OBJECTIVES: Generics are commonly accepted to contribute significantly to treating disease by improving the affordability of pharmaceuticals. Once the patent expires for an originator brand, generics erode prices through creating fierce competition. The objective of this study is to investigate on Turkish pharmaceutical policies over generics through measuring how much they lower the prices, and then develop alternative strategies to maintain higher level of price reduction and hence saving. METHODS: Claims data from Turkish Social Security Institution for all ambulatory care drugs reimbursed were collected monthly in the period of January 2009 to December 2013. First, the share of generic drugs both in terms of sales volume and value were calculated. Then, selected 12 equivalent groups each relying on same molecule were evaluated and saving impacts due to generic entry were computed. Finally, the price erosion for 15 generics entering the reimbursement list in 2012 as first generics was measured. RESULTS: Only 48% of all units sold was prescribed as generic drugs, whereas it was only 31% when it comes to value. For 12 equivalent groups constituting nearly 7% of SSI drug spending, the price erosion was nearly 41% ranging from 8% to 74%. Interestingly, when a first generic having an originator brand whose any form were marketed before 1987 in any country entered the market, new discounted public price was higher than the price with no generic. Finally, in the first year of the first generic entry, on average the prices were only shrunk by 39% with an increase of 41% in units sold. CONCLUSIONS: Turkey is not maximizing its full potential with respect to generic medicines. Therefore, it is of great importance that policies such as therapeutic equivalence, tendering, and aggressive generic pricing policy to stimulate higher savings need to be introduced.