For investors who love putting their money towards pharmaceutical companies, it’s time to pay attention. Pfizer (PFE), one of the most well known pharmaceutical companies in the world, is in the hot seat this week. Analysts have been chatting about their upcoming acquisition, the billion dollar company called Hospira. Pfizer will pay $17 billion for it, including debts, which makes it one of the largest acquisitions in this industry in recent history.

Hospira is in a similar industry of course. Their business focuses on “biosimilar drugs” an industry that could be worth “$100 billion in coming years.” When put in that perspective, it’s clear that Pfizer was aiming for a long-term investment, even though several analysts seem to be confused and are implying that Pfizer overpaid for the pharmaceutical giant.

Pfizer purchased Hospira for $90 a share, when their shares actually hover at around $65. Because of this news, Pfizer shares have been up as well, but many are skeptical. The New York Times said that “Pfizer deals tend to look good in theory but fail in practice,” so investors want to tread lightly. Just because the deal seems quite impressive and substantial doesn’t mean it will necessarily be a good idea to invest in Pfizer.

Still, Pfizer seems to believe in their decision, and it could pay off in big ways. A significant amount of time will have to pass before we see if this decision was a smart one, but according to the Times, “By 2025, patents will expire on a huge number of so-called biologic therapies…Hospira is big in the fastest-growing and relatively new business of making non-branded copies of those drugs.” As evidenced, it seems like Pfizer has done their homework (which one would hope they would when making a $17 billion purchase.) Apparently Pfizer executives have taken tours of Hospira facilities and thoroughly understand the inner working of the company, despite Hospira having a history of manufacturing problems that created expensive losses. Plus, Pfizer will have to battle the FDA in the future, as the FDA has not currently approved biosimilar drugs in the USA, although the first steps have been taken in the last month with another drug.

So, to conclude, I do not think that Pfizer is crazy for wanting to invest $17 billion in Hospira. It was obviously a well calculated purchase, one that will add a significant amount of value to Pfizer as a whole. I tend to agree with other analysts that Pfizer really paid a premium for the company, perhaps too much. However, if the biosimilar drug market is going to expand as much as these experts are saying, Pfizer just jumped into the game early and claimed a large share of that market. There will definitely be some hectic moments, and Pfizer might lose value and go on a bit of a roller coaster over the next decade. However, if they can maintain their current profit level and find a way to gracefully fit in Hospira into their business plan, this is an investment that could significantly pay off in the years to come.