Mylan Laboratories Inc · 10-K · For 3/31/94

Filed On 6/14/94   ·   SEC File 1-09114   ·   Accession Number 69499-94-54

Annual Report   ·   Form 10-K
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      SECURITIES AND EXCHANGE COMMISSION
      Washington, D.C. 20549

                                                        [Enlarge/Download Table]


                                                                                                          
                                       FORM 10-K                                                          
       (Mark One)                                                                                         
    / /  Annual Report pursuant to section 13 or 15(d) of theSecurities                                   
         Exchange Act of 1934 [Fee Required] for the fiscal year ended March                              
         31,1994 or                                                                                       
    / /  Transition Report pursuant to section 13 or 15(d) of the Securities                              
         Exchange Act of 1934 [No Fee Required] for the transition period                                 
         from _________ to _________                                                                      
                              Commission File No. 1-9114                                                  
                               MYLAN LABORATORIES INC.                                                    
                (Exact name of registrant as specified in its charter)                                    

              Pennsylvania                                                   25-1211621                   
       (State or other jurisdiction of incorporation ororganization)     (IRS Employer Identification No.)
           130 Seventh Street                                                                             
          1030 Century Building                                                                           
        Pittsburgh, Pennsylvania                              15222                                       
       (Address of principal executive offices)              (ZipCode)                                    
Registrant's telephone number, including area code:  412-232-0100                                         
Securities registered pursuant to Section 12(b) of the Act:                                               

                                                                            Name of Each Exchange         
                         Title of Each Class                                 on Which Registered          
                         -------------------                                 -------------------          
                   Common Stock, par value $.50 per share                   New York Stock Exchange       
Securities registered pursuant to Section 12(g) of the Act:   None                                        

  Indicate by checkmark whether the registrant (1) has filed all                                          
reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of                     
1934 during the preceding 12 months (or for such shorter period that the registrant was                   
required to file such reports), and (2) has been subject to such filing requirements                      
for the past 90 days.                                                                                     

                               Yes/ /                 No/ /                                               

        Indicate by checkmark if disclosure of delinquent filers                                          
pursuant to Item 405 of Regulation S-K is not contained herein, and will not be                           
contained, to the best of registrant's knowledge, in definitive proxy or information                      
statements incorporated by reference in Part III of this Form 10-K or any amendment to this               
Form 10-K.[  ]                                                                                            
        The aggregate market value of voting stock held by                                                
persons other than Directors and Officers of the registrant computed by reference to the                  
closing price of such stock as of April 30, 1994:                                                         
                                    $1,440,211,990                                                        
The number of shares of Common Stock of the registrant outstanding as of April 30, 1994:                  
                                      79,213,013                                                          
        Documents incorporated by reference into this Report are:                                         
 Annual Report to Shareholders for year ended March 31, 1994...... Parts I and II,                        

                                                                   Items 1, 5-8                           
 Proxy Statement for 1994 Annual Meeting of Shareholders. . . . . .Part III, Items 10-13                  

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                                  PART I                                                                  


ITEM 1.  Business                                                               

Mylan Laboratories Inc., a Pennsylvania corporation                   
incorporated in 1970, and its subsidiaries (herein referred to                  
collectively as the "Company") are engaged in the development,                  
manufacturing and distribution of pharmaceutical products for                   
resale by others. The Company's objective is to become a fully                  
integrated pharmaceutical company. References herein to fiscal                  
1994, 1993 and 1992 mean the fiscal years ended March 31,                       
1994, 1993 and 1992, respectively.                                              

Through its subsidiary, Mylan Pharmaceuticals Inc., the               
Company is recognized as one of the leaders in the generic                      
pharmaceutical industry.  Pharmaceutical products initially                     
sold on an exclusive basis are known in the industry as                         
proprietary or branded products. Generic drugs are                              
therapeutically equivalent to their brand name counterparts and                 
are generally sold at prices significantly less than branded                    
products.  Accordingly, generics provide a safe, effective and                  
cost efficient alternative to users of these products.                          

