Denmark Healthcare Market Bouncing Back After Recession

Wednesday 6 February 2013, Amsterdam

The Danish healthcare market is showing healthy signs of recovery following the crippling global financial crisis of 2008, says the latest report from business intelligence providers.

The firm’s new report* predicts Denmark’s pharmaceuticals sector to grow from US$4 billion in 2011 to US$7.3 billion by 2020, representing a Compound Annual Growth Rate (CAGR) of 6.9%. This expected growth follows three years of shrinking pharmaceutical revenue for the north European country.

Additionally, Denmark’s medical devices sector is forecast to grow from 2011’s total of US$1.4 billion, to US$2.3 billion by the end of the decade.

GlobalData attributes Denmark’s healthcare industry expansion to a growing elderly population: 16.8% of Danish citizens were 65 years old or older in 2011, with this proportion reaching 19.6% by 2020, according to Statistics Denmark.

Additionally, Denmark’s pharmaceutical market will be bolstered by investment in innovative products. Novo Nordisk, along with other Danish firms such as LEO Pharma and Lundbeck, invest 15%–20% of their revenues in R&D. Furthermore, the country’s biotechnology sector spent approximately US$5.2 billion on R&D in 2011 – the second highest in Europe.

However, Denmark is not lacking in obstacles to overcome. At 25%, Value Added Tax (VAT) in the country is higher than that of other countries in the EU (UK and the Netherlands have 20% and 19% respectively), and wages in Denmark are higher than all other nations in the Organization for Economic Co-operation and Development (OECD), with the exception of Norway. Consequently, manufacturing and sales costs are substantial in Denmark.