In one of the worst moves by a large pharma company in recent memory, Pfizer Inc. (NYSE: PFE) is tying up with doctor social network Sermo. According to The Wall Street Journal, "Pfizer-affiliated doctors will be able to talk candidly with the site's 31,000 members, potentially giving the company insights into prescribing patterns and a way to show doctors data on its drugs."

The paper points out that there is some risk in the move because the FDA and other federal agencies watch drug company communications with doctors very carefully. But Pfizer has cut its sales force and the internet may be a way for the company to do some not so subtle marketing.

The part of the plan that is really flawed is that Sermo could become a platform for groups of doctors to mount powerful criticisms of Pfizer drugs or offer clinical evidence that pending or current drugs may represent unacceptable risks to patients. In other words, the social network could undo as many sales as it makes for the big drug company.

It is Pandora's Box that Pfizer will wish it has not opened.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Now that Merck & Co. (NYSE: MRK) and Schering-Plough Corp. (NYSE: SGP) both posted better-than-expected second quarter earnings, will investors show some love to big pharma?

Shares of Merck are down about 5% over the past three months while Schering-Plough has eeked out a mere 2.5% gain. Perhaps investors are worried about Merck's Vioxx legal battles, which so far it has largely won, and the controversy surrounding its cervical cancer vaccine Gardisal. Schering-Plough's $14.4 billion acquisition of Akzo Nobel's Oreganon unit may also be concerning some people. Maybe people think that if Pfizer Inc. (NYSE: PFE) is up the creek, all big drug companies are in the same boat.

Regardless, both companies posted impressive numbers that should quell the concerns of investors. Their stocks remain pretty cheap. Merck trades at a forward price-to-earnings multiple of 17, slightly cheaper than Schering-Plough's 20.

Merck, based in Whitehouse Station, New Jersey, reported net income of $1.65 billion or 77 cents, up from $1.5 billion, or 69 cents a year earlier. Revenue jumped 5.9% to $6.1 billion fueled by demand for blockbusters such as the high-cholestoral treatment Vytorin which it makes in a joint venture with Schering Ploug. Excluding some costs, Merck earned 82 cents, beating the 72 cent-average estimate of analysts surveyed by Thomson Financial. The revenue figure also beat the $5.77 billion, analysts had expected.

Vytorin also boosted results at Kenilworth, NJ-based Schering Plough. Net income climbed to $539 million, or 34 cents a share, more than doubling from $259 million, or 16 cents. Revenue jumped 14% to $3.2 billion. Excluding some costs, profit was 41 cents, beating the conesensus forecasts of 35 cents. Revenue also beat expectations of $3.07 billion.

The boomer generation is limping toward retirement with pockets full of cash and bodies full of ailments, putting any drug company with top-drawer medications and solid patents in line for a windfall. Today's shakeup at Pfizer's (NYSE: PFE) drug-pipeline management, with the announced retirement of R&D president John LaMattina [subscription required], suggests the company isn't happy with the lack of success in restocking its shelves.

Pfizer, the largest pharmaceutical company in the world, realized 64% of its 2006 revenue from its top nine sellers. Unfortunately, the patents for those brands are rapidly expiring:

• Norvasc: 2007
• Zyrtec: 2007
• Lipitor: 2010
• Viagra: 2012
• Detrol: 2012
• Cardura X: 2008