The Company manufactures substantially all of its oral dose           
products in either its Mylan Pharmaceuticals subsidiary's                       
Morgantown, West Virginia facility or its subsidiary                            
Mylan Inc.'s facility in Caguas, Puerto Rico.  To facilitate                    
timely delivery of products to customers in all fifty states the                
Company operates distribution centers in Greensboro, North                      
Carolina and Reno, Nevada.                                                      

Due to the non-exclusive nature of generic products, the              
generic industry is comprised of numerous competitors including                 
manufacturers who market their products under their own                         
name, distributors who market products manufactured by others and               
brand name companies, who in recent years market their products                 
under both the brand name and as the generic substitute.                        
Historically, this diversity provides significant price                         
competition within the generic pharmaceutical industry which                    
generally results in decreasing prices of generic products over                 
time to those who supply such products to the retail market.                    

In June of 1989 the Company acquired a 50% interest in                
Somerset Pharmaceuticals, Inc. ("Somerset").  Pursuant to a                     
license agreement with a Hungarian pharmaceutical company,                      
Somerset has exclusive marketing rights to the product Eldepryl                 
in the United States and certain other countries.  Commercial                   
shipments of the product by Somerset commenced in late August,                  
1989.                                                                           

Under the Orphan Drug Act, Somerset has exclusivity relating          
to marketing the chemical compound Eldepryl  for use as a                       
treatment for late stage Parkinson's disease through June of                    
1996.  Under the Waxman Hatch Act, Somerset has exclusivity for                 
all uses of the chemical compound through June of 1994.  Somerset               
is actively involved in research projects regarding additional                  
uses of the chemical compound.                                                  

During September, 1990 Somerset entered into an agreement             
with Sandoz Pharmaceuticals Co. Ltd. ("Sandoz") to co-promote the               
product Eldepryl .  Under the terms of the agreement Somerset                   
reimburses Sandoz for certain advertising expenses and pays                     
Sandoz a co-promotion fee predicated upon sales.                                

In October of 1991, a wholly-owned subsidiary of the Company          
merged with Dow Hickam Pharmaceuticals, Inc. ("Hickam"), an                     
established high quality branded pharmaceutical company located                 
in Sugar Land, Texas.  Hickam currently manufactures and/or                     
markets specialty pharmaceutical products and devices used                      
principally as wound care treatments through its nation-wide                    
sales force.                                                                    

On February 25, 1993 the Company acquired substantially all           
of the net assets of Bertek, Inc. ("Bertek").  Bertek,                          
headquartered in St. Albans, Vermont is a manufacturer of                       
transdermal drug delivery systems and also has operations in                    
laminating, coatings and label manufacturing.  Bertek currently                 
provides components, using internally developed technology                      
for transdermal patches marketed by other companies.  The Company               
is actively involved in development projects using Bertek                       
technology to provide new products for marketing by its                         
subsidiaries.                                                                   

In October, 1990 Congress passed the Medicaid Prudent                 
Pharmaceutical Purchasing Act of 1990.  Under the Act, the                      
Company is required to pay a rebate to each state predicated on                 
the number of prescriptions for the Company's products reimbursed               
by the states under Medicaid.  The Act was effective January 1,                 
1991.                                                                           

The pharmaceutical industry along with the health care                
industry in general has been targeted for reform by the current                 
administration.  The extent or form of any changes which may                    
affect the pharmaceutical industry are highly speculative at this               
time.  The Company believes that the Federal government                         
commitment to contain drug costs along with state substitution                  
laws, emphasis of cost containment by third party payers,                       
changing quality perception and a growing elderly population,                   
will favorably affect the market for generic products.                          

Products                                                                        

The information on the Company's product line set forth on            
page 2 and 3 of the Annual Report to Shareholders for the year                  
ended March 31, 1994, is incorporated herein by reference.  All                 
pharmaceutical products presently manufactured by the Company                   
have been previously developed and marketed by other firms with                 
the exception of Maxzide and Maxzide -25MG.                                     

