Denmark’s Pharma Boom

When you think of Denmark, you may think of vikings or Legos, or perhaps danish or Hamlet. But with respect to its economy, something is certainly not rotten in the state of Denmark, as the GLP-1 drugs Ozempic and Wegovy, which are manufactured in Denmark, have singlehandedly ignited a spike in GDP growth. Joseph Politano provides graphic detail of Denmark’s surge.

The gap between Danish GDP with and without pharmaceutical manufacturing has grown sharply in recent years. Since late 2021, all of Denmark’s 3.6% real GDP gains have come from the pharmaceutical industry, as the rest of the economy flatlined during that time. Politano observes that this growth corresponds with a recent export boom:

Where are these increased exports going? The majority of Denmark’s increased exports have gone to the United States, which now far outpaces Germany as the leading recipient of Danish exports. Demand for Danish pharmaceuticals has run so high that supply chains can’t keep up:

Novo Nordisk, the company that makes Ozempic and Wegovy, has outsourced much production in an attempt to meet the demand surge:

Increased corporate tax receipts have resulted in a budget surplus for Denmark, which should give Denmark additional fiscal flexibility. As Politano notes, the core patent for Ozempic expires in 2026; however, secondary patents could provide Novo Nordisk with patent protection for up to seven more years. In the United States, federal regulators are currently challenging patents for Ozempic and other brand-name drugs, alleging that the patents are a sham designed to delay competition from generic drugs, but the incoming Trump administration may elect to discontinue that stance.

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