When a new product hits the market, you’d expect it to cost the most. But that’s not what happens with first generic entries. Instead, the moment a competitor releases a cheaper version of something everyone thought was expensive, prices don’t just dip-they collapse. And it’s not just drugs. This same pattern shows up in software, electronics, and even cloud services. The question isn’t why prices drop-it’s why they drop so fast and so hard.
What Is a First Generic Entry?
A first generic entry is the very first time a competitor releases a functional copy of a product after its original patent or market exclusivity ends. In pharma, it’s when a drug company starts selling the same medicine as a brand-name pill but for a fraction of the cost. In software, it’s when a startup offers a database or CRM tool that does almost everything the big players do-but without the license fees. The key isn’t just that it’s cheaper. It’s that it’s good enough. Most first generic products deliver 80-90% of the original’s features. For most users, that’s all they need. And when you realize you can get 90% of the power for 20% of the price, you don’t wait. You switch.Why Prices Plummet Immediately
The price drop isn’t a mistake. It’s a strategy. Incumbents used to rely on scarcity. If you were the only company selling a certain drug or software, you could charge what you wanted. But once someone else enters the market with the same thing, that power vanishes. Take the example of the Sony Bravia 4K TV from 2015. It launched at $1,799. Within a year, competitors flooded the market with similar models. By the end of the year, that same TV was selling for $899. Not because Sony gave up. Because they had to. In pharmaceuticals, the data is even clearer. According to the Congressional Budget Office, the first generic version of a single-source drug cuts prices by an average of 76% within six months. Some drugs drop 90%. Why? Because once the patent expires, manufacturers don’t need to recoup billions in R&D. Their costs are mostly production and distribution. That’s it.It’s Not Just About Cost-It’s About Trust
People assume generics are low quality. But that’s not true anymore. In 2022, a Reddit user wrote about switching from Oracle’s database to PostgreSQL. Their licensing costs dropped 78%. Performance? Identical. Downtime? Less. Support? Slower at first, but now they’re using community forums and paid consultants who know the system inside out. G2, a software review site, found that first generic software tools hit 4.5 stars out of 5 within a year. Why? Because users aren’t buying based on brand. They’re buying based on value. The top reason? “I saved money without losing features.” Even big companies like Microsoft noticed. When cloud-based alternatives started offering cheaper database services, Microsoft didn’t fight. They changed. In 2022, they rolled out consumption-based pricing for Azure SQL Database. Their effective price dropped 35% overnight. Why? Because they had to match the new reality.
How Generic Entry Changes the Game for Everyone
This isn’t just about price. It’s about control. For years, vendors held all the power. They set the rules, the contracts, the upgrade cycles. But when a $500 alternative shows up for a $10,000 product, customers start asking: “Why am I paying so much?” Enterprises are now evaluating generic alternatives within three months of launch. In 2018, only 32% of Fortune 500 companies did this. By 2023, it was 67%. Why? Because IT budgets are tight. Gartner found 68% of CIOs are under pressure to cut costs. If you can replace a $50,000 license with a $10,000 one and get the same results, you don’t need approval from five layers of management. You just do it. And it’s not just software. In electronics, commodity hardware and open-source platforms like Linux and Apache have cut production costs by 25-40%. That’s why you can now buy a digital music player for under $50-even though Apple’s first iPod cost $399 in 2001.The Hidden Costs of Going Generic
It’s not all smooth sailing. Some users report 20-30% more setup time. Integration can be messy. Support isn’t always as fast. TrustRadius found 28% of early adopters ran into compatibility issues. But here’s the thing: those problems are fixable. Most companies outsource the migration. Training takes 40-60 hours per admin-expensive, but still cheaper than annual license fees. And once the system’s running, 81% of users stick with it. Why? Because the savings keep coming. The real cost isn’t the setup. It’s the cost of not switching. If you wait, you’re paying more than you need to. And by the time you decide to act, the price gap has already widened.
Nigel ntini
December 7, 2025 AT 10:05It's wild how fast the market shifts once the patent expires. I've seen it in pharma, in software, even in cloud hosting. The incumbents think they're untouchable until someone builds a better, cheaper wheel-and then everyone just walks away. No drama, no fanfare. Just quiet, mass migration. The real lesson? Value beats branding every time.