The Company is required to secure and maintain approval from          
the U.S. Food and Drug Administration ("FDA") for the products                  
and dosage forms which it manufactures. The number of products                  
and dosage forms for which the Company is an approved                           
manufacturer has expanded in recent years.  See "New Products                   
Approvals".                                                                     

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During fiscal 1994, 1993 and 1992 approximately $21,648,000,          
$13,524,000 and $7,885,000 respectively, were applied by the                    
Company to the development of formulations and procedures for                   
products which it desires to produce, use or sell.  The Company's               
research and development efforts are conducted primarily to                     
qualify the Company to manufacture ethical pharmaceuticals under                
FDA standards and approval.                                                     

New Product Approvals                                                           

During fiscal 1994, eight approvals were received from the            
FDA.  The Company presently has approximately 16 additional                     
requests for approval pending before the FDA, representing 31                   
products of varying strengths.                                                  

Customers and Markets                                                           

The Company sells its products to proprietary and ethical             
pharmaceutical wholesalers and distributors, drug store chains,                 
drug manufacturers and public and governmental agencies.  Sales                 
to one customer, McKesson, represented 12% and 10% of net sales                 
in 1993 and 1992 and to Lederle Laboratories which represented                  
12% of net sales in 1992.  No single customer represented more                  
than 10% of net sales in 1994.                                                  

A majority of the Company's products are marketed to food             
and drug store chains and to pharmaceutical distributors and                    
wholesalers, who in turn market to retailers, managed care                      
entities, hospitals and government agencies.  Certain other                     
products are marketed to institutional accounts who in turn                     
obtain the products from pharmaceutical distributors and                        
wholesalers.  The Company's sales activities involve limited                    
public promotion of its products.  Approximately 125 employees of               
the Company are engaged full-time in selling products and                       
servicing customers.                                                            

Competition                                                                     

The Company sells to various markets and classes of                   
customers.  With respect to each of the various products it                     
sells, the Company believes it is subject to active competition                 
from numerous firms.  The four primary means of competition are                 
services, quality of products, approval for manufacture by the                  
FDA and price.  The competition experienced by the Company varies               
among the markets and classes of customers.  The Company has                    
experienced additional competition from brand-name competitors                  
who have entered the generic pharmaceutical industry through the                
creation of generic subsidiaries, purchasing generic companies or               
by licensing their products prior to or as their product's                      
patents expire.                                                                 

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Product Liability                                                               

Product liability suits by consumers represent a continuing           
risk to firms in the pharmaceutical industry.  The Company                      
strives to minimize such risks by stringent quality control                     
procedures.  Although the Company carries insurance, it believes                
that no reasonable amount of insurance can fully protect it                     
against all such risks because of the potential liability                       
inherent in the business of producing pharmaceuticals for human                 
consumption.                                                                    

The Company has a 50% investment in a captive insurance               
company. This unconsolidated subsidiary provides product                        
liability insurance for the Company for claims not covered under                
other product liability policies, reported or incurred. The                     
Company's participation in the captive insurance company has                    
substantially reduced its product liability insurance expense.                  

Raw Materials                                                                   

The chemical ingredients and other materials and supplies             
used in the Company's pharmaceutical manufacturing operations are               
generally available and purchased from many different foreign and               
domestic suppliers.  However, some products may have only one                   
source approved by the FDA for certain pharmaceutical ingredients               
used in their manufacturing process.  If this material was no                   
longer available, qualifying a new supplier could delay the                     
manufacturing of such products. The Company experienced no                      
significant problems in obtaining an adequate supply of raw                     
materials in fiscal 1994.                                                       

Regulation                                                                      

The Company's operations are subject to regulation under the          
Federal Food, Drug and Cosmetic Act, pursuant to which government               
standards as to "good manufacturing practice", product content,                 
purity, labeling, effectiveness and recordkeeping (among other                  
things) must be observed.  In this regard, the FDA has extensive                
regulatory powers over the activities of pharmaceutical                         
manufacturers including the power to seize and prohibit the sale                
of noncomplying products and to halt operations of noncomplying                 
manufacturers.                                                                  

The Company is also subject to inspection and regulation              
under other federal and state legislation relating to drugs,                    
narcotics and alcohol.  Many of its suppliers and customers, as                 
well as the drug industry in general, are subject to the same or                
similar governmental regulations.                                               

In recent years, the United States Congress has passed laws           
that increase the regulation of the drug industry beyond the                    
point of good manufacturing practices.  The new regulations                     
require manufacturers to present substantial evidence for the                   
efficacy, as well as safety, of their drug products.                            

