OBJECTIVES: Brand-Generic scheme was implemented in Iran to improve the competition in the market. In this study we aim to assess if this new policy has had any positive effect on efficiency of Iranian pharmaceutical companies. METHODS: We used Data Envelopment Analysis (DEA) to evaluate the relative efficiency of pharmaceutical companies for the years 1999-2008. The Wilcoxon matched-pairs signed-rank test and also sign test were used to assess the difference between mean relative efficiency of companies before and after policy. RESULTS: Although the Wilcoxon matched-pairs signed-rank test did not show any significant difference between before and after new policy in term of both technical and pure (managerial) efficiency of included companies (Pvalue: 0.079 and 0.07, respectively) but the one–sided sign test indicated that only relative pure (managerial) efficiency has improved after this policy (Pvalue: 0.031). CONCLUSIONS: The "Brand-Generic scheme" does not seem to be enough policy to improve efficiency of pharmaceutical companies in Iran. To achieve this aim, paying special attention to infrastructural requirements including non-discriminating and transparent laws and regulations for supporting competition, the competitive pricing policies, the presence of international companies in the market and full privatization of companies had to be also considered by policy makers.