OBJECTIVES: To investigate changes realized in the Czech pricing and reimbursement system since January 2008 and to describe the current development of this system. METHODS: We described the legal framework defining the Czech system (Act No. 48/1997 Coll. as amended by the Act No. 261/2007 Coll. on Public Health Insurance) as well as evaluation of the current system from the literature and reports provided by the State Institute for Drug Control (SUKL). RESULTS: In order to increase transparency according to EU Transparency Directive and to set fairly-defined deadlines the competencies for the pricing and reimbursement system were merged from Ministries of Finances and Ministry of Health (MoH) under one responsible institution - SUKL. The pricing rules were fully changed – the maximum price is set based as the mean value of all available ex-factory prices in the reference countries (Estonia, France, Italy, Lithuania, Hungary, Portugal, Greece and Spain). The reference reimbursement system contains 251 reference groups of therapeutically interchangeable products with similar clinical efficacy and safety (should be updated annually by MoH). Medicinal products included in one reference group have the main common therapeutic indication in the same reimbursement level which is calculated on the basis of retail prices in all EU countries. The cheapest price for equipotent dose is chosen and re-counted according to local pharmacy and wholesaler margins and value added taxes. In compliance with new legislation the pharmacoeconomic criteria (cost-effectiveness evaluation and budget impact analysis) should be taken into account. There is possibility of extra bonus of basic reimbursement for better efficacy, safety, dosing schedule, compliance, etc. CONCLUSIONS: The system has gone through dramatic changes in last two years and some aspects are still facing challenges. Although the new system should reassessed all medicines covered in the country till 2008, currently there are only 20% revised (April 2010).