It is impossible for the Company to predict the extent to             
which its operations will be affected under the regulations                     
discussed above or any new regulations which may be adopted                     
by regulatory agencies.                                                         

Employees                                                                       

The Company employs approximately 1240 persons,                       
approximately 535 of whom serve in clerical, sales and management               
capacities.  The remainder are engaged in production                            
and maintenance activities.                                                     

The production and maintenance employees at the Company's             
manufacturing facilities in Morgantown, West Virginia, are                      
represented by the Oil, Chemical and Atomic Workers                             
International Union (AFL-CIO) and its Local Union 8-957                         
(AFL-CIO).                                                                      

Backlog                                                                         

At March 31, 1994, the uncompleted portions of the Company's          
backlog of orders was approximately $12,543,000 as compared to                  
approximately $17,797,000 at March 31, 1993.  Because of the                    
relatively short lead time required in filling orders for its                   
products, the Company does not believe these interim backlog                    
amounts bear a significant relation to sales or income for any                  
full twelve-month period.                                                       

ITEM 2.  Properties                                                             

The Company operates from various facilities in the United            
States and Puerto Rico having an aggregate of approximately                     
830,000 square feet.                                                            

Mylan Pharmaceuticals owns production, warehouse, laboratory          
and office facilities in four buildings in Morgantown, West                     
Virginia containing approximately 500,000 square feet and a                     
distribution center in Greensboro, North Carolina containing                    
approximately 24,000 square feet with an additional 40,000 square               
feet under construction.  Mylan Pharmaceuticals also operates a                 
distribution center in Reno, Nevada containing approximately                    
25,000 square feet under a lease expiring in 1996.                              

Mylan Inc. owns a production and office facility in Caguas,           
Puerto Rico containing approximately 100,000 square feet and a                  
production facility in Cidra, Puerto Rico containing                            
approximately 32,000 square feet.                                               

Dow Hickam Pharmaceuticals, Inc. owns production, warehouse           
and office facilities in two buildings in Sugar Land, Texas                     
containing approximately 70,000 square feet.  Hickam also                       
operates a filling and packaging facility in Sugar Land, Texas                  
containing approximately 15,000 square feet under a lease                       
expiring in 1996.                                                               

Bertek owns production, warehouse, laboratory and office              
facilities in five buildings in Swanton and St. Albans, Vermont                 
containing approximately 159,000 square feet.  Bertek also                      
operates a coating and extrusion facility in St. Albans                         
containing approximately 71,000 square feet under a lease                       
expiring in 2015.                                                               

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The Company's production equipment includes that equipment            
necessary to produce and package tablet, capsule, aerosol,                      
transdermal and powder dosage forms.  The Company maintains five                
analytical testing laboratories for quality control.                            

The Company's facilities are operated primarily on a two              
shift basis.  Properties and equipment are well maintained and                  
adequate for present operations.                                                

The Company's corporate offices, containing approximately             
5,800 square feet, are located at 130 Seventh Street, 1030                      
Century Building, Pittsburgh, Pennsylvania, and are occupied                    
under a lease expiring in 1996.                                                 

ITEM 3.  Legal Proceedings                                                      

In June, 1989, the Company filed suit under the Federal               
Antitrust Laws and Racketeer Influenced and Corrupt Organization                
Act (RICO), against several pharmaceutical companies, certain                   
employees of those companies, and certain former employees of the               
FDA Generic Drug Division.  The suit asserts that the approval                  
process for generic drugs at the FDA was corrupted and that the                 
Company was damaged by the action of the defendants.  On December               
10, 1992 the Company's suit was dismissed by order of the Court.                
The Company appealed this dismissal and its suit was reinstated.                
During 1994 settlements were reached with several of the                        
defendants for approximately $3,375,000.    The Company continues               
to pursue other defendants in this suit.                                        

