According to SUKL (State Institute for Drug control) spending on drugs rose by 13% y/y in the Czech Republic in 2005 to CZK64.57bn or cUSD265 per capita while the number of packages supplied to pharmacies grew by 9% y/y to 368.95m, which is the fastest y/y growth since 1995 while the average price rose by 3.2% y/y to CZK175. We believe that the Czech pharmaceutical market still offers a high growth opportunity as the drug spending per capital is still almost at half of the value compared with the original EU-15 countries. Nevertheless, the current government pressure on drug spending reduction may lead to a weakness in the total spending in 2006. The initiative, however, should represent an opportunity for generic producers like Zentiva. We reiterate our Buy recommednatin.