Denmark's central bank reported on Wednesday that the country's pharmaceutical sector achieved "extraordinary" growth in the first half of 2026, with an increasing share of production occurring abroad under Danish ownership. A special report noted that this expansion is primarily driven by Novo Nordisk's sales and manufacturing performance in the US market since the beginning of the year.
The report highlighted that this reflects an agreement between Novo Nordisk and the US government, effective from January, which allows its products to reach a broader patient population through channels such as public health insurance programs. Novo Nordisk is widely recognized for its obesity and diabetes treatments, though it also develops hemophilia medications and hormone replacement therapies. However, the central bank specified that the agreement with Washington primarily targets weight-loss and diabetes drugs.
Last year, the White House announced that it had secured "preferential most-favored-nation" pricing from Novo Nordisk, meaning Medicare beneficiaries and TrumpRx customers would pay reduced prices for these medications. One month later, the US Food and Drug Administration approved Novo Nordisk's Wegovy, marking the first product in its class to receive regulatory clearance from that agency.
The scale of Novo Nordisk's growth has become so substantial that Denmark's central bank has had to revise its economic growth projections. In March, it forecast growth rates of 1.8% for 2026 and 2027, and 2% for 2028, with those earlier figures making no mention of the pharmaceutical industry. In the latest projections released this week, the bank now expects economic growth of 4% this year, 2.3% in 2027, and 2% in 2028.
According to the report, the upward revision of 2.2 percentage points reflects two key developments. First, growth momentum in the first half of 2026 has exceeded what was anticipated in March, driven both by higher-than-assumed actual growth in the pharmaceutical sector and stronger-than-expected expansion across other parts of the Danish economy. Second, revised GDP estimates have provided a more solid foundation for 2026 growth figures.
The central bank also noted that rising inflation expectations and uncertainty stemming from Middle East conflicts and elevated oil prices represent headwinds for the economy. However, the massive overseas demand for Novo Nordisk's products, along with the corresponding scale of foreign production, means Denmark's domestic economy does not fully capture all the benefits.
As Christian Kettel Thomsen, Governor of Denmark's central bank, pointed out, the Danish economy has so far weathered global turbulence well. He stated that strong GDP growth is expected this year without visible signs of wage or price pressures, attributing this to the fact that a significant portion of growth comes from overseas production that utilizes Danish labor and capital relatively sparingly.
The report further indicated that while millions of American consumers have been reached through US government channels, the accompanying price-reduction negotiations have weakened future terms of trade. Real export volumes of Danish goods have increased, yet export prices have simultaneously declined. Since the start of the year, this price decrease has primarily resulted from Novo Nordisk's agreement with the US government, which involves cutting prices on certain weight-loss and diabetes drugs by up to 30%. By contrast, prices of other export goods have remained relatively stable during the same period.