New rules set forth by Google in the past days will tighten up regulations for advertising drugs online. The new regulations set in place by Google will limit advertisers to placing ads online only in their respective countries.

This means that Canadian pharmacies will only be allowed to show their ads in Canada, American pharmacies in the United States, and so on and so forth.

According to an article from Barron’s, this could have a pretty big impact.

That sounds both logical and esoteric, but it has ramifications for ad revenue. Benjamin Schachter, an analyst with Broadpoint.Amtech, notes today that a test search of each of the top 10 best-selling subscription drugs on Google found that 68% of the ads on the first page of search results were from Canadian online pharmacies that would be disallowed under the new rules. For the top five drugs, 76% of the ads were for Canadian online pharmacies. (Try it; search for Lipitor, Nexium, or Plavix.)

Google says that the change will cause a slight drag in revenue, but I am sure that big pharma is more than making up for the difference somehow.