NEW YORK (CNN/Money) - With at least seven competing drugs shouldering in, the multi-billion dollar market for treating elderly bones is getting crowded. There will probably be enough aging baby boomers to go around ... but expect some jostling.

"Just because a marketplace gets crowded doesn't mean that it will have a negative impact on sales," said Andrew McDonald, analyst for ThinkEquity Partners. "The market is certainly growing based on the demographics."

Three osteoporosis drugs -- Fosamax, Evista and Actonel -- are currently on the market, and a fourth drug, Boniva, recently became available. McDonald said that any osteoporosis drug has "blockbuster potential," since it treats a chronic disease inflicting millions of Americans and requiring years of treatment.

"After a few years, peak sales of any effective osteoporosis agent could reach well over $1 billion," said McDonald.

The numbers bear him out. The three osteoporosis drugs that have been on the market longer than a year are all blockbusters. Fosamax, a Merck & Co. (down $0.14 to $32.09, Research) drug that reverses the bone loss caused by osteoporosis, made $3.2 billion in 2004 and is the leading seller for the sector. The two competing treatments, Evista by Eli Lilly and Co (down $0.54 to $57.65, Research). and Actonel from Procter & Gamble (down $0.70 to $55.27, Research), each made $1 billion in 2004.

Boniva, a once-monthly osteoporosis drug co-developed by GlaxoSmithKline (down $0.42 to $49.60, Research) and Roche Holding (down $1.24 to $127.01, Research), was recently approved by the Food and Drug Administration and entered the market in April.

Should the drug makers and their shareholders be worried about overcrowding? No, according to Lehman Brothers analyst Anthony Butler, because there is "no lack" of patients needing drugs for osteoporosis treatment.

One half of all women and one fourth of all men over 50 will suffer an osteoporosis-related fracture in their lifetimes, according to the National Osteoporosis Foundation. Some eight million women and two million men have the disease, which eats away at bone tissue and increases fragility, and an additional 34 million Americans have low bone mass, putting them at added risk, said the foundation. Post-menopausal women are the most at risk, and analysts say that demand for the drugs will boom in relation to the aging population.

"The market is under-penetrated, that's for sure," agreed Barbara Ryan, an analyst for Deutsche Bank North America. But she pointed out that it might be tricky getting patients to actually use the drugs.

"There are a lot of patients who should be taking something and are not taking something," she said. "If you have pain, you're motivated to take your therapy. But if you're devoid of any symptoms, identifying the problem and then treating it becomes more difficult."

And in addition to fully exploiting the market, there's likely to be some jostling for market share. Merck's patent for Fosamax, the current market leader, is set to expire in 2007, leaving behind billions of dollars in potential sales for its competitors.

"A lot of other companies are trying to fill that void before it goes public," said McDonald.

And there are at least three products in the osteoporosis pipeline. Pfizer Inc. (down $0.24 to $27.96, Research) submitted its application for Oporia to the FDA in August, 2004, and the company and analysts expect the FDA to make a decision in the near future.

In addition, Wyeth (down $0.49 to $43.05, Research) is putting an osteoporosis drug, Bazedoxifene, through late-stage testing and could submit the drug to the FDA next year. If the FDA approves Bazedoxifene, it could be on the market as early as 2007.

Also, Amgen Inc.'s (down $1.39 to $61.49, Research) bone-rebuilding product AMG 162 is in late stage testing. If tests are successful and the drug is approved by the FDA, the potential blockbuster could be on the market by 2007, said CIBC World Markets analyst Matthew Geller.

"It could be huge," said Geller, who referred to AMG 162 as "potentially a multi-billion dollar drug."

If these products enter the market, the osteoporosis sector would be divided among seven separate drugs, albeit briefly, in 2007. The patent for Fosamax expires in August, 2007, followed by six months of market exclusivity. Once Fosamax loses exclusivity in 2008, at least six name-brand drugs would be trying to get a piece of its action.

In addition, the Israeli-based generic drug maker Teva Pharmaceutical (down $0.63 to $33.14, Research) is expected to release a generic version of Fosamax called alendronate sodium. Teva successfully fought Merck in January, when the U.S. Court of Appeals for the Federal Circuit ruled the patent for Fosamax Weekly to be invalid, shortening its term by 10 years. Merck said it would appeal to the Supreme Court.

And there may be some other opportunities. Some of the osteoporosis drugs are being tested for additional uses which could give them a competitive edge, said Ryan. In addition to osteoporosis, Evista is being tested for the prevention of breast cancer and Oporia is being tested for vaginal atrophy.

There are also some non-blockbusters on the market. Lilly has another osteoporosis drug, Forteo, which made $239 million in 2004 sales. According to the company, Forteo does not compete with the blockbusters because it treats a more severe form of the disease. In addition, Novartis produces a nasal spray that treats osteoporosis and made $377 million in 2004.

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Ryan does not own stock but Deutsche Bank owns stock in some of the companies mentioned here. McDonald does not own stock and ThinkEquity has no relations with companies mentioned here. Butler owns Pfizer stock but Lehman does not conduct banking with the company. Geller does not own stock in these companies and CIBC does not have relations with them.