Ozempic drugmaker Novo Nordisk dominates Danish economy

Novo is in a delicate position. If it continues to expand, so too will the power and influence it exerts in Denmark. Picture: Mario Tama/Getty Images

The development of semaglutide, the key ingredient in Ozempic and Wegovy, has transformed their maker Novo Nordisk into Europe’s most valuable company, with profound implications for its home country of Denmark.

The diabetes and obesity drugs generated billions in sales and blown open a new market for weight loss drugs, which Goldman Sachs estimates will reach $100bn (€93.6bn) a year by 2030.

Novo’s market capitalisation of more than $570bn is bigger than the Danish economy. Its philanthropic foundation is now the world’s largest, with assets twice those of the Gates Foundation. The drugmaker’s income tax bill in Denmark last year was $2.3bn, and its massive investments and heightened production helped the domestic economy expand almost 2% — more than four times the EU average. That drove record government spending on defence, the green transition and support for Ukraine.

Without Novo’s contribution, the Danish economy would have stagnated.

Few in Denmark can escape Novo’s gravitational pull. Its agenda influences educational and research priorities, and politicians consider the company’s perspective before making decisions on immigration policy or new infrastructure development. The drugmaker has created thousands of jobs in the six-million-person country — and more will come as Novo expands across multiple locations — but even citizens with no ties to the firm benefit from its gains. Danish pension funds are flush from record returns on Novo shares, and mortgages are cheaper as booming diabetes drug exports have forced Denmark’s central bank to keep interest rates low.

Scrutiny

Novo’s enormous scale in Denmark also comes with risks, both for the company and its home market. Its every move is met with media scrutiny, making it especially vulnerable to public backlash and regulatory shifts. And a strategic misstep by the company would have a trickle-down impact on public coffers, scientific research, and even jobs for the next generation of Danish university graduates.

While Novo can’t anticipate how its decisions might affect Denmark, chief executive Lars Fruergaard Jorgensen said in an interview, he’s also realistic about the drugmaker’s potential impact in its home country and elsewhere. “When you have superpowers,” he said, citing Swedish children’s story Pippi Longstocking, “you have super responsibility.” 

Such outsized influence can be a liability in a culture where humility is so deeply rooted that an unofficial social code exists to discourage flashy displays of success. And Novo has taken measures to downplay its stature. When the company rented Copenhagen’s famed Tivoli Gardens amusement park in September for a private two-day staff party, the drugmaker asked guests not to post pictures on social media for fear of repercussions, according to local media.

And this week, following months of debate over rising public spending on Novo medication, the firm quietly reduced prices for Ozempic in Denmark by nearly a third.

For now, Novo has an almost iconic status amongst Danes — policymakers included. There is an “extreme political attentiveness” to Novo, said Christoph Houman Ellersgaard, an associate professor at the Copenhagen Business School who researches Danish elites. Yet, Novo is in a delicate position. If it continues to expand, so too will the power and influence it exerts in Denmark.

And if it stumbles or falls, the country’s economy and society will feel the effects.

Bloomberg