Is there a “Nokia risk” for Denmark due to the success of Novo Nordisk?

This week, 60 Minutes went to Denmark to profile Novo Nordisk, the pharmaceutical company behind the popular drugs Wegovy and Ozempic.

Novo Nordisk’s success with these drugs has led to huge profits: its current market capitalization exceeds Denmark’s entire GDP.

Novo Nordisk’s huge profits have also led to a surge in tax revenue. Last year the company paid the Danish government $2.3 billion in income taxes.

“It’s hard to overstate the impact of Novo Nordisk, Ozempic and Wegovy on the Danish economy,” correspondent Jon Wertheim told 60 Minutes Overtime.

Wertheim interviewed Mads Krogsgaard, CEO of the Novo Nordisk Foundation. The foundation, which controls 77% of the company’s voting shares, is responsible for distributing profits to medical and scientific research.

Wertheim asked Krogsgaard how the company copes with its meteoric success and represents Denmark on the world stage.

“In some ways… we are in more contact with politicians (and) ministers than ever before,” he said.

“We hope there will be more companies like Novo Nordisk. But at the moment, it is Novo Nordisk that in many ways, as you see, controls the wealth of the country.”

In Denmark, Novo Nordisk created thousands of new jobs, “which is a lot for a small country,” Krogsgaard said.

“The risk here is that it’s one sector,” Wertheim said on “60 Minutes Overtime.” “There is a danger in having one sector so reliant on so much growth.”

Nokia

In 1999, producer Michael Gavshon and correspondent Bob Simon reported from another Scandinavian country, Finland.

Nokia, a Finnish mobile phone company, dominated the global mobile phone market.

At the time, 65% of Finns used cell phones, compared to 25% of the US population.

Simon asked then-CEO Jorna Ollila if he thought Nokia was at the forefront of a revolution.

“I think we’ve seen the first part. That’s not all,” Ollila said.

At its peak, Nokia’s share of Finland’s GDP was 4%. It remained the undisputed leader of the mobile phone industry until the late 2000s.

Then, in 2007, Apple changed everything with the release of the iPhone, and the era of smartphones began.

Almost immediately, due to high demand, competitors such as Google and Apple began to push Nokia out of the market with innovative smartphones.

In 2008, consumer demand for Apple’s iPhone was huge. The first weekend the second iPhone was released, Apple sold 1 million units.

The collapse of Nokia, combined with the European debt crisis, had a serious impact on the Finnish economy.

From 2008 to 2017, about 25,000 Finns left the company. In 2012, Nokia’s contribution to Finland’s GDP was negative.

Risks for Novo Nordisk and Denmark

Today, according to an analysis by Danish Danske Bank, Novo Nordisk accounts for almost half of the country’s GDP growth.

The Danish economy may face risks due to its dependence on one sector and one company.

“It’s not as dangerous as it could be in other places. But there are dangers associated with one sector being so reliant on so much growth,” Wertheim said.

Wertheim spoke with Hanne Sindbeck, an independent Danish journalist who has written two books about the history of Novo Nordisk and its founders.

Wertheim asked what impact Novo Nordisk would have if drugs like Wegovy and Ozempic continued to fall in price and insurers in the United States began subsidizing drugs for millions of Americans.

“Well, this will make him very, very rich,” she told Wertheim. “There may be competitors here and there.”

“But they were the first and the biggest…they have a very good chance of leading the field.”

However, there are ethical concerns about the high price of the drugs, and some people who could benefit from them are currently unable to afford them.

“Novo Nordisk (will) have these concerns. And there will be discussions at Novo Nordisk about this,” she told Wertheim.

The video above was produced by Will Croxton and Brit McCandless Farmer. It was edited by Sarah Schafer Prediger.