Local production of generic medicines in developing countries has a critical role to meet public health needs by ensuring the availability of essential medicines and providing patients' relief from the burden of unaffordable medical bills. Compliance with bioequivalence (BE) requirements increase the quality and competitiveness of generic drugs regardless of the source. In this regard, a regional BE center has been established in Addis Ababa, Ethiopia to serve the needs of Ethiopia and neighbouring countries. The present study aimed to assess the knowledge and perceptions of health professionals working in Addis Ababa regarding local production and BE studies of generic medicines. A cross-sectional survey was employed and physician participants working at public hospitals and pharmacists from various practice settings were selected using convenient sampling technique. Data was collected using self-administered structured questionnaire. Descriptive statistics was used to summarize the data and multinomial logistic regression analyses was used to assess predictors of health professionals' perception towards the source of drugs. Statistically significant association was declared at p-value < 0.05. A total of 416 participants responded and 272 (65.4%) of them were male. Nearly half of the study participants (n = 194) preferred the imported products. Compared to physicians, participants with diploma (AOR = 0.40; 95%CI: 0.18-0.91, p = 0.028) and bachelor degree and above holders (AOR = 0.32; 95%CI: 0.15-0.68, p = 0.003) in pharmacy were more likely to prefer locally produced products. Participants who practiced in pharmaceutical industries (AOR = 0.40, 95%CI: 0.22-0.77, p = 0.006) preferred locally manufactured products as compared to those practicing in the hospital. While a majority (321, 77.2%) believed in the advantages of doing BE studies locally, only 106 (25.5%) recognized that local pharmaceutical manufacturers did not implement BE studies for their generic products and lack of enforcement by the national regulatory body was raised as a reason for not conducting BE studies by most of the participants (67.9%). The present study revealed a modest preference by physicians and pharmacy professionals towards locally produced products. Majority of participants supported the idea of doing BE studies locally. However, manufacturers and regulators should devise ways to increase health professionals' confidence in local products. Strengthening local BE study capacity is also highly recommended.