Ozempic Maker Novo Nordisk's Increasing Influence On Denmark's Employment Raises Economic Concerns

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Pharmaceutical titan, Novo Nordisk A/S NVO, has had a significant impact on Denmark’s employment landscape, surpassing initial projections, as revealed by a report from the Economic Councils, Denmark’s fiscal watchdog.

What Happened: The Economic Councils’ report, released on Tuesday, suggests that Novo Nordisk is responsible for half of Denmark’s private-sector job growth outside the agricultural sector since 2023, either directly or indirectly, Bloomberg reported. The success of the diabetes drug Ozempic and obesity medication Wegovy has propelled Novo to become Europe’s most valuable company. This has led to macroeconomic shifts in Denmark, affecting interest rates and the currency.

The updated employment figures have heightened concerns about Denmark’s economy becoming excessively dependent on Novo.

This situation mirrors Finland’s over-reliance on Nokia Oyj in the late 1990s, which resulted in an economic downturn when the company’s fortunes waned. However, Danish Economy Minister Stephanie Lose has rejected such comparisons, stating that a significant portion of Novo’s production takes place overseas.

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According to the Economic Councils, Novo has generated over 7,500 direct jobs in Denmark from the start of 2023 through March 2024. The report also estimated that Novo created 8,400 indirect jobs, a figure that is expected to rise due to Novo’s ongoing expansion plans in the construction sector.

Why It Matters: The Economic Councils had initially predicted that Novo’s growth would only slightly affect employment. However, the watchdog has now revised its 2024 GDP growth forecast for Denmark to 2.6%, citing the pharmaceutical sector as a key growth driver. It also raised its structural employment estimate.

Despite setbacks, such as Denmark favoring cost-effective alternatives for Ozempic, and high demand for Wegovy, Novo Nordisk continues to be a significant player in Denmark’s economy.

Read Next: AstraZeneca, Merck, GSK Struck Record $44.1B Licensing Deals With Chinese Drugmakers In 2023: Report

Photo via Shutterstock

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari

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