OBJECTIVES: To estimate the budget impact of the reimbursement of a follow-up on patent medicine prior to the patent expiry of the original brand, from a third payer’s perspective, based on the alendronate case. METHODS: The Belgian trade name for alendronate is Fosamax® (patent expiry: April 2008).  The basis for reimbursement (reference price) for generics is set by law at minus 30 %. The originator company introduced Fosavance® (fixed combination with vitamin D – patent expiry: 2018) in July 2006.  Using registered consumption data from RIZIV, the evolution of the monthly expenses for alendronates was considered and expected annual expenses were estimated with or without the reimbursement of Fosavance®. RESULTS: The monthly expenses for Fosamax® decreased from €2.7 Mio prior to the reimbursement of Fosavance® to €1.4M by July 2007.  Simultaneously the expenses for Fosavance® increased to €1.4 M.Only 52% of the market (in value) is left for generic competition. The monthly opportunity savings are estimated to be 30% of €1.4M (€0.52M) instead of 30% of €2.7M (€0.81M). The opportunity loss is therefore €3.5M per year assuming constant market value (137,500 patients treated with alendronates in 2006). CONCLUSIONS: The alendronate patent expiry and generic competition would theoretically have generated an economy of 30% on the entire alendronate market . The switch to the patent-protected fixed combination however shelters a substantial part of this market from generic competition and from the effects of the off-patent reimbursement policy. Therefore, this ‘life cycle management’ technique jeopardizes the release of financial resources and the creation of budget headroom, essential for financing the access to new and/or innovative medicines. It should be considered as an opportunity 'lost'.