Pfizer (NYSE: PFE) bit off the chip and is going back into the dip for seconds. While that'll get you looks of disgust at a party, it's perfectly acceptable in the drug-discovery world. They've even coined a name for it: "indications discovery."

The drug giant said yesterday that it'll provide $22.5 million to Washington University researchers over the next five years to study the potential of more than 500 drugs in new indications. The drugs are already approved or have been in the clinic for other indications; thus the double-dipping.

Studying drugs for additional indications makes sense. Proteins with which the drugs interact are often involved with different diseases in the body. Sometimes they're fairly related. Pfizer and Amgen's (Nasdaq: AMGN) Enbrel and Johnson & Johnson (NYSE: JNJ) and Merck's (NYSE: MRK) Remicade are approved for treating both rheumatoid arthritis and psoriasis, which are both autoimmune diseases. But sometimes the connection is a little less clear. Eli Lilly's (NYSE: LLY) Cymbalta is approved for both depression and fibromyalgia, a pain disorder.

And since the drugs have already been tested in the clinic, they have an established safety profile that a newly developed drug wouldn't have.

I just don't see why Pfizer can't do this on its own. Perhaps research scientists can simply do the work more cheaply. But if that were the case, why wouldn't Pfizer direct a clinical research organization (CRO) to run the studies instead? After all, CROs like Covance (NYSE: CVD) and Charles River Laboratories (NYSE: CRL) exist to do research on the cheap.

It seems like Pfizer is saying, "We have no idea what the heck these molecules might be good for. Here's some cash. Help us out."

There's nothing inherently wrong with that; one hit could easily pay for the initial grant. But I'd rather invest in companies that are able to hire researchers capable of making those discoveries, rather than renting them from a university.

Pfizer is a Motley Fool Inside Value selection. Johnson & Johnson is an Income Investor recommendation and Motley Fool Options has recommended buying calls on the stock. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Brian Orelli, Ph.D., has perfected the two-sided sterile dip. He doesn't own shares of any company mentioned in this article. The Fool's disclosure policy makes sure Brian has his own bowl of dip at parties -- just in case.