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Richter expects government measures to cut next year's profits at least Ft 7 billion

Hungarian drug company Richter expects earlier announced government measures to result in a Ft 7 billion reduction in next year's profits, CEO Erik Bogsch said on Tuesday, after the publication of the company's Q1-Q3 report.

A projected rise in energy prices will add several billion forints to 2007 costs, Bogsch said. He added that the projection did not include the effects of inflation picking up from 2006. Profits will fall Ft 3.3 billion because of the government's requirement that drug companies pay back part of state subsidies on their drugs. The so-called solidarity tax -- a 4% tax on top of the corporate tax -- will reduce profits Ft 3 billion, and an increase in fees for drug sales representatives will take a Ft 700 million bite out of profits. The shortfall, Bogsch noted, is about half of Richter's annual R+D spending. The government's measures will put Hungarian drugmakers at a disadvantage in the long run, Bogsch said. The state owns a 25% stake of Richter. (Mti-Eco)