Consequently, as a way to mitigate the costs, regulators have laid the groundwork for generic biologics – health care savings from biosimilars could range from $25 billion to $250 billion over the 2014 to 2024 period. Biosimilars is also gaining traction as major U.S. presidential candidates have publicly called for controlling skyrocketing drug prices.

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The increased focus on the space could help biosimilars grow from $2.4 billion in 2014 to $26 billion by 2020 on the expiration of patent protection for blockbuster biologic drugs. Evaluate Pharma calculated that biologics with aggregate U.S. sales of $79 billion will lose their patent protection between 2013 and 2018.

GNRX’s underlying index also includes about a 15% tilt toward biosimilars. Moreover, generic drug companies included in the underlying index are looking into biosimilars as their next growth opportunity.

Market Vectors Generic Drugs ETF