Sanofi's Viehbacher Backs Health Reform; May Change Company's Name

(MoneyWatch)  Sanofi-Aventis (SNY) CEO Chris Viehbacher says he favors healthcare reform in the U.S. because having more people with prescription drug coverage will lead to greater revenues. The statement is a rare example of common sense from a senior pharmaceutical executive on the issue.

While U.S. pharma CEOs have supported President Obama's healthcare plan, they have done so on the condition that it be hobbled by a ban on Medicare's ability to negotiate drug prices and with a lot of handwringing about safeguarding "innovation." "Innovation" is a byword for profits -- drug companies believe that anything that threatens their ability to make money will reduce future R&D funding.

Here's Viehbacher's statement, from the FT:

What impact will healthcare reform in the US have on the industry? There is going to be a shorter-term impact. Equally, it is in the pharmaceutical industry's interest to have better coverage. If your customers can't afford your product, you can't stay in business. So, I think, longer term, it actually strengthens the US market.

It is this simple equation -- uninsured people can't actually buy drugs -- that seems to have been largely ignored by most in the U.S. drug business, who firmly believe that Obamacare will destroy civilization as they know it. Their fear is that reform will turn the U.S. into a European or Asian-type country, where governments routinely nationalize on-patent drugs or control their prices. But, Viehbacher says, that's not as frightening as it sounds:

Is one of the pitfalls of being in emerging markets lower margins? You will have a lower gross margin, but you also spend less on commercial, and you don't necessarily need to spend 15 per cent of those sales on research and development. So, actually, in emerging markets, we have more or less the same profitability as in Europe.

Of course, we know this already. For every American drug company that believes it will bleed to death under health reform, there's a European company -- like Novartis, AstraZeneca, GlaxoSmithKline, Roche and Sanofi -- filled with execs scratching their heads, counting their profits, and wondering what all the fuss is about.

Bonus points: If you spotted that Viehbacher is thinking about changing Sanofi's name:

Mr Viehbacher also criticised the "ridiculous" Sanofi-Aventis name in China, where he said most company names have just three syllables. It would be shortened to Sanofi, he said. "We have to be much more adapted to our markets and customers and fight globalisation," he said.

• Related:
• Why Allergan and Medicis Should Embrace the "Botox Tax" in Senate Health Bill
• Peter Pitts' CMPI Targeted Over Anti-Healthcare Reform Video Game
• Sen. Franken Wants to End Tax Deductions on Drug Promotion
• What the Bosses of AZ, Novartis and Schering Didn't Say in Their Healthcare Roundtable
• Amgen, AstraZeneca and Their Lobbyists Were Lead Givers to Baucus' Warchest
• Sanofi Also Linked to FreedomWorks, Group That Urged Healthcare Town Hall Disruptions; Armey Quits DLA Piper