America’s Obsession With Weight-Loss Drugs Is Affecting the Economy of Denmark
Novo Nordisk’s market capitalisation has matched the GDP of its home country
2 min
Ozempic and Wegovy are tilting the scales of Denmark’s economy.
Their Danish manufacturer, Novo Nordisk, has generated billions of dollars of revenue and supercharged the company’s market capitalisation. That has led to lower interest rates in the country, according to a bank report and economists.
The market value of Denmark’s biggest company has risen by more than a third so far this year to about $419 billion, bigger than the country’s gross domestic product of about $406 billion. The measures aren’t synonymous: market capitalisation is the value of all Novo Nordisk shares, while GDP measures goods and services produced in a year. But the comparison demonstrates how Novo Nordisk has surged past companies such as Lego and Carlsberg to sway the economy of its nordic homeland.
Take foreign-exchange management for one example.
Denmark’s currency, the krone, is pegged to the euro. Central bankers in Copenhagen adjust interest rates and make other interventions to keep its value steady with that of the continent’s common currency.
Novo Nordisk’s U.S. sales of Ozempic and Wegovy have been so strong that it has had to convert dollars into kroner in unusually large quantities, raising the krone’s value relative to the euro, said Danske Bank director Jens Naervig Pedersen.
“Because the pharmaceutical industry’s exports have grown so much, it’s creating a big influx of currency into the Danish economy,” he said.
Denmark’s central bankers have responded by keeping interest rates below the European Central Bank’s, weakening the krone, said Pedersen.
Denmark’s central bank declined to comment.
Novo Nordisk’s success with drugs used for weight loss and diabetes is overall a boon to the Danish economy, which will benefit from more jobs created by the company’s growth as it invests domestically, economists said. Lower interest rates also benefit home buyers who can secure mortgage rates somewhat lower than in the rest of Europe, they said.
“It is an embarrassment of riches—this is good for the Danish economy and they’re getting a lot of export revenues,” said Gian Maria Milesi-Ferretti, an economist and senior fellow at the Brookings Institution.
For small countries, having a domestic company play such a disproportionate role in the economy carries risks. For years, fellow Nordic nation Finland’s economy was dominated by telecom Nokia, which at its peak in 2000 accounted for 4% of the country’s GDP, more than a fifth of exports and some 70% of value on its stock exchange. It played a significant role in Finland’s growth from 1995-2007, when GDP per capita rose 55%, nearly double the increase in the U.S.
Nokia’s decline also coincided with a decade of economic stagnation in Finland after 2008. The collapse of Nokia’s handset market, largely because of competition from the iPhone that Apple introduced in 2007, exacerbated Finland’s economic woes, which under austerity policies and the eurozone crisis saw its per capita income decline over the next decade.
Novo Nordisk is now the second-most valuable public company in Europe after luxury brand LVMH Moët Hennessy Louis Vuitton.
Analysts estimate Novo Nordisk’s weight-loss drug sales to be $6.1 billion this year and to reach nearly $15 billion annually in 2027, according to data provider FactSet.
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Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Couples find that lab-grown diamonds make it cheaper to get engaged or upgrade to a bigger ring. But there are rocky moments.
4 min
Wedding planner Sterling Boulet has some advice for brides-to-be regarding lab-grown diamonds, which cost a fraction of the natural ones.
“If you’re trying to get your man to propose, they’ll propose faster if you offer this as an option,” says Boulet, of Raleigh, N.C. Recently, she adds, a friend’s fiancé “thanked me the next three times I saw him” for telling him about the cheaper lab-made option.
Man-made diamonds are catching on, despite some lingering stigma. This year was the first time that sales of lab-made and natural mined loose diamonds, primarily used as center stones in engagement rings, were split evenly, according to data from Tenoris, a jewellery and diamond trend-analytics company.
