Bioequivalence studies are pivotal in generic drug development wherein therapeutic equivalence is provided with an innovator product. However, bioequivalence studies represent significant complexities due to the interplay of multiple factors related to drug, formulation, physiology, and pharmacokinetics. Approaches such as physiologically based biopharmaceutics modeling (PBBM) can enable virtual bioequivalence (VBE) assessment through appropriately developed and validated models. Such models are now being extensively used for bioequivalence risk assessment, internal decision-making, and the evaluation of drug and formulation factors related to bioequivalence. Depiction of the above-mentioned factors through the incorporation of variability and development of a virtual population for bioequivalence assessment is of paramount importance in utilizing such models. In this manuscript, we have portrayed our current understanding of VBE. A detailed explanation was provided with respect to study designs, in vivo variability, and the impact of physiological, drug, and formulation factors on the development of the population for VBE. Furthermore, strategies are suggested to incorporate variability in GastroPlus with an emphasis on intra-subject and inter-occasion variability. Two industrial case studies pertaining to immediate and modified release formulation were portrayed wherein VBE was utilized for decision-making and regulatory justification. Finally, regulatory understanding in the area of VBE, along with future perspectives, was detailed.