Banc of America Securities analyst Leonard Yaffe cut the firm's recommended weighting of drug stocks to a market weight, saying it believes growth of the U.S. drug industry could slow to an 8% to 10% rate during 2001 to 2005.

Yaffe said he believes the initial phase of the slowdown, from 15% to 18%, to 12% to 14%, is already occurring and that additional pressures should come from the upcoming patent expiration cycle and the prospect of generic drug substitution.

The note pinpointed


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, which it said has the greatest risk of companies facing $34 billion in upcoming patent expirations. Merck has exposure of $7 billion, while it said

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are well-insulated.