With its recent merger with PharMerica Inc., the country's largest supplier of pharmaceuticals to long-term care providers, Bergen Brunswig corp. has taken what appears to be the most traditional alternative of the three leading drug wholesalers.

Although times are heady for the pharmaceutical industry, Morgan Stanley Dean Witter analyst Paul Brooke doesn't think the boom will continue. Industry growth will be stymied by genericization and the introduction of fewer big new products. At the same time, the industry faces restraints on its pricing flexibility, one of the keys to its recent success.

Technology innovation and product differentiation are the keys to success in medical devices, says Dan Lemaitre, Global Sector Head, Health Care, for SG Cowen Securities Corp. and one of the device industry's leading experts. From implantable cardiac defibrillators to cardiovascular stents, Lemaitre argues, the record is clear: the winners are those companies that can develop new technology with meaningful clinical benefits. The losers not only lose their technological edge, but often resort, futilely, to pricing strategies to try to hold their markets.

Fresh from their defeat at the FTC over proposed acquisitions of other large drug wholesalers, the country's two largest pharmaceutical distributors, Cardinal Health Inc. and McKesson Corp. announced major acquisitions this month, albeit in strikingly different areas.