After reviewing the sector my top pick is Abbott Labs (ABT): well respected, good management, excellent long term track record, good capital allocators, very profitable (should earn over $4.00 in 2010 and over $4.50 in 2011), cheap (trading at a 2010 PE=11). What really separates them from the pack is their growth prospects (low double digit). Their business is also fairly diversified and they do not appear to be facing the patent cliff that others are, such as Pfizer.
My second pick is JNJ. I could say much of the same as ABT. The big difference is JNJ will likely grow mid to high single digits (due to its size).
My more speculative purchases are BAX, Pfizer and GILD. Bax has had some recent issues but I like its growth prospects looking out. Pfizer is cheap, facing a patent cliff and I am hoping it has something in its pipeline (stock price is saying no). Gilead is cheap, has no patent cliff issues and looks to be buying back lots of stock at current prices.
ABT, JNJ, BAX & GILD all have lots of cash and low debt.
Should the markets continue to sell off I will look to grow my position in ABT.