Abstract: When entering the market, pharmaceutical firms face various regulatory factors that will influence the producer prices for their products. Price competition occurs when generic medicines enter the market. Previous studies of the pharmaceutical market have shown different regulatory means and their influence on producer prices and patient demand in the off-patent segment. More regulations are known to have a negative influence on price competition as well as they may attract less generics into the market. A lack of price competition is a problem among most countries. This thesis reviews key studies and introduces a theoretical model into the discussion. It applies price competition à la Bertrand to the Norwegian market for off-patent medicines. The research issue of this thesis is to analyze the effects on producer prices on drugs from introducing differentiated price caps and differentiated patient co-payment rates.