On November 20, 1990 the Company filed a complaint against            
American Cyanamid Company ("Cyanamid").  Cyanamid, through its                  
Lederle Laboratories Division is the exclusive distributor of the               
Mylan products Maxzide  and Maxzide -25MG pursuant to a March,                  
1984 agreement.  The complaint alleged that Cyanamid underpaid                  
Mylan based on the terms of the agreement and that Cyanamid had                 
not met certain obligations under the agreement with regards to                 
marketing of the products.  The Company was seeking general                     
relief in the form of compensatory and punitive damages and was                 
also seeking to be awarded certain trademark rights to Maxzide                  
and Maxzide -25MG currently owned by Cyanamid.                                  

On May 30, 1991 Cyanamid filed an Answer and Counterclaim to          
the complaint filed by the Company on November 20, 1990.  The                   
counterclaims included allegations of fraudulent inducement and                 
breach of contract regarding the March, 1984 Maxzide  contract                  
and allegations of defamation.  Cyanamid was seeking dismissal of               
the Company's complaint and compensatory and punitive damages.                  

During 1994 the jury in the Company's lawsuit against                 
Cyanamid ruled in favor of Cyanamid on the Company's complaint                  
and in favor of the Company on Cyanamid's counterclaims.  No                    
money damages were awarded to either party.  Each party has given               
notice of appeal.                                                               
On November 24, 1992, Marion Merrell Dow Inc. ("MMD") and             
Tanabe Seiyaku Co. LTD ("Tanabe") filed suit against the Company,               
its wholly-owned subsidiary Mylan Pharmaceuticals Inc., and                     
another company claiming infringement of Tanabe's patent for the                
manufacture of diltiazem.  MMD and Tanabe seek permanent                        
injunctive relief and treble damages to compensate for the                      
alleged infringement and costs of suits.  The Company believes                  
this suit is without merit and continues to vigorously defend                   
this lawsuit.                                                                   

ITEM 4.  Submission of Matters to a Vote of Security Holders                    

Not applicable.                                                       

EXECUTIVE OFFICERS OF THE REGISTRANT                                            

The names, ages and positions of the Company's executive officers               
are as follows:                                                                 

Milan Puskar          59  Chairman, Chief Executive Officer           
and President     
Dana G. Barnett       53  Executive Vice President                    
Louis J. DeBone       48  Vice President-Operations                   
Roderick P. Jackson   54  Senior Vice President                       
Joseph J. Krivulka    42  Vice President                              
Dr. John P. O'Donnell 48  Vice President-Research and                 
Quality Control   
Patricia Sunseri      54  Vice President-Investor and                 
Public Relations  
C.B. Todd             60  Senior Vice President                       
Robert W. Smiley      72  Secretary                                   

Mr. Puskar was employed by the manufacturing subsidiary of            
the Company from 1961 to 1972 and served in various positions                   
including:  Secretary-Treasurer, Executive Vice President and                   
member of the Board of Directors.  From 1972 to 1975, Mr. Puskar                
served as Vice President and General Manager of the Cincinnati                  
Division of ICN Pharmaceuticals Inc. In addition, he has served                 
as a partner in several pharmaceutical firms in foreign countries               
and is currently a director of Huntington National Bank West                    
Virginia.  Mr. Puskar has served as President of the Company                    
since 1976 and as Chairman and Chief Executive Officer since                    
November of 1993.                                                               

Mr. Barnett has been a Vice President of the Company since            
1974.  His principal occupation since 1966 has been in various                  
management positions with the manufacturing subsidiary of the                   
Company.  His responsibilities have covered production, quality                 
control and product development.  He became Senior Vice President               
in 1978 and Executive Vice President in 1987.  Since June of                    
1991, he also serves as President and Chief Executive Officer of                
Somerset Pharmaceuticals, Inc., a joint venture subsidiary of the               
Company.                                                                        

Mr. DeBone has been employed by the Company since September,          
1987.  Prior to assuming his present position in November, 1991                 
as Vice President-Operations he served as Vice President-Quality                
Control.  He was previously employed with the Company from                      
March, 1976 until June, 1986 and served as Director of                          
Manufacturing.                                                                  

Mr. Jackson has been employed by the Company since April,             
1986.  Prior to assuming his present position in October, 1992 as               
Senior Vice President he served as Vice President-Marketing and                 
Sales.  He was previously employed for four years at Lederle                    
Laboratories as Director of Standard Products.                                  

