Novo Nordisk is decisive for the development of the country
The Danish economy grew in the first quarter of the year by 1.9%. 1.7% of this growth is due to the pharmaceutical industry. [Charlotte de la Fuente/The New York Times]
The New York Times
After almost a century of silent presence as a manufacturer of antidiabetic drugs, Denmark's Novo Nordisk has now grown so much that it has come to change the entire economy of the country. The reason is basically two specific preparations: Ozempic and Wegovy. These two, although originally designed as diabetes drugs, ended up revolutionizing the fight against obesity with astronomical sales.
The company's success is so great that it alone is now sufficient to explain almost all of Denmark's economic growth, while a jump in overseas sales has convinced the country's central bank to set interest rates lower than originally intended . In fact, over the past two weeks, Novo Nordisk's stock market value has surpassed that of the rest of the Danish economy. Its displacement is so great that economists are seriously debating releasing a new statistical survey of the country's economy that does not include the company at all. In other words: now there is Novo Nordisk and the rest.
Although the country of less than six million people is no stranger to big companies, having for years given birth to giants such as Lego and shipping giant Maersk, Novo Nordisk's influence on the national economy is quite different. “Without the pharmaceutical industry the country would show almost zero growth in the first quarter of this year compared to the same period last year,” said Jonas Dan Petersen, a consultant at Denmark's national statistics office. “During this period, the Danish economy grew by 1.9%. 1.7% of this growth is due to the pharmaceutical industry,” he explained.
For many years, Novo Nordisk focused exclusively on the fight against diabetes. However, the discovery of the potential of its formulations to lead to rapid weight loss sent the American consumer public into a frenzy, with the country having one of the highest obesity rates in the world with over 100 million Americans considered overweight. In 2021, the World Health Organization approved Wegovy as a drug for weight loss, a use that until then was considered “off label”.
Following the publication of a five-year clinical study earlier this month, which shows that Wegovy can reduce the risks of serious cardiovascular disease, the company's revenue skyrocketed.
Many fear that this rise may end in a sharp fall, which will have disastrous consequences for the country's economy. “There is no Denmark without Novo Nordisk, and this must be taken seriously when we try to draw up wage policies or give national economic advice,” said Helge Pedersen, CFO of the Nordea banking group.
For Pedersen, however, the benefits of having such a large company in the country outweigh the risks. The popularity of the company can generate a global interest in the country, its education system and its industry. This in turn may help Denmark continue its “high wage policy” as well as push other businesses to become more innovative and competitive.
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