We study the short- and long-term price effects of number of competing firms using panel-data on 1303 distinct pharmaceutical markets for 78 months. This is done using actual transaction prices in an institutional setting with little room for non-price competition and where simultaneity problem can be addressed effectively. In the long-term, the price of generics is found to decrease by 81% when the number of firms selling generics is increased from 1 to 10. Half of this reduction takes place immediately and 70% within three months. Also, prices of originals are found to react to competition, but far less and much slower; going from 1 to 10 firms reduces their price by 29% in the long term but by only 2% in the short term.