NEW YORK (CNNMoney.com) - Big Pharma could land billions of dollars in annual sales that it would have lost to generic competitors thanks to a Food and Drug Administration backlog of applications for generic drugs.

Some $100 billion worth of branded drugs are expected to go off patent over the next five years. In theory, this should translate into lost revenue for branded drug companies because they would face a plunge in sales as they compete with low-cost generic versions of their drugs.

But the FDA's Office of Generic Drugs, which reviews applications for generic drugs, faces a bottleneck of some 800 applications. This is the result of a 36 percent surge in applications last year, according to the Generic Pharmaceutical Association, citing statements made by Gary Buehler, director of the Office of Generic Drugs, at a GPhA conference in February.

"Over the next few years, it's really going to be a problem, as more drugs go off patent," said GPhA spokeswoman Andrea Hofelich.

This is bad news for generic drug makers like the industry leader Teva Pharmaceuticals (down $1.24 to $39.90, Research). But it's great news for Big Pharma companies like Pfizer (down $0.40 to $24.69, Research), Merck (down $0.37 to $34.47, Research), Johnson & Johnson (down $0.67 to $57.83, Research), Eli Lilly & Co. (down $0.94 to $53.54, Research), Bristol-Myers Squibb (down $0.30 to $24.51, Research) and others, which can continue to sell their branded drugs after their patents have expired without any generic competition. There are $20 billion worth of drugs going off-patent in 2006 alone, according to Andrew Forman, an analyst for WR Hambrecht & Co. He calculates that if 50 percent of the applications for those generics can't get through the backlog, that could translate into $10 billion in annual sales that the branded drug companies wouldn't have had otherwise, or an extra $5 billion in profits.

Forman, who likened to the backlog to a jammed-up EZ Pass toll booth, said the Office of Generic Drugs' $26 million budget can only handle about 400 approvals a year, which is half the backlog.

He also speculated that the insufficient budget for the Office of Generic Drugs could be the result of Big Pharma's efforts to stymie the introduction of generic competition. "Perhaps Big Pharma's lobbying power has had an effect in cutting the budget," said Forman.

Generic drugs are typically 80 percent cheaper than brand-name drugs. U.S. sales for brand-name drugs totaled $251.8 billion in 2005, compared to $22.3 billion for generic drugs, according IMS Health, which said generic sales grew more than 20 percent last year. Despite the fact that branded drugs account for 10 times the revenue of generic, more than 50 percent of all prescriptions in the U.S. are for generic drugs, said the GPhA. According to the Congressional Budget Office, generic drugs save consumers $8 billion to $10 billion per year.

Bernstein analyst Gbola Amusa said the bottleneck is the inadvertent result of the Hatch-Waxman Act, passed in 1984 with the intention of speeding up the flow of generic drugs. Amusa said that as a result of this act, the first generic drug maker to file applications with the FDA is the only generic drug maker permitted to produce a drug for the first six months after a patent expired. During this time, the original drug maker and the first-to-file generic company are the only makers of the drug, and the price plunges 40 percent. After the six months, it opens up to all generic drug makers and the price plunges 80 percent.

Thanks to that pricing differential, a generic drug company who is first to file "could conceivably make more in that six months than in the following five or six years combined," said Amusa.

Generic drug makers will often sue branded companies to challenge the validity of their patents as a means of landing that first-to-file status; as part of the suits they will file applications with the FDA to produce the generic drugs. Even though many of these patent litigation cases are unsuccessful, Big Pharma companies will often settle with the generic manufacturers because billions of dollars in potential sales are at stake, said Amusa. This has encouraged the filing of patent challenges and applications, and contributed to the FDA backlog.

"It left us with a flawed system where they try to get there first and they challenge patents even if they feel they're not going to win," said Amusa. "The system is broken."

To read about how the FDA has tried to streamline the drug approval process, click here.