OBJECTIVES:  After the patent expires for a branded pharmaceutical, generic drug companies generally sell bioequivalent versions of the drug, leading to lower prices. Considering more drugs over a longer period of time than previously in the literature, the objectives were to (1) describe the trends in branded and generic drug prices post-entry; and (2) estimate the effects of drug, firm, and market characteristics on branded and generic prices. METHODS:  The primary data source was the Medicaid State Drug Utilization Data maintained by the Centers for Medicare & Medicaid Services.  Quarterly utilization and expenditure data from 1991-2008 were extracted for 83 drugs that experienced initial generic entry between 1992 and 2004.  A relative price for a specific drug, firm, and quarter was constructed as Medicaid reimbursement per unit divided by average reimbursement per unit of the branded drug the year before entry.  Autoregressive fixed-effects and random-effects models were estimated to explain relative drug price. RESULTS:  For the 83 drugs, prices for 229 firms were followed from the first quarter of generic entry until 2008. Twelve quarters after generic entry, 17% of drugs had average relative generic price less than 50% of the original branded price. The number of firms had a statistically significant (p<0.01) negative effect on price.  For each additional firm manufacturing the generic drug, average price was estimated to fall by 8 percentage points. Higher demand had a statistically significant (p<0.01) positive effect.  No statistically significant price premium for either early entry or firm size was found.  Injectable drugs had prices that fell less (p<0.01) than other drugs.  CONCLUSIONS: Results are consistent with earlier studies showing that branded-drug prices rise and generic drug prices fall as more generic firms enter.  However, this fall is not as strong for injectable drugs or for drugs with high demand.