The Danish economy would be in recession if it were not for the macroeconomic effect of a single company’s profits, Novo Nordisk. Centennial, the pharmaceutical company never had such importance in the Danish economy until 2022 when it began to grow uncontrollably and is now worth more than $570 billion on the stock market. when the country’s GDP is around $400 billion. Denmark is growing at rates above 2.0% and without the effect of that company it would be in recession.
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What happened? What happened? Novo Nordisk is the manufacturer of two of the most revolutionary medications in recent years, the anti-obesity drugs Ozempic and Wegovy, especially the first due to its spectacular success in the United States.. The company, one of the oldest European pharmaceutical companies, has been making anti-diabetes medications for almost a century. And so it continued until in 2017 the US agency in charge of approving the use of medicines approved Ozempic against diabetes and in 2021 did the same with a similar medicine, Wegovy.
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The economic effect of the company’s enormous growth alters all the country’s macroeconomic data, from GDP to the need for its Central Bank (Denmark is in the European Union, but retains its own currency and with it its issuer) to keep prices low. interest rates. The company has in a very short time become the second most valuable on the European continent after the French LVMH, dedicated to luxury products. His philanthropic foundation is already the largest on the planet.
The effect began with that force in 2022, when The authorities already warned that two thirds of the country’s growth was due to the profits of pharmaceutical companies, but it was Novo Nordisk and its two drugs that explained all the rise. The benefits of the company.
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The company has not generated employment at the rate of its growth nor does it intend to generate it, because a good part of its production is made in plants in the United States, but it does pay its taxes in Denmark, where it is inflating the coffers of the company like no other company. Treasury Administration.
The Central Bank of Denmark also faces a dilemma. Novo Nordisk must massively buy crowns to repatriate its profits in other currencies, such as dollars or euros. This triggers the value of the crown, which puts the Central Bank on the ropes, whose job by law is to keep the value of the crown linked to the value of the euro. Thus, the Central Bank must massively buy foreign currencies and keep its interest rates below those of the euro so as not to attract too many investments. These extraordinarily low interest rates make access to housing easier, in a country that was about to experience a burst of its real estate bubble.
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According to our study, GLP-1 drugs, such as Ozempic and Trulicity from Novo Nordisk and Eli Lilly, to treat #diabetes, are priced up to 400 times higher than their real price. 💊💰
(Thread 👇) pic.twitter.com/KQq22uan2Q
— Doctors Without Borders Mexico (@MSF_Mexico) May 5, 2024
The company is a blessing for the country, but also a risk. If things went wrong, it would affect tax revenues, the value of the currency and even the future of its university students. “If you have superpowers,” says his boss Lars Fruergaard Jorgensen, “you have super responsibility.”
IDAFE MARTIN PÉREZ
FOR THE TIME
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