Generics still have a huge effect in driving down prices and patent cliffs for small molecules are as devastating as they have always been for big pharma. It makes sense that it's not easy to create a new generics company because it's such a perfect expression of the free market - fierce competition leads to the profits being competed away. It couldn't be cheaper to start a generics company (and there's plenty popping up overseas) - but there just isn't that much money in it unless you already have the infrastructure or have a competitive advantage in cost