OBJECTIVES Generic substitution might produce economic impacts beyond the reduction in spending for new generic product, such as increased number of users, and utilization of health care resources. The current study forecasts the economic impact of generic entry of the antiepileptic drug (AED) topiramate into the settings of France, Germany, Italy, and the UK. METHODS Health claims from Québec's provincial health plan (RAMQ) from January 2006 to September 2008, and IMS Health data on European AED sales between 1998 and 2008 were used. Patient-level health care utilization and costs in Canada were calculated during mutually-exclusive periods of brand versus generic use of topiramate (Topamax®). Annualized Canadian healthcare costs were projected for periods of branded and generic use in each country (€2007/person-year). Using market-level sales, branded and generic topiramate utilization were forecasted for 12 months following expected generic entry (September 2009-September 2010) using autoregressive and panel-data regression models. The economic impact of generic entry was projected for each country, stratified into its effect on market size, topiramate costs, and other health care costs. Budgetary consequences for individual, private, and government payers were assessed. RESULTS Projected per-patient health care costs in G4 European countries, excluding topiramate, would be significantly higher during generic-use periods (adjusted cost differences per person-year: €706 to €815, p<0.001 for all comparisons) compared to brand-use periods. Assuming mandatory generic substitution for all patients, predicted system-wide increases in total adjusted health care costs would range from 3.5% (UK) to 24.4% (France) 1 year after generic entry. Increases in non-topiramate health care costs (+13.7% to +18.1%) would more than offset savings in topiramate costs (–6.3% to –13.8%) in France, Italy, and the UK. These impacts would be evenly distributed among payers of each country. CONCLUSIONS Generic entry of topiramate in Europe would represent a trade-off between reduced generic drug expenditures and increased health care costs.