NEW YORK (CNN/Money) - Next week, millions of diabetics will find out what the government's experts think about inhalable insulin, a treatment that could let them throw away their needles.

A panel of experts advising the Food and Drug Administration is due to vote on Sept. 8 on Exubera, an inhalable form of insulin developed by Pfizer Inc. (unchanged at $25.10, Research), the world's biggest drugmaker, and Nektar Therapeutics (Research), a California company that is trying to get its first drug on the market.

"There are millions of diabetics who need to take insulin who won't because they're afraid to use the needles," said Andrew Forman, analyst for WR Hambrecht. "This is the first time in 80 years you've had a noninjectable form of insulin. There's been pent-up demand for this product."

A yea vote usually means FDA approval is only a few months away, as the agency follows the advice of its experts most of the time. A nay vote could delay the regulatory process and cost the drugmakers more money as they try to address the panelists' concerns.

Many analysts consider Exubera a convenient product and a potential blockbuster, though the drug has its skeptics who find fault with the way it's delivered.

The FDA panel decision will be watched closely by five other drugmakers who have much at stake, as they are also developing inhalable insulin. Exubera is at least two years ahead of its potential competitors, according to industry experts.

The target population for any diabetes treatment is huge and growing.

There are 18.2 million diabetics in the United States, including an estimated 5.2 million who have not even been diagnosed yet, according to the American Diabetes Association.

There are 1.3 million newly diagnosed diabetics every year. And another 41 million Americans have "pre-diabetes," or high blood-sugar levels, and are at risk for developing adult onset type 2 diabetes, the most common type.

"You're talking about very rapid adoption," said Forman, who believes that Exubera will be approved in the United States and Europe this year and could be on the market as early as next January. He forecasts $1 billion in annual sales by 2008.

Other industry analysts also view Exubera as a potential blockbuster, with David Moskowitz of Friedman, Billings, Ramsey & Co. projecting $1.3 billion in sales by 2008, David Steinberg of Deutsche Bank projecting $1 billion by 2008, and Bernstein analysts projecting $1 billion by 2011.

But some experts believe Exubera's lack of data regarding its use in smokers and children could stymie its approval with the FDA.

The drug, which is inhaled into the lungs as a fine powder, has also been criticized for having a less-efficient mode of delivery that injecting insulin directly into the blood. Diabetics would have to inhale about seven times as much insulin as they would inject to get the same effect. While detractors talk about the expense of wasted insulin, supporters insist that insulin is cheap.

Albert Rauch at A.G. Edwards & Sons projects that Exubera's annual sales will be paltry, not even reaching $1 million, because it won't be as convenient as some people believe. Rauch said diabetics might have problems controlling how much insulin they breath in and they'll have to inhale insulin much more often than they would have to inject it.

"[Exubera] is a fast-acting insulin and right now, most of the market is going towards long-lasting insulin, like Lantus," said Rauch, referring to an injectable, modified form of the drug from Sanofi-Aventis (Research) that had $1 billion in sales last year.

"Fast-acting insulin is something you have to use several times a day. With Lantus, you inject it twice a day and you're done," he said.

The panel's vote will be closely watched by Eli Lilly & Co. (Research), Alkermes (Research) and Mannkind Corp. (Research), which are also developing dry powder insulin products. Meanwhile, Novo Nordisk (down $0.06 to $51.69, Research) and Aradigm Corp. (down $0.01 to $0.99, Research) are working on inhalable liquid insulin.

"This is going to set the standards for all the other inhaled insulins that are in development," said Rauch, referring to the panel vote on Exubera.

The FDA is facing a big week for diabetes drugs.

On Sept. 9, the FDA advisory panel is also considering the dual-use diabetes drug muraglitazar, also known by its trade name Paragluva. Muraglitazar is developed by Bristol-Myers Squibb (up $0.04 to $24.19, Research) with partner Merck & Co. (down $0.01 to $28.11, Research) as the marketer. The drug has been shown to lower blood sugar in type 2 diabetics and reduce the risk of heart disease.

On Tuesday, the FDA approved Actoplus Met, a diabetes pill from Takeda Pharmaceuticals North America. The combination pill controls blood-sugar levels in diabetics.

Rauch and Forman do not own Pfizer's stock, but A.G. Edwards does.

To read more about the FDA's big week with diabetes drugs, click here.