NEW YORK - U.S. drug makers are expected to report a lackluster first quarter, reflecting an ongoing struggle with product withdrawals, a dearth of new drugs in the pipeline and increased competition from generics.

Profits at most major drug makers will be driven by the companies' ability to hold down costs, rather than by bringing in more revenue from existing products, said C.J. Sylvester, an analyst with Banc of America Securities.

''We believe the industry is in the latter stages of a cyclical downturn in [research and development] productivity,'' Sylvester said in a research note.

Two exceptions could be Wyeth Laboratories Ltd. and Eli Lilly & Co., Sylvester said. Wyeth is experiencing strong sales of its anti-inflammatory drug Enbrel, its vaccine Prevnar and its anti-depressant Effexor. And revenue is rising for Lilly's cancer drugs Gemzar and Alimta.

Another bright spot could be Johnson & Johnson, which has a diverse offering of pharmaceuticals and medical devices that helps protect it from sales slumps, said Le Anne Zhao, a Caris & Company analyst.

''One product does not determine how the company does,'' Zhao said. ''They are very dynamic and the company is excellent.''

However, the high-profile withdrawals of one type of prescription painkillers, known as Cox-2 inhibitors, continues to cast a shadow over the industry, analysts said.

Merck & Co. Inc. halted sales of its blockbuster drug Vioxx in September, after studies linked the drug to heart attacks and strokes.

Pfizer Inc. initially resisted pulling its two Cox-2s, Bextra and Celebrex. But last week, Pfizer gave in to pressure from regulators and withdrew Bextra from the market. The better-selling Celebrex is still for sale, but some observers wonder if patients and doctors will shy away from the drug in favor of over-the-counter pain medications.

Merck's and Pfizer's first-quarter earnings will suffer from the Cox-2 withdrawals, analysts said. In fact, Pfizer's Cox-2 sales likely fell as much as 30 percent in the first quarter, Sylvester said.

Pfizer's withdrawal of Bextra came just two days after the company announced a sweeping restructuring plan designed to cut costs by $4 billion annually by 2008. The company said it would close factories, cut jobs and reorganize its U.S. sales force, but offered scant details of the plan.

Still, investors are hopeful Pfizer's plan will prompt other drug makers to launch restructurings of their own.

Bristol-Myers Squibb Co. is still struggling with patent expirations and high costs for research and development. In addition, sales of its cholesterol drug Pravachol continue to decline at the hands of Pfizer's more popular Lipitor and generic competition in Europe.

In the midst of turnaround, Schering-Plough Corp. is expected to narrowly avoid losing money for the quarter. Investors will be looking for news on Vytorin, a cholesterol drug that Schering recently launched with Merck.

''Vytorin is the main thing for the company,'' Zhao said.