The rise of lab-made stones, however, is bringing up quirks alongside the perks. Now that blingier engagement rings—above two or three carats—are more affordable, more people are dealing with the peculiarities of wearing rather large rocks.
Esther Hare, a 5-foot-11-inch former triathlete, sought out a 4.5-carat lab-made oval-shaped diamond to fit her larger hands as a part of her vow renewal in Hawaii last year. It was a far cry from the half-carat ring her husband proposed with more than 25 years ago and the 1.5-carat upgrade they purchased 10 years ago. Hare, 50, who lives in San Jose, Calif., and works in high tech, chose a $40,000 lab-made diamond because “it’s nuts” to have to spend $100,000 on a natural stone. “It had to be big—that was my vision,” she says.
But the size of the ring has made it less practical at times. She doesn’t wear it for athletic training and swaps in her wedding band instead. And she is careful to leave it at home when traveling. “A lot of times I won’t take it on vacation because it’s just a monster,” she says.
The average retail price for a one-carat lab-made loose diamond decreased to $1,426 this year from $3,039 in 2020, according to the Tenoris data. Similar-sized loose natural diamonds cost $5,426 this year, compared with $4,943 in 2020.
Lab-made diamonds have essentially the same chemical makeup as natural ones, and look the same, unless viewed through sophisticated equipment that gauges the characteristics of emitted light.
At Ritani, an online jewellery retailer, lab-made diamond sales make up about 70% of the diamonds sold, up from roughly 30% two years ago, says Juliet Gomes, head of customer service at the company, based in White Plains, N.Y.
Ritani sometimes records videos of the lab-diamonds pinging when exposed to a “diamond tester,” a tool that judges authenticity, to show customers that the man-made rocks behave the same as natural ones. “We definitely have some deep conversations with them,” Gomes says.
Not all gem dealers are rolling with these stones.
Philadelphia jeweller Steven Singer only stocks the natural stuff in his store and is planning a February campaign to give about 1,000 one-carat lab-made diamonds away free to prove they are “worthless.” Anyone can sign up online and get one in the mail; even shipping is free. “I’m not selling Frankensteins that were built in a lab,” Singer says.
Some brides are turned off by the larger bling now allowed by the lower prices.When her now-husband proposed with a two-carat lab-grown engagement ring, Tiffany Buchert, 40, was excited about the prospect of marriage—but not about the size of the diamond, which she says struck her as “costume jewellery-ish.”
“I said yes in the moment, of course, I didn’t want it to be weird,” says the physician assistant from West Chester, Pa.
But within weeks, she says, she fessed up, telling her fiancé: “I think I hate this ring.”
The couple returned it and then bought a one-carat natural diamond for more than double the price.
When Boulet, the wedding planner in Raleigh, got engaged herself, she was over the moon when her fiancé proposed with a 2.3 carat lab-made diamond ring. “It’s very shiny, we were almost worried it was too shiny and was going to look fake,” she says.
It doesn’t, which presents another issue—looking like someone who really shelled out for jewellery. Boulet will occasionally volunteer that her diamond ring came from a lab.
“I don’t want people to think I’m putting on airs, or trying to be flashier than I am,” she says.
For Daniel Teoh, a 36-year-old software engineer outside of Detroit, buying a cheaper lab-made diamond for his fiancée meant extra room in his $30,000 ring budget.
Instead of a bigger ring, he got her something they could both enjoy. During a walk while on an annual ski trip to South Lake Tahoe, Calif., Teoh popped the question and handed his now-wife a handmade wooden box that included a 2.5-carat lab-made diamond ring—and a car key.
She put on the ring, celebrated with both of their sisters and a friend, who was the unofficial photographer of the happy event, and then they drove back to the house. There, she saw a 1965 Mustang GT coupe in Wimbledon white with red stripes and a bow on top.
Looking back, Teoh says, it was still the diamond that made the big first impression.
“It wasn’t until like 15 minutes later she was like ‘so, what’s with this key?’” he adds.
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
