The skyrocketing demand of a new class of weight loss drugs continues to have ripple effects across the economy. Nowhere is that impact felt more than Denmark.
The Nordic country’s largest bank, Danske Bank, forecasted on Tuesday that Denmark’s gross domestic product will grow 2.1% in 2024 and it’s primarily thanks to Novo Nordisk, which makes diabetes medication Ozempic and weight-loss drug Wegovy.
“The Danish economy performed much better than expected in the wake of high inflation and massive interest rate hikes,” the bank said in a press release. “Much of the reason is the huge success of pharma giant Novo Nordisk, which growth is pushing overall activity levels up.”
Novo Nordisk’s impact on Denmark
The success of the Denmark-based pharmaceutical company has already helped the country avoid a GDP contraction in 2023.
The Danish government agency Statistics Denmark reported in a preliminary reading that the pharmaceutical industry was a driving force for the nation’s growing economy in the fourth quarter of 2023 and the year overall. Denmark’s GDP grew 1.8% in 2023 — and much of its boost is owed to the pharmaceutical industry. Without pharmaceuticals, the agency says, the country’s GDP would have instead fallen 0.1%.
Leading that growth is Novo Nordisk. Novo Nordisk has been on an upward climb it doesn’t expect to end anytime soon. The company reported in January that its 2023 sales jumped 31% to 232.3 billion Danish kroner ($33.8 billion), compared with 177 billion Danish kroner ($25 billion) in 2022. It also projects sales will increase by up to 26% in 2024.
Demand for these drugs has made Novo Nordisk the most valuable company in Europe, surpassing luxury conglomerate LVMH last year.
Ozempic’s impact on the economy
The meteoric rise of these appetite-suppressing medications has sparked concern across Wall Street on how they could potentially impact food and restaurant sales. Walmart U.S. CEO John Furner previously said the company is already noticing changes in consumer behavior from the drugs. He told Bloomberg in October that in comparison to the general population, users are buying less food.
In contrast, health-focused restaurants like Sweetgreen could see a bump in sales thanks to growing use of these medications according to a new industry report (pdf) by the investment bank William Blair.