As the backlog of unreviewed generic applications has soared, the number of applications for newly developed or reformulated drugs and biologics submitted by brand-name companies has remained consistently smaller than predicted. But while the Office of Generic Drugs had about 200 employees to process almost 800 new applications last year, the offices that handle new drug reviews had more than 2,500 employees for about 150 applications in 2004.

The generics office budget was about $26 million last year, a fraction of the more than $400 million spent to evaluate and monitor new drugs and biologics, according to FDA documents. In response to questions from Congress, the agency said that the generics program would have to make cuts in 2006 to offset pay raises.

"We have a kind of crazy situation now where the FDA's generic reviews — which are supposed to be quicker because they're less complicated — on average take longer than the new drug reviews," said Kathleen Jaeger, president of the Generic Pharmaceutical Association. "The flood of applications is coming in generics, but the review resources mostly go to new drugs."

A generic drug — which comes on the market after a patent expires and must have the same active ingredients as the drug it mimics — usually costs 60 to 90 percent less than the brand-name version. The cost drops the most with the first generic alternative to a brand-name drug, but it falls more as each new competitor reaches the market.

Consumer acceptance of generics has increased markedly in recent years, and they now account more than 53 percent of prescriptions filled. IMS Health, which tracks the industry, predicts that percentage will rise above 65 percent within four years as several blockbuster drugs go off patent. Express Scripts, which manages pharmacy benefits for many insurers, estimates the figure could be 70 to 75 percent by 2010.

Drug experts say wider use of generics, which now account for about 12 percent of the nation's $250 billion a year in drug spending, could save billions. Because many generic drugs are antibiotics or other drugs that treat short-term conditions — rather than the chronic problems treated by brand-name cholesterol, blood-pressure and anti-depressant drugs — only 37 percent of drugs dispensed, as opposed to prescriptions, are generic, according to IMS Health.

Drug experts say the tidal wave of demand for generics reflects the high price of branded products, the large number blockbuster drugs going off patent, a big push by insurers and government to encourage generic usage, and an influx of cheap medicines made by Asian manufacturers. These companies are filing applications to market both drugs just coming off patent and lesser-used older medications without generic competition.