Pfizer, the largest pharmaceutical company in the world, said second-quarter earnings fell 48 percent as sales of its flagship drug, Lipitor, slumped 25 percent in the United States.

The earnings decline was much steeper than analysts' forecasts.  Revenue fell 5.6 percent.

Pfizer has been hurt by Pfizer the loss of United States patent protection on the antidepressant Zoloft and blood pressure drug Norvasc.  Competition in cholesterol drugs has also grown.

The biggest loss is still to come. Generic versions of Lipitor, the best-selling prescription medicine in the world with annual sales of $7 billion, will be permitted in 2010.

The quarterly results underscore the challenges faced by Pfizer. The company is trying to fatten up a thin pipeline of new drugs and it has been cutting salesforce jobs and reorganizing under its new chief executive, Jeffrey Kindler.

A drug that Pfizer had high hopes for, a heart medication called torcetrapib, had to be halted in development after clinical trials showed it increased the risk of death.

"They are losing drugs at a much faster rate than they can replace them,'' Jeffrey Kraws, an analyst with Crystal Research Associates, told Bloomberg News.