OBJECTIVES: This study evaluates pharmaceutical companies pricing strategies after generic entry into the New Zealand market in the period 2007-2012, and its effects on drug utilization and expenditures. METHODS: Market data derived from IMSHealth. Data include active ingredient, route, dosage form, strength, brand/generic status, prescription drug (Rx)/over-the-counter status, date of market entry, ex-manufacturer standard unit sales, and ex-manufacturer NZ dollars sales. NZ$ were adjusted to 2012 using the NZ consumer price index. Study sample includes the 37 products of the top 125 products by sales in the period 2007-2012 that experienced generic entry during the study period. RESULTS: Sales of products in the top 125 by sales amounted NZ$3.1 billion; 46.6% of the overall NZ market. Brands accounted for 95.8% of the expenditures. The average ex-manufacturer price per standard unit was NZ$55.9 (95%CI: NZ$43.8-67.9) for Rx, and NZ$ 685.8 for therapeutic biologics (95%CI: NZ$482.3-889.2). The median price at generic entry date was 27.4% of the median brand price. The median price at generic entry date of study sample was NS$1.18 per unit for brands and NS$0.32 for generics. In 2012, the median price per unit was down to NZ$0.83 and NZ$0.22 for brands and generics, respectively. Standard unit sales increased on average 14% (95% CI 7%-21%) after first year of generic entry. Several brand products (clopidogrel, letrozole, omeprazole, pantoprazole) were discontinued after generic entry. CONCLUSIONS: Generic entry resulted in an average 30% reduction in the average drug price. Brand companies either reduced the brand price to match generic prices, or maintained the brand price at levels immediately before generic market entry. The first strategy resulted in the brand keeping large market unit and NZ$ shares, and a decline in total NZ$ sales. The second strategy resulted in a rapid decline of brand product market unit and NZ$ market shares.