And honestly? It's good for consumers. We win. The only ones who lose are the ones who refuse to adapt.
Priya Ranjan
December 9, 2025 AT 00:53People still don’t get it. This isn’t innovation-it’s theft. Companies spend billions developing these products, and then some low-cost manufacturer copies them and calls it ‘good enough.’ That’s not progress. That’s exploitation. And now we’re rewarding it with applause? Pathetic.
Gwyneth Agnes
December 9, 2025 AT 20:49Price collapse is inevitable. Stop pretending it’s not.
Ashish Vazirani
December 11, 2025 AT 13:21India is leading this revolution, you know? Open-source, low-cost, high-performance-this is what our engineers do best. While Western companies sit on their patents like hoarders, we’re building the future. PostgreSQL? We’re the biggest contributors. Linux? Mostly Indian devs keeping it alive. And you wonder why your $10,000 software is now $1,000? It’s because we didn’t wait for permission to innovate.
Mansi Bansal
December 12, 2025 AT 21:27One must acknowledge, with the utmost seriousness, that the phenomenon under examination constitutes a structural paradigm shift in the value proposition of proprietary intellectual capital. The commoditization of formerly protected technological ecosystems, while ostensibly beneficial to end-user constituencies, engenders a deleterious erosion of incentive structures for foundational R&D investment. The net result? A race to the bottom, monetarily and intellectually. One cannot help but lament the loss of nuance in favor of efficiency.
Kay Jolie
December 13, 2025 AT 23:19Okay but like-have you seen what happens when a SaaS company goes open-core? It’s not just cheaper-it’s *better*. You get the core functionality for free, then pay for the enterprise-grade bells and whistles. It’s like Netflix’s free trial… but for databases. And suddenly, Oracle looks like a 2005 Blackberry. The market didn’t change. The vendors just stopped listening. And now? They’re scrambling to rebrand as ‘consultants’ instead of ‘license vendors.’
pallavi khushwani
December 15, 2025 AT 04:34I think this is kind of beautiful, honestly. It’s like nature. When one species becomes too dominant, another evolves to fill the gap. The original product? It was the big tree blocking the sun. The generic? The weed that grows in the cracks. Neither is ‘better’-they just serve different needs. And the best part? The weed doesn’t care if you think it’s ugly. It just keeps growing.
Maybe we’re not supposed to own everything. Maybe we’re supposed to share.
Billy Schimmel
December 16, 2025 AT 20:25So what you’re saying is… the market finally figured out that nobody actually needs a $50,000 CRM. We just thought we did because the sales guy smiled a lot.
Good. Now I can sleep at night.
Shayne Smith
December 18, 2025 AT 18:06I switched from Salesforce to HubSpot’s free tier 3 years ago. Haven’t looked back. My team’s happier. My boss is happier. My bank account? Very happy.
Also, I didn’t need a 10-person team to ‘integrate’ it. Just me, a weekend, and YouTube.
Geraldine Trainer-Cooper
December 19, 2025 AT 18:40It’s not about price. It’s about ownership. When you buy a license, you’re renting a cage. When you use an open alternative, you’re walking free. The original vendor thought they sold software. They actually sold control. And now? The cage is empty.
Nava Jothy
December 19, 2025 AT 23:07Why do people keep praising these ‘cheap’ alternatives?? 😭 They’re unstable! They have no UI! The docs are written by interns who barely speak English!! And don’t even get me started on ‘community support’-I spent 14 hours on Stack Overflow just to get a CSV to import. 😭😭😭
But hey, at least it’s free… I guess. #FirstWorldProblems
Kenny Pakade
December 21, 2025 AT 12:21Oh wow, so now we’re celebrating piracy as ‘innovation’? Let me guess-next you’ll say it’s fine to copy Hollywood movies because ‘it’s good enough.’
These aren’t ‘generic entries.’ They’re intellectual theft. And the fact that people cheer for it just proves how lazy and entitled we’ve become. If you want cheap, go to China. But don’t call it progress.