How a Weight Loss Wonder Drug Gobbled Up an Entire Economy

How a Weight Loss Wonder Drug Gobbled Up an Entire Economy

The policy has led to a massive bill for Denmark’s public health care system. Danish authorities spent $200 million on Ozempic in 2023 — eight percent of all spending on medicine, and twice as much as the previous year. Officials warned that should costs continue to surge, it would necessitate cuts. 

Anders Kuhnau, chairman of Danish Regions, the body representing Denmark’s regional public health care authorities, worried about the spike during an interview with Danish national broadcaster DR, calling it “very large and surprising.” 

“The consequence,” he said late last year, “is that we’ll have to take money from hospitals, which are already under pressure.”

Several months earlier, Denmark’s Reimbursement Committee, which advises the Danish Medicines Agency on which drugs should be covered, recommended ending subsidies for Ozempic due to the costs.

The public backlash put pressure on Novo to lower its prices — this week the company reduced Ozempic’s cost in Denmark from $188 to $125 per month, according to a government-run website on drug prices. “Ozempic has been on the market in Denmark since 2018,” the company wrote in a statement, “and locally it is normal for the price of a drug to be reassessed during the life cycle.”

Danish authorities said Wednesday that they have now decided to take action to reduce the burden on taxpayers and will tighten current rules for Ozempic subsidies and only reimburse patients who can’t be treated with cheaper alternatives. It also agreed to keep some public aid in place after Novo had agreed to lower prices.

Nokia Risk

Last year, nine civil servants from the Danish economy ministry visited Novo in preparation for the government’s triannual economic review. The 228-page document, published in August, mentioned Novo Nordisk 31 times and included several references to Ozempic and Wegovy — a highly unusual move for a report that ordinarily refrains from mentioning companies or products by name.

While the authors noted that Novo has “a limited significance” in terms of employment relative to production — the drugmaker has about 28,000 employees in Denmark — the report nevertheless sparked concern that the country was on a trajectory similar to Finland’s under Nokia. In the late 1990s, the phonemaker’s rise transformed the Nordic nation from a raw materials producer to a high-tech knowledge economy, lifting the gloom in a country devastated by a severe recession and the near-overnight disappearance of Soviet trade.

At its peak, Nokia accounted for 4% of Finnish GDP, and was — like Novo — Europe’s most valuable company, generating half the country’s economic growth and bringing in a fifth of all corporate tax. Yet the company’s failure to keep up with competitors brought this to an end. In 2009, beset by a European debt crisis, Finland’s GDP declined by 8.1% — with Nokia’s downfall estimated to be responsible for almost half. Finns failed to resize their public sector accordingly, and the country has not generated a budget surplus since then.

Danish officials have shrugged off suggestions the country is facing a “Nokia risk.” Stephanie Lose, Denmark’s minister of economy, said in an interview that because much of Novo’s production happens abroad, the company is not “deeply infiltrated in the Danish economy.” She pointed to employment as an example.

“I don’t think you should be worried about a potential effect on the domestic economy, or employment and GDP growth” should Novo face challenges, Lose said.

Whether or not that proves to be true, Novo’s size is already causing issues in Denmark: Businesses complain about the drugmaker vacuuming up workers with high-paying job offers; even the armed forces have lost officers to Novo. Novo’s massive construction plans are tying up permitting offices, causing delays for other companies. And real estate agents in Kalundborg report that senior citizens looking to downsize have been forced to leave town because the inflow of Novo employees makes finding a rental home nearly impossible.

#Weight #Loss #Drug #Gobbled #Entire #Economy

About Author

Leave a Reply