Are EU drugmakers less fussed by healthcare reform?

When GlaxoSmithKline (NYSE: GSK) said yesterday that it was able to absorb healthcare reform costs during the first quarter, it marked a departure from what we've heard from many U.S. companies. Sure, the new Medicaid rebates and other changes will cost money, the company seemed to say. But that's just part of the business.

Now, Sanofi-Aventis (NYSE: SNY) is taking a similar tack. So is AstraZeneca (NYSE: AZN), which has noted that its earnings forecast for this year "already included reasonable assumptions as to the impact from U.S. healthcare reform." As Bloomberg points out, the European drugmakers are, on the whole, handling the changes better than American companies seem to be. "This just doesn't seem to be as much of a drama for European companies," Royal Bank of Scotland analyst Michael Leacock tells the news service.

Why is that? Leacock notes that GSK and Sanofi are more diversified geographically, something that helps balance things out. Both companies also are diversified pricing-wise, he says; think the tiered pricing GSK has instituted in the developing world and the emerging-markets discounts Sanofi has announced, for instance.

Or consider GSK chief Andrew Witty's statement that prices in Europe have been declining by 3 percent every year. Perhaps those expectations make the new U.S. rebates seem less unusual.

- read the Bloomberg piece

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