In Saudi Arabia, health care expenditure is growing rapidly due to demographic and policy reasons. The drivers that dramatically increase health care demand and expenditure include, high population growth with a rising share of the ageing population, unique health risk factors and the introduction of progressive policies such as compulsory health insurance coverage for expatriate workers. Indeed, Medication is provided for free for both citizens and expatriates in Saudi Arabia. Spending on drug prescription has increased sharply in recent years with a growth rate faster than other major components of the health care system. Many countries have taken some initiatives to contain the rising pharmaceutical expenditures. However, Evidence shows that simultaneous government regulation of both supply ( influencing doctor and patient) and demand (influencing pharmaceutical manufacturers) would result in ultimate control of pharmaceuticals and pharmaceutical expenditures, paying more attention to the use of generic drugs as a good toll to provide substantial saving in health care cost without affecting the quality of the therapeutic effect of the prescribed medicine. However, the adoption of generic drugs is complex phenomenon and many determinants can affect it. In Saudi Arabia, generic drug prescribing has become a common practice; however, the prices of generic Drugs has not been assessed. Based on the results of our analysis, the prices of generic in Saudi Arabia are not too high, whenW compared to those. in Australia and the US, we conclude that in Saudi Arabia there is significant differel1ce between the prices of originator brands and generic brands; and between the prices of different brands of generics. In Australia, there was generally no significant differences between prices of originator brands and generic brands and between prices of different brands of equivalent generics. Saudi Arabia should review its current policies on curbing the rising expenditure of pharmaceuticals and achieving the ultimate goal of cost containment. There is scope for the Saudi government to expand the existing generic market and therefore save a substantial amount of money. However, the regulatory bodies in the deliberately evaluate generic applications in order to reduce the bioequivalence problem, and implement an effective post-marketing surveillance system for generics.