Part of the blame for that 4 percent difference, the company said, lies with the passage of the US healthcare reform bill, which cost the company $60 million in higher Medicare price rebates. While CEO John Lechleiter was careful to laud the bill’s positive effects—more affordable meds for seniors, better access for the uninsured in general—he said Lilly “will incur substantial costs” to its business. Some of those costs will come from increased development fees, some from higher taxes, and yet others from patent losses.

Other members of the Big Pharma club have yet to announce their Q1 earnings—many will release their numbers next week—but a report by Express Script gives cause for caution.

Higher drug costs increased total spending 6.4 percent from 2008 to 2009—an increase tempered in part by patent expirations, since the price of branded drugs shot up 9.1 percent.

The industry is already seeing a shift toward the development of more specialty drugs, and the report supports that move with the reveal of a 19.5 percent spending increase in that area. This includes biologics, a niche in which companies should tread carefully now that healthcare reform has provided an approval pathway for biogenerics.

But after a slight reprieve in 2011, Express Script expects price growth to cross into negative territory again after Effexor (venlafaxine), Lipitor (atorovastin), and Seroquel (quetapine) go off-patent.

DJ Edgerton

For those of you who didn’t know, it’s Social Media Week. Granted, the week is almost over, but the panel that you all care about didn’t take place until yesterday afternoon here in NYC.

The panel’s mouthful of a name—“Navigating Social Media & New Technology in Healthcare & Pharmaceutical Industries”—is nevertheless an accurate description of the discussion. Perspectives ranged from physicians (one Jay Parkinson, who essentially started his practice with Google Calendar and an iPhone) to Big Pharma marketers (Ned Russell of Saatchi Wellness).

DJ Edgerton (pictured), CEO of digital creative firm Zemoga said pharma is really dragging its feet on the social media issue because of compliance and liability. “The number one driver of social media in pharma is adverse event reporting,” he said. “So they’re disabling their Facebook walls, not interacting with the community, because they’re afraid.” Which, he added, defeats the purpose of social media.

Of course, once the industry finally does go beyond just dipping a toe in this pool, the implications are revolutionary. Russell and Parkinson foresee the disappearance of the traditional “brand.” Instead, “campaigns” will focus on patient education, possibly directing consumers to the new KOLs—their peers.

Even now, pharma brands have little or no traction in the social media world. While consumer products like sneakers and Slim Jims thrive, as Parkinson pointed out: “No one wants to ‘friend’ Lipitor.” Those who follow companies or brands on Twitter are almost exclusively people in the industry or connected to it. In exchange for real online “patronage” (so to speak), companies need to offer some real value—most likely in the form of information.

Edgerton had some pretty powerful closing advice for the industry: “Be not afraid.” The biggest mistake a company can make right now is to ignore social media. Take the risk and reap the rewards.