Trump’s quest for Greenland could make Ozempic even more expensive
New York
CNN
—
President-elect Donald Trump's quest to buy Greenland from Denmark could make Ozempic and Wegovy, the weight-loss and diabetes drugs exploding in popularity, even more expensive for Americans.
Trump has cranked up the pressure on Danish officials to sell the strategically important North American island, turning to his go-to tactic: Threatening tariffs. Massive ones.
During a press conference on Monday, Trump vowed to slap "very high" tariffs on Denmark if it doesn't sell the island to the United States. Greenland is a self-governing entity inside Denmark's kingdom. (Trump also declined to rule out military force to seize Greenland.)
Broadly speaking, high tariffs on Denmark might not cause significant trouble for American consumers because Denmark is not a huge trading partner with the United States. Danish goods account for less than half of 1% of total US imports.
However, the United States did import around $5.7 billion worth of pharmaceutical products from Denmark in 2023, according to the most recent annual United Nations trade data compiled by Trading Economics.
That figure is likely even higher for 2024 because Novo Nordisk, the Danish pharmaceutical giant, makes one of the hottest drugs on the market: Ozempic.
Americans have increasingly turned to Ozempic and its sister drug, Wegovy, which have been approved to fight diabetes and obesity, respectively.
Ozempic is so popular that Novo Nordisk's market value has skyrocketed to almost $300 billion.
If Trump imposes steep tariffs on Denmark, it could at least temporarily increase the consumer price of the highly sought-after Ozempic and Wegovy, according to trade experts.
"Novo Nordisk retains a sizable monopoly power on the market," said Jacob Funk Kirkegaard, senior fellow at the Peterson Institute for International Economics. "If Donald Trump decides it's going to cost 50% more, Novo Nordisk can say, ‘Fine, we'll just charge American consumers that much more.'"
Each package of Ozempic costs nearly $1,000, prior to discounts or insurance, according to Novo Nordisk. Wegovy is listed above $1,300 per package.
Already, the American price is many times higher than the drugs' prices in other countries. A key focus of Trump's first term was to close that gap. These tariffs could widen it.
‘Trying to get their attention'
Experts say Novo Nordisk could find legal ways to circumnavigate the tariffs, though such moves may not be possible immediately.
In theory, the incoming Trump administration could exclude Wegovy and Ozempic from potential tariffs.
The Trump transition team did not respond to a request for comment.
There are many uncertainties, including how serious Trump is about buying Greenland or using tariffs to force a deal.
"With Trump, tariffs are a go-to tool. He is trying to get their attention," said Christine McDaniel, a former trade official in President George W. Bush's administration who is now a senior research fellow at George Mason University's Mercatus Center.
And he has gotten their attention. As CNN previously reported, Danish officials fear Trump is much more serious about acquiring Greenland than he was in his first term.
Robots transport packages and goods at the Novo Nordisk A/S pharmaceutical manufacturing facility in Hillerod, Denmark, on November 27, 2024.
Charlotte de la Fuente/Bloomberg/Getty Images
Ozempic has a global footprint
It's also gotten the attention of officials at Novo Nordisk.
"We will follow the situation closely," a company spokesperson told CNN in a statement. "The geopolitical landscape in today's world is very dynamic, and we remain focused on our commitment to deliver lifesaving medicines to the patients we serve."
Novo Nordisk declined to comment on "hypotheticals and speculations."
Most of the active ingredient for Ozempic and Wegovy, called semaglutide, is made in Denmark, according to investment bank BMO Capital Markets.
However, Novo Nordisk has facilities that fill the containers and package them around the world, including in the United States. The company been ramping up its US footprint and does make some of the active ingredient in Clayton, North Carolina.
Evan Seigerman, a biotech and pharma equity research managing director at BMO Capital Markets, said it's hard to know how much consumers would be impacted by US tariffs on Denmark. He said patients who pay out of pocket would be impacted more than insured patients.
The United States also imports various machinery, medical devices such as hearing aids and other goods from Denmark.
Even just the threat of tariffs can cause stockpiling and increase prices, according to McDaniel, the Mercatus Center fellow.
"It definitely won't decrease prices," McDaniel said.
The injectable weight-loss medication Wegovy is available on April 24, 2024 in Chicago.
Scott Olson/Getty Images
Trade war risk
US workers could be hurt if Trump's tariffs on Denmark escalate into a tit-for-tat.
Kirkegaard, the Peterson Institute senior fellow, said that the entire European Union would be "compelled to respond" to the tariffs with levies of its own on products made by Americans at US facilities.
The United States exported $351 billion of goods to the EU in 2022, the second-largest destination behind Canada, according to federal data.
"This could spiral into a broader US-EU trade war," Kirkegaard said.
Kirkegaard expressed dismay at Trump's use of threatened tariffs to get Denmark to sell Greenland.
"It's outrageous. Denmark is a democracy and a treaty ally of the United States," he said. "Here, Donald Trump is saying, ‘Nice territory you have got there. I like it. If you don't sell it to me, bad things will happen to you.' It's reminiscent of how Vladimir Putin talked about Ukraine before 2022."
