MRK is the best value, disregarding its secure, high dividend.
Reason: PFE is highly regarded in Wall Street, MRK isn't. Everyone loves in-your-face Hank on TV, MRK's old CEO was hated. MRK's new CEO looks like he will be loved and you will have that going for you -- if it happens. MRK pulled its painkiller and is being sued; PFE didn't and isn't being sued.
Being in MRK has the advantage of more negatism that could shift your way. It's hard to see PFE having better news ahead, but MRK is more likely. The litigation bad news is built into the MRK stock price.
The Vioxx lawsuits are a drag, butt -- yes, Virginia -- they will go away, and with little damage to MRK. So, with the exception of the first run-loose jury trial (on appeal), MRK has not lost on the first, initial question all juries must face -- was MRK negligent with Vioxx; was Vioxx per se unsafe?.
Pipelines? I see the two companies about equal on that front. And, both will have to face a Big Bad Government which, inevidently, will force some sort of price controls on pharma (despite the patent laws) to control costs from that ill-advised prescription drug entitlement sponsored by deficit-hawk Bush.
Short-run, pharma is a buy, and MRK a better bet than PFE. Long-run, I'm far more worried about the politics than that Vioxx cases.
PFE still has lipitor and its billions of revenue dollars. mrk loses zocor in the summer. pfe has less lawsuit exposure (mrk potential losses estimated as high as 50 billion dollars) if mrk starts to lose those suits expect pfe to tumble as bextra and celebrex start to see filings against them. mrk's behavior in the marketplace counts heavily against them, ask you local pharmacist what they think of mrk. mrk's dodgeball strategy in dealing with doctors is gonna cost them both in pr and in the courts. vioxx smears mercks golden name, back that up with their arragance and you have a recipe for disaster. i personally see pfizer's win yesterday as a negative for merck. lipitor staying on patent hurts vytorin and mrk's other lame zocor/niacin combo. why buy that crap when i can have lipitor? the new trend in pbm transparancy will impact all the manufacturers in that they cannot but market share as easily as they do now. medicare part d should add dome volume, but that assumes you still have drugs in the marketplace bye-bye zocor once again.