Pharma a defensive play no more

Some big stocks were down to multiyear lows last week--including Pfizer and Merck, a deveopment that runs counter to pharma's traditional position as a defensive stronghold. Typically, investors see drugmakers as "safe" during down markets because patients need their meds no matter what the economy does.

Not so anymore, analysts are saying. Big Pharma's woes are well-known by now--patent expirations, aggressive generic competition, reimbursement pressures, fewer brand-new meds to tout. In Pfizer's case, it took the huge settlement with Ranbaxy over Lipitor to goose the stock upward last week. And then it fell back again. Merck got a setback with its new cholesterol med when the FDA asked for more data. To one big investor, the market's reaction to last week's news just shows how far pharma needs to go to get back into investors' good graces.

- see the item at Wall Street Journal's MarketBeat blog