How Ozempic and Weight Loss Drugs Are Reshaping Denmark's Economy
Novo Nordisk, the Danish company behind two popular obesity
medications, is reaping huge profits and is now responsible for most
of the country's economic growth.
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The company's booming success now explains almost all of Denmark's
recent economic growth, and the surge in overseas sales in the drugs
is prompting the Danish central bank to keep interest rates lower than
it otherwise would, economists say. In the past few weeks, Novo
Nordisk's market value has exceeded the size of the Danish economy.
Its soaring share price has made it the second-most valuable public
company in Europe, after the luxury goods group LVMH.
The company's shadow is so expansive that Danish economists are now
debating whether the country needs to publish another set of economic statistics that strips out Novo Nordisk. In other words, there's Novo
Nordisk, and there's the rest of the economy.
Denmark, a country of under six million people, is no stranger to
globally significant companies, such as Lego and the shipping giant
Maersk, but the impact of Novo Nordisk on economic statistics is
unique, economists say.
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Novo Nordisk is the biggest contributor of corporation tax in Denmark,
a boon for the country's public finances.
And the company is expected to only grow, because there are plenty of
potential patients. More than 100 million American adults are obese,
according to the Centers for Disease Control and Prevention.
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Some economists in Denmark worry that the country could become too
dependent on Novo Nordisk, with fretful comparisons to the fate of the
Finnish economy when Nokia lost its dominance in the cellphone
industry. There are also concerns that so-called Dutch disease could
come to Denmark, said Helge J. Pedersen, the chief economist at
Nordea, referring to the economic phenomenon when a country suddenly experiences a large increase in income, which is seemingly good
economic news, but it actually has a negative effect on the rest of
the economy.
https://www.nytimes.com/2023/08/28/business/denmark-ozempic-wegovy.html
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