Mr. Krivulka has been employed by the Company since March,            
1990.  Prior to assuming his present position in April, 1992 as                 
Vice President he served as Assistant to the President.  Since                  
April of 1993, he also serves as President of Bertek, Inc., a                   
subsidiary of the Company.  From 1989 to 1990 he was employed by                
Janssen Pharmaceutica, a division of Johnson & Johnson, as                      
Executive Director of Business Unit Management and from 1987 to                 
1989 was employed by Sandoz Pharmaceuticals as Group Business                   
Director.                                                                       

Dr. John O'Donnell has been employed by the Company since             
1983.  Prior to assuming his present position in November, 1991                 
as Vice President-Research and Quality Control, he served as Vice               
President-Research and Product Development and as Director of                   
Chemistry and Product Development.                                              

Mrs. Sunseri has been employed by the Company since 1984.             
Prior to assuming her present position in October, 1989 as Vice                 
President-Investor & Public Relations, she served as Director of                
Investor Relations.                                                             

Mr. Todd has been employed by the Company since 1970.  Prior          
to assuming his present position in October, 1987 as Senior Vice                
President, Mr. Todd served as Vice President-Quality Control.  He               
also serves as President of Mylan Pharmaceuticals Inc., a                       
subsidiary of the Company.                                                      

Mr. Smiley has been Secretary of the Company for                      
approximately nineteen years and on December 12, 1975, he was                   
elected to the Board of Directors.  His principal occupation                    
is and for approximately 40 years has been an attorney-at-law in                
Pittsburgh, Pennsylvania. He was a partner in the law firm of                   
Smiley, McGinty and Steger, general counsel to the Company.  On                 
October 1, 1992 Mr. Smiley joined the law firm of Doepken                       
Keevican Weiss & Medved Professional Corporation.                               

There is no family relationship between any of the above              
executive officers.  Officers of the Company serve at the                       
pleasure of the Board of Directors.                                             

Messrs. Puskar, Barnett, Todd and Smiley serve as members of          
the Executive Committee of the Board.                                           

PART II     

ITEM 5.   Market for Registrant's Common Equity and                             
Related Stockholder Matters                                 

The information required by item 5 is hereby incorporated by          
reference to pp. 24 and 40 of the accompanying Annual Report to                 
Shareholders for the year ended March 31, 1994.                                 

ITEM 6.   Selected Financial Data                                               

The information required by item 6 is hereby incorporated by          
reference to p. 24 of the accompanying Annual Report to                         
Shareholders for the year ended March 31, 1994.                                 

ITEM 7.   Management's Discussion and Analysis                                  
of Financial Condition and Results of Operations            

The information required by item 7 is hereby incorporated by          
reference to pp. 25-27 of the accompanying Annual Report to                     
Shareholders for the year ended March 31, 1994.                                 

ITEM 8.   Financial Statements and Supplementary Data                           

The information required by item 8 is hereby incorporated by          
reference to pp. 28-40 of the accompanying Annual Report to                     
Shareholders for the year ended March 31, 1994.                                 

ITEM 9.   Changes in and Disagreements with Accountants on                      
Accounting and Financial Disclosure                         

Not applicable.                                                       

PART III      

ITEM 10.  Directors and Executive Officers of the Registrant                    

The information as to directors required by item 10 is                
hereby incorporated by reference to pp. 1-3 of the Company's 1994               
Proxy Statement.  Information concerning executive officers is                  
provided in Part I of this report under the caption "Executive                  
Officers of the Registrant".                                                    

ITEM 11.  Executive Compensation                                                

The information required by item 11 is hereby incorporated            
by reference to pp. 3-8 of the Company's 1994 Proxy Statement.                  

