A $10 billion market that's currently untapped in the U.S.? There's no doubt generics of biotech drugs, known as "biosimilars," are a buy.

But be careful investing in them. Unlike their small-molecule counterparts, getting approved won't be nearly as easy. I count nine different manufactures making copycats of Pfizer's (NYSE: PFE) Zithromax and 18 companies that have gained approval to sell generic versions of Abbott Labs' (NYSE: ABT) Vicodin. That kind of ease of approvability isn't going to happen for protein-based drugs.

The health-care reform bill gave the Food and Drug Administration a mandate to set up a regulatory pathway for approval, but the exact requirements for approval haven't been set up yet.

There's no doubt though that the FDA will want to be completely confident that the generic version is just as effective as its brand-name counterpart. For small-molecule drugs, that's fairly simple; proving that the drugs have the same molecular structure is routine.

Proving that two protein-based drugs are the same is a lot more complex. The drugs are produced in living cells, so there are many variables to worry about. No matter how much the companies try, the follow-on biologics won't be exact copies of the drugs. That's the reason the FDA calls them biosimilars and not bioidenticals.

The difficulty in production will provide a moat where only a few drugmakers will be able to develop biosimilars, and the prices will probably be close to that of the branded counterpart.

So who's likely to be the first movers? Europe already has a pathway for approval, so the players there -- Teva Pharmaceutical Industries (Nasdaq: TEVA), Novartis (NYSE: NVS), and others -- are a good start. We'll likely see brand-name drugmakers with experience in protein-based drugs also developing biosimilars; Merck (NYSE: MRK) and Pfizer (NYSE: PFE) have already announced their intention to develop biosimilars.

I don't know of any company that's a pure play on biosimilars, and I'm not sure you'd want to invest in one if you found it. Those that will thrive in the new industry will be ones with lots of resources to bring biosimilars to market.

Think I'm wrong? Know of a development-stage drugmaker working on biosimilars? Sound off in the comment box below.