty years, Gary joined ARTA to serve as Chief Operations Officer in November 2017. Gary has his certified Employee Benefits Specialist designation.