OBJECTIVES: Pharmacy benefit managers (PBMs) market their ability to accelerate use of newly-approved generic drugs among enrollees based upon the use of the PBMs' wholly-owned mail order drug facilities. Higher utilization rates of newly-approved generic drugs result in an economic benefit to enrollees and plans. This study examines the differences in the diffusion of a newly-approved generic drug product between mail order and retail pharmacy channels. METHODS: Pharmacy claims data for branded and generic versions of citalopram were collected from a large state employee prescription drug program in Texas consisting of over 400,000 enrollees beginning in November 2004 (representing the launch date of the newly-approved generic). In addition, claims data were collected from the Texas Medicaid Prescription Program during the same time period, for comparison. Claims were collected for the first six months post-generic launch. Total outstanding “drug product in possession” was calculated for each day post-generic launch based upon a sum of the days supply for the branded and generic drug for claims dispensed previous to, and during, the post-launch period. Trends were examined in the percent of total outstanding days supply represented by the branded or generic citalopram. RESULTS: At days 30, 60, 90, and 120 post-generic drug launch, percentage of generic drug product utilization (based upon outstanding days supply) for mail order claims was 22%, 53%, 91%, and 96%. Retail claims showed generic utilization of 52%, 70%, 74%, and 78%. Medicaid program rates were 9%, 37%, 56% and 72%, respectively. Mail order generic utilization rates of citalopram were lower than retail pharmacy utilization rates until day 77 post-generic drug launch. CONCLUSIONS: While the mail order pharmacy channel realized higher utilization rates over the retail pharmacy channel of a newly-approved generic drug product at four months post-launch, rates were higher in retail setting during the first 11 weeks.