Ozempic: how medication changed a city in Denmark – 09/30/2024 – Balance and Health

The small town of Kalundborg, Denmark, has undergone a radical transformation in its economy and lifestyle, driven by an unexpected factor: growing global demand for its obesity and diabetes medicines.

In the modern facilities of the pharmaceutical company Novo Nordisk, currently expanding, the molecule semaglutide is produced, the active ingredient in two medicines that are revolutionizing the market: Ozempic and Wegovy.

These drugs changed the treatment of obesity and type 2 diabetes and, simultaneously, transformed Novo Nordisk into the most valuable company in Europe.

This growth not only benefited Novo Nordisk, but also had a significant impact on the Danish economy.

Kalundborg, in particular, has become a hub for employment and development, attracting thousands of workers and promoting prosperity in the region.

However, this growth also brings challenges. Economic dependence on a single company raises concerns about long-term sustainability and the need to diversify the national economy.

How did a small Danish town manage to become the center of a medical and economic revolution? What are the implications of this for Denmark and the rest of the world?

From insulin to Ozempic

The constant noise of the production line permeates the air in Hillerød, a town on the outskirts of the Danish capital Copenhagen that also benefits from manufacturing diabetes and obesity medicines.

Inside this high-tech facility, injection pens are assembled and filled with small glass capsules containing semaglutide.

For nearly a century, Novo Nordisk was the world’s leading insulin producer.

Its focus on research and development of diabetes treatments has positioned it as a leader in the industry.

Emily Field, head of European Pharmaceutical Equity Research at British bank Barclays, explains to the BBC: “Ozempic has been available to diabetics since 2017. However, the unprecedented run we see today only began in 2021, with the approval of Wegovy, a higher dose of semaglutide for the treatment of obesity.”

The drugs became an instant success, widely promoted on social media and by celebrities who began using them.

Ozempic has established itself as the world’s best-selling diabetes treatment. Novo Nordisk highlights that it should only be used and sold with a doctor’s prescription.

“Most analysts predict revenue growth of over 20% for Novo Nordisk,” adds Field.

“This sustainable growth is impressive and reflects the global impact of its products.”

In fact, Novo Nordisk grew four times faster than the average company in the European Union, demonstrating its undeniable success compared to other companies on the continent.

However, this success was not immediate.

“The company’s top management didn’t believe in semaglutide at first. It was only thanks to the perseverance of the research director that it was decided to move forward with its development between 2005 and 2006”, Kurt Jacobsen, professor at the Copenhagen Business School and author, tells the BBC of a book about Novo Nordisk.

Jacobsen highlights the magnitude of the impact: “It’s very difficult to underestimate the importance of this and the effect it has had on Novo Nordisk as a company. Not only is it growing, but it is transforming into a new company in new areas of business.”

The heart of the new Danish economy

Kalundborg, located an hour northwest of Copenhagen, is the center of this transformation.

With just 17,000 inhabitants, the city has seen Novo Nordisk invest US$8.6 billion in expanding its local plant, transforming this small village into a crucial hub for global semaglutide production.

When disembarking the train in Kalundborg, you can hear both birdsong and the constant noise of construction. Huge cranes dominate the horizon.

Kalundborg Mayor Martin Damm spoke to the BBC’s Business Daily program while visiting the site and revealed the impact Ozempic has had on local people.

“We have a growth rate of 26.88% in one year. Ten years ago, we had a very high unemployment rate. Now, we have one of the lowest on the island of Zealand,” he said.

The plant’s expansion attracted thousands of construction workers, generating unprecedented demand for local services.

“The owner of the nearby gas station has to prepare over 30 pounds of pork every day to make sandwiches for his workers,” Damm commented.

Businesses such as supermarkets saw their sales increase up to five times compared to what they sold before the semaglutide boom.

Novo Nordisk’s growth has also had a significant impact on tax collection in Kalundborg.

In just over a decade, tax revenue increased tenfold.

This made it possible to reduce local taxes six times in ten years and make investments in infrastructure and public services.

Boosting the economy

Novo Nordisk is not only transforming Kalundborg, it is also boosting the Danish economy as a whole.

By 2023, its profits had soared to more than US$12 billion (around R$65 billion), and its market value exceeded US$600 billion (US$3.3 trillion), making it the largest company in Europe.

Las Olsen, chief economist at Danish bank Danske Bank, tells the BBC: “Last year, Denmark had GDP growth of 1.9%. Without the pharmaceutical industry, growth would have been exactly 0%. Growth is really largely thanks to Novo Nordisk.”

This success had direct impacts on the Danish population. Many citizens own shares in the company, and the inflow of dollar revenues has resulted in lower interest rates and more affordable mortgages.

“We currently have interest rates that are slightly lower than those in the eurozone, which is a very direct result of all of this,” Olsen points out.

Novo Nordisk’s influence is so significant that the Danish government has begun publishing separate economic statistics that exclude the pharmaceutical sector, seeking a more accurate picture of the national economy.

The Nokia case

Novo Nordisk’s meteoric growth generated comparisons with the case of Nokia in Finland, recalls Las Olsen, from Danske Bank.

“Novo Nordisk’s size is comparable to what Nokia had in Finland in 2007-2008. In that period, there was a sharp decline in Nokia’s fortunes, and Finland faced a very difficult time,” he explains.

When Nokia collapsed, Finland experienced a significant economic crisis, highlighting the risks of relying too much on a single company or sector.

“This serves as a reminder that we need to ensure that the rest of the economy continues to invest in education and infrastructure to avoid future risks,” highlights Olsen.

The concern lies in the fact that although Novo Nordisk is driving current growth, a possible slowdown or problems at the company could have serious consequences for the Danish economy.

Therefore, experts and authorities emphasize the importance of diversifying and strengthening other economic sectors.

According to Mads Lundby Hansen, chief economist at the Danish think tank CEPOS, “while Novo Nordisk’s performance is impressive, it is crucial not to forget the other 99% of the economy. We must continue investing in education and infrastructure to maintain a resilient economy.”

A promising but uncertain future

The streets of Kalundborg today have more life thanks to the economic boom that the population is enjoying.

Despite the concerns, optimism is palpable in Kalundborg and across Denmark.

Novo Nordisk’s expansion created jobs and stimulated investments in infrastructure and education.

A new educational center with specialized biotechnology labs and courses is under development, largely funded by the non-profit Novo Nordisk foundation.

Andreas Verdoes, who opened a men’s clothing store in Kalundborg two years ago, tells the BBC that the city has changed thanks to the company.

“Everyone here has a connection to Novo Nordisk. Years ago, everyone left the city to get an education. Now, there are more young people in the city. I believe the future is bright.”

However, there are urgent needs that need to be met.

“Currently, we need houses and apartments”, highlights Verdoes.

The construction of a new highway that will connect Kalundborg to the capital and the construction of more than 1,200 new homes aim to meet this growing demand.

Meanwhile, the Kalundborg community continues to move forward, aware that the real challenge will be to turn this momentum into lasting progress that benefits everyone.

This text was originally published here.