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It looks to me like there are rough days ahead for big companies in the healthcare industry, mostly because more and more people are starting to favor generic drugs over brand name medication. The companies with a larger share of the generic market are the ones that I expect to best weather the storm, but I'm not sure that this will be enough to keep even huge stocks like Pfizer (PFE) afloat.

In spite of widespread optimism and the steady upward trend that investors have witnessed since August of last year, I see reasons why Pfizer's value is about to plummet. First of all, my general analysis of the trend indicates that this stock is charging into a head-and-shoulders formation, in my opinion. If I am right, then the stock is going to reach one more peak before heading back down.

Additionally, the company is cutting back on severance packages for its workers. At first glance, this might seem like a savvy business move and an effective way to manage costs, but in this day and age, I expect this behavior to backfire. With Occupy and social justice on everyone's lips, current workers could strike and outsiders might target the company with disruptive actions aimed at improving the lives of the general public.

At the same time, Pfizer has fired 26,000 workers since it acquired Wyeth in 2009. To me, this suggests that its current workforce is probably understaffed and overworked, which could lead to sub-par products that might cause a ripple effect of dissatisfaction among consumers. Dissatisfaction in the health industry is no joke, as the company might see lawsuits emerging in the near future if its medications fail to meet social standards.

Even with these potential issues, it would be very likely that a company of this size would have no trouble overcoming a few obstacles. However, Pfizer has been suffering heavy losses since Lipitor, a medication for cholesterol, started competing with generic counterparts for the first time. Lipitor is one of Pfizer's biggest products, so any struggle this drug faces will reflect on the bottom line for sure. Meanwhile, Pfizer has not been reacting well, in my opinion, with Italy finding the company guilty of infringing on the country's antitrust law by trying to block sales of the generic version.

The news is not all bad, which makes me think that the stock could resist declining into a total lack of viability. A post-heart attack drug known as Inspra has recently been granted a new license in the United Kingdom, but I believe that this is a small victory. In my opinion, shareholders should probably start divesting themselves of these shares that I expect to become deadweight in the coming months.

The future of competitor stocks like Johnson & Johnson (JNJ) and Abbott Laboratories (ABT) does not look quite as bleak, in my opinion, but these companies could still be hard pressed to create real profits for their investors. While Johnson & Johnson is seeing some positive developments in drug regulatory approval for Levaquin, a pneumonic plague treatment, other signs hint at imminent problems, as far as I can tell. Unfortunately, pneumonic plague most strongly associated with biological warfare, and in spite of the government's constant state of alarm, I believe that it is very unlikely that there will be a big market for a drug like this any time soon. At least, I hope not.

Meanwhile, Johnson & Johnson is buying Quill technology intellectual property from Angiotech Pharmaceuticals (OTC:ANPIQ) in a transaction that will cost the former upwards of $20 million. To me, this move looks like Johnson & Johnson might be out of ideas for expansion at this point in time. Furthermore, generic versions of many of the company's products are undermining revenue, since people will intelligently opt for cheaper varieties of the same thing.

To me, this looks like a bad deal for both companies. Angiotech is losing a potentially valuable product, although it is admittedly bringing in some cash. Johnson & Johnson, on the other hand, just looks like it is flailing around for some sort of grip on the market that it seems to be losing.

Abbott might be able to keep its head above water and satisfy its investors better than some of its competitors, but none of these stocks appear to be good options at this point, in my opinion. Since at least 2009, Abbott has been losing substantial portions of its market to generic drug companies. As more and more patents expire, I expect to see this company's overall value decline, right along with Pfizer and the rest.

For now, Abbott seems to be doing reasonably well, with new hepatitis C drugs showing positive results in advanced studies. Unlike Johnson & Johnson's latest product, this medication will probably be in relatively high demand, so Abbott is a stock worth holding on to, but only for now, I believe. That being said, I would not recommend buying new shares in it at this time, contrary to popular belief and its steady upward rise since last year, because I will not be at all surprised when it comes back down.

At the end of the day, it seems to me that investors should be looking outside the pharmaceuticals industry for profitable stocks, and those who already hold shares in Pfizer probably should start selling them off very soon. Unless the four companies mentioned above can spread into the generic market in much more meaningful ways, I doubt that they will remain as powerful as they are for long. The only one worth even thinking about is Abbott, in my opinion, but even it will not be around forever, as I see it.

Source: 4 Pharmaceuticals That Could Plummet This Year