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Chip chop can’t have it back: Denmark makes 25 billion Kroner

The price of Danish companies’ export has increased by more than the price of the goods and services that we import from abroad. That has generated a billion-Kroner profit for Denmark, shows a new analysis.
Leo Pharma has experienced that there is a willingness to invest in new, innovative treatments that can make a significant difference for the patients. Photo: Leo Pharma

Publiceret: 31.01.2018
Af Peter G. H. Madsen mail

If Denmark was a grocery store, we would have done exceptionally well. Because we do to perfection what all grocers do. Buy cheap, sell expensive.

In the past five years, it has given the Danes an extra 25bn that they can spend. It corresponds to an annual profit of ¼ percent of the gross national product (GNP) on average.

This is what is demonstrated in an analysis conducted by the Confederation of Danish Industries (Dansk Industri) where focus has been turned to prices for goods and services bought and sold by the Danes and Danish companies abroad.

The development has been extremely positive and shows that goods and services from Danish companies are in high demand abroad, says Morten Granzau Nielsen, chief economist, Dansk Industri.

- When Danish companies can charge a high price for their goods and services, it reflects several things. Firstly, that the quality is high. Secondly, that the Danish companies are good at producing goods and services that can hold a high price for several years, says Morten Granzau Nielsen.

He explains that one of the reasons that the terms of trade between Danish and foreign goods and services are so good is that Danish companies sell relatively large quantities of medication abroad that hold their price well.

On the other hand, we import a lot of goods that have seen a fall in prices in recent years, e.g. electronics.

Read the entire analysis here

Healthcare budgets under pressure


One of the companies that has contributed to making profits for Denmark is Leo Pharma, a market leader within dermatology which has a great need for new forms of treatment.

- One out of four people worldwide suffers from a skin disease. These are conditions that may be disabling for the patients and have great socio-economic consequences. We therefore invest massively in developing new innovative pharmaceuticals that can address the increasing unmet need for treatment of skin diseases, says Kim Kjøller, Executive Vice President for Global Research & Development, at Leo Pharma.

Although there is a great market potential, Leo Pharma also experiences that politicians require ”value for money”.

- The healthcare budgets are generally challenged by the steadily growing ageing population. Again it means that politicians – naturally – require as much healthcare as they can get for their money. But we also experience that there is a willingness to invest in new, innovative treatments that can make a significant difference for the patients, says Kim Kjøller.

Severe international competition


Morten Granzau Nielsen, chief economist, Dansk Industry, also believes that we have to be careful not to take the profit for granted. It might be that Denmark since the turn of the millennium has only earned a profit from the terms of trade, but there is no guarantee that this will continue.

- The international competition is severe. If Danish companies do not constantly develop and refine their products, foreign competitors will be at their heels.  This may soon lead to lost market share and falling prices.

When Danish companies can charge a high price for their goods and services, it reflects several things.

CHIEF ECONOMIST MORTEN GRANZAU, DI
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PUBLISHED: 1/31/2018 LAST MODIFIED: 1/31/2018