BUDAPEST (Reuters) -Higher U.S. tariffs may make it challenging for Hungarian pharmaceutical company Richter to export some products to the United States, but they won't apply to its flagship antipsychotic drug Vraylar, CEO Gabor Orban said on Wednesday.

President Donald Trump said on Tuesday the United States would initially place a "small tariff" on pharmaceutical imports before hiking it to 150% within 18 months, and eventually to 250%, to help boost domestic production.

However, a framework agreement between the U.S. and the European Union sets out that if the United States raises tariffs following its import investigation, they will be capped at 15%.

Orban, speaking on an earnings call, said the 15% tariff was painful and would harm the competitiveness of the European pharmaceutical sector.

Still, Orban said the tariffs do not affect Richter's flagship product, Vraylar, an antipsychotic drug produced and sold in the U.S. by AbbVie for the treatment of schizophrenia and bipolar disorder.

Richter's total royalty income from Vraylar sales was 229 billion forints ($665.58 million) in 2024, up 18% from the previous year.

Less than $50 million worth of Richter's exports to the U.S. will be impacted by the tariffs, but that could limit or halt some of its drug exports and affect plans for U.S. expansion in women's healthcare, Orban said.

"There is no point in moving Richter to the U.S." he said.

MAINTAINS FULL-YEAR FORECAST

However, some parts of production, such as filling up syringes, could be shifted to U.S. partners to exempt those drugs from tariffs, he said.

Gabor Orban also criticized the Hungarian government for giving a state subsidy to one of Richter's foreign competitors that is building a manufacturing plant in the town of Godollo, just outside Budapest.

Orban did not name the company, but his remarks come after Foreign Minister Peter Szijjarto announced in April the government would give 7.5 billion forints ($21.80 million) to Singaporean pharma company Hongene Biotech, which is building its first European plant in Godollo.

Richter reported second quarter results earlier on Wednesday, showing 11% growth in pharma revenue to 238 billion forints ($691.74 million) year-on-year.

The company maintained its full-year forecast of around a 10% growth in revenue and adjusted profit, or EBIT, excluding the effect of foreign currency exchange rates.

($1 = 344.0600 forints)