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Vials transfer alongside a conveyor on the Novo Nordisk A/S manufacturing amenities in Hillerod, Denmark, on Monday, June 12, 2023. The luck of Novo’s bestsellers Ozempic and Wegovy, medication that assist folks lose vital quantities of weight, has created one thing of a gold rush within the pharma trade with about 40 firms growing merchandise that may accentuate pageant.
Bloomberg | Bloomberg | Getty Images
Denmark’s financial expansion, which economists say is because of an “exceptional surge” in pharmaceutical exports, is anticipated to weaken this 12 months — however the looming risk of U.S. price lists at the pharma trade may not be a lot of a contributing issue, consistent with the International Monetary Fund.
The IMF on Tuesday stated in its newest document at the Nordic nation that it expects Denmark, whose financial system grew 3.7% in 2024, to look its output reasonable to 2.9% this 12 months and to 1.8% in 2026. The declines are set to happen amid expected weak point in export expansion, together with that of pharmaceutical items.
The fund nonetheless famous that Denmark can be secure from doable U.S. price lists on pharmaceutical imports, as maximum Danish drug merchandise are neither produced within the nation, nor pass its borders.
Danish drugmakers have grow to be increasingly more reliant on a “merchanting and processing” machine through which lots of the worth of the medications is because of the highbrow belongings embedded in them, with medication firms contracting producers in different international locations to supply and send the goods.
“The U.S. is a key trading partner; however, exports produced in Denmark passing through customs account for only 3 percent of total exports, limiting the direct impact of U.S. tariffs on the Danish economy,” the IMF stated, including that “direct impacts from U.S. tariffs are expected to be limited, but heightened trade tensions and trade policy uncertainty pose risks to the outlook.”
Beyond 2026, the fund stated, medium-term expansion is projected at round 1.5%, “reflecting a maturing pharmaceutical sector and a declining working-age population.”
Last fall, IMF economists remarked that Denmark’s expansion were pushed through an “exceptional surge” in its pharma trade whilst the remainder of the financial system had remained “relatively subdued.”
The fund singled out Danish pharmaceutical massive Novo Nordisk‘s large building up in international call for for its diabetes and weight reduction drugs, Wegovy and Ozempic, as a driving force of expansion, noting that the corporate’s gross sales as a percentage of Denmark’s GDP larger from 1% within the early 1990s to 8.3% in 2023.
Looming risk posed through Trump
A larger headwind for the broader European pharmaceutical trade is U.S. President Donald Trump’s risk to impose price lists on drug imports.
Pharmaceuticals have been exempted from Trump’s preliminary “reciprocal” price lists regime introduced in April, however the president has since set his points of interest at the world trade, threatening to put separate levies on prescribed drugs exported to the States and important that U.S. drug costs come down.
Signaling his intent at the topic, Trump on Monday signed an government order directing drugmakers to decrease their drug costs to align with the considerably decrease costs which can be paid out of the country.
The president didn’t refer to precise countries, however signaled that he would goal different evolved international locations as a result of “there are some countries that need some additional help, and that’s fine.”
“Basically, what we’re doing is equalizing,” Trump stated all over a press match on Monday. “We are going to pay the lowest price there is in the world. We will get whoever is paying the lowest price, that’s the price that we’re going to get.”
White House officers didn’t reveal which drugs the order will observe to, however stated that it’ll affect the industrial marketplace in addition to Medicare and Medicaid.
In 2022, U.S. costs throughout all medication (manufacturers and generics) have been just about thrice as top as costs in 33 OECD comparability international locations, consistent with information launched in 2024 through the U.S. Department of Health & Human Services.
U.S. President Donald Trump gestures at the day he indicators an government order on prescription drug pricing all over a press convention within the Roosevelt Room on the White House in Washington, D.C., U.S., May 12, 2025. REUTERS/Nathan Howard
Nathan Howard | Reuters
The risk of price lists on pharmaceutical imports has been described as a “sword of Damocles” placing over Europe’s pharma trade, with CEOs caution that there may well be an exodus of main continental gamers to the U.S. in a bid to steer clear of levies.
The European Federation of Pharmaceutical Industries and Associations (EFPIA), which represents main European pharmaceutical firms — together with Novo Nordisk, Bayer, AstraZeneca, GSK, Roche and Sanofi — warned European Commission President Ursula von der Leyen in April that “unless Europe delivers rapid, radical policy change then pharmaceutical research, development and manufacturing is increasingly likely to be directed towards the U.S.”
It stated {that a} survey of its individuals confirmed that round 100 billion euros ($112 billion) price of capital expenditure and analysis and construction investments have been in peril in consequence.
“The U.S. now leads Europe on every investor metric from availability of capital, intellectual property, speed of approval to rewards for innovation. In addition to the uncertainty created by the threat of tariffs, there is little incentive to invest in the EU and significant drivers to relocate to the U.S.,” the EFPIA stated.
— CNBC’s Annika Kim Constantino and Karen Gilchrist contributed reporting to this tale
