Despite Schering-Plough's(NYSE: SGP) warning today, the number of new drugs approved by the Food and Drug Administration (FDA) this year is expected to rise from the 10-year low hit in 2002.

A report by Lehman Brothers suggests that at least 30 novel drugs, including seven biological products, could be approved for the market in 2003. Last year, only 25 new products were approved.

Between 1995 and 2001, an average of 45 new drug marketing authorizations were filed annually, about 50% above 2003 expectations. So there's still a relative shortfall of new drugs being filed. This dearth has received plenty of worried press, including laments that biotech has let us down. However, since research and development spending hasn't slowed, improvement is likely to arrive again, given patience. No industry can run on high-gear nonstop.

Companies in the hot seat this year -- that stand to gain the most or disappoint -- include GlaxoSmithKline(NYSE: GSK) and Eli Lilly(NYSE: LLY). Glaxo faces five possible drug approvals worth up to $4 billion in annual sales, according to Lehman estimates, while Eli has four drugs awaiting approval, worth up to $5.5 billion in yearly sales. In biotech, Millennium Pharmaceuticals(Nasdaq: MLNM) and Isis Pharmaceuticals(Nasdaq: ISIS) could both file cancer drugs for approval this spring.

Viagra, Pfizer's(NYSE: PFE) multibillion-dollar drug, may face two new competing products on the market. Eli Lilly and ICOS(Nasdaq: ICOS) are seeking approval for impotence drug Cialis, and Glaxo and Bayer(NYSE: BAY) are hopeful for their drug, Levitra. Given Viagra's brand recognition, the competition is at a disadvantage.

Overall, the FDA weighs safety against progress and speed. Patients benefit when new drugs get to market quickly, but only if they're safe. Caution causes delay in approving many drugs.