ITEM 12.  Security Ownership of Certain                                         
Beneficial Owners and Management                            

The information required by item 12 is hereby incorporated            
by reference to p. 8 of the Company's 1994 Proxy Statement.                     

ITEM 13.  Certain Relationships and Related Transactions                        

The information required by item 13 is hereby incorporated            
by reference to p. 3 of the Company's 1994 Proxy Statement.                     

PART IV     

ITEM 14.  Exhibits, Financial Statement Schedules,                              
and Reports on Form 8-K                                     

A. List of Financial Statements and Schedules                         
                                  Page
                                  Number

INCLUDED IN ANNUAL REPORT TO                                                    
SHAREHOLDERS:                                                                   
Consolidated Balance Sheets . . . . . . . . .      28-29              
Consolidated Statements of Earnings . . . . .      30                 
Consolidated Statements of Shareholders' Equity .  31                 
Consolidated Statements of Cash Flows . . . .      32-33              
Notes to Consolidated Financial Statements. .      34-39              
Independent Auditors' Report. . . . . . . . .      40                 

INCLUDED IN 1994 FORM 10-K REPORT                                               
Independent Auditors' Report on Schedules . .      S-1                
Schedules Furnished Pursuant to the Requirements                      
of Form 10-K:                                                   
I-Marketable Securities-Other Investments . .  S-2            
II-Amounts Receivable-Related Parties. . .      S-3             
X-Supplementary Income Statement Information.  S-4            

Schedules other than those referred to above are omitted              
because they are not required or the information is included in                 
Notes to Consolidated Financial Statements.                                     

B. Reports on Form 8-K                                                

The Company was not required to file a report on Form       
8-K during the quarter ended March 31, 1994.                                    

C. Exhibits filed as part of this Report                              

(3)(a) Amended and Restated Articles of Incorporation of the              
registrant, filed as Exhibit (3)(a) to Form 10-Q for quarter                    
ended June 30, 1992 and incorporated herein by reference.                       

(b) By-laws of the registrant, as amended to date, filed as         
Exhibit 3(b) to Form 10-Q for the quarter ended June 30, 1992 and               
incorporated herein by reference.                                               
(10)(a) Employment contract with Roy McKnight dated July 31,                
1981, filed as an Exhibit to Form 10-K for fiscal year ended                    
March 31, 1982 and incorporated herein by reference.                            

(b) 1986 Incentive Stock Option Plan, as amended to date,           
filed as Exhibit 10(b) to Form 10-K for fiscal year ended March                 
31, 1993 and incorporated herein by reference.                                  

(c) "Salary Continuation Plan" with Roy McKnight, Milan             
Puskar, Dana G. Barnett and C.B. Todd each dated as of April 1,                 
1989, filed as Exhibit (10)(c) to Form 10-K for fiscal year ended               
March 31, 1990 and incorporated herein by reference.                            

(d) "Salary Continuation Plan" with Roderick P. Jackson             
dated April 1, 1989, filed as Exhibit 10(d) to Form 10-K for the                
fiscal year ended March 31, 1993 and incorporated herein by                     
reference.                                                                      

(e) "Salary Continuation Plan" with Louis J. DeBone dated           
April 1, 1989 filed herewith.                                                   

SALARY CONTINUATION AGREEMENT                   

THIS AGREEMENT is made and entered into effective April 1, 1989,                
between MYLAN LABORATORIES INC. (hereinafter referred to as the                 
Company) a corporation organized and existing under the laws of the             
Commonwealth of Pennsylvania, with its principal office at 1030                 
Century Building, 130 Seventh Street, Pittsburgh, Pennsylvania                  
15222, and Louis J. DeBone (hereinafter referred to as the                      
Employee).                                                                      

WHEREAS, the Employee is and has been an employee of MYLAN                      
LABORATORIES INC. and/or its subsidiary, MYLAN PHARMACEUTICALS,                 
INC. for approximately 2 years.                                                 

WHEREAS, the Employee does now and has rendered valuable services               
to the Company and as a result is now making a substantial                      
contribution to the success and growth of the Company; and                      

WHEREAS, the Company feels that the Employee's services are                     
invaluable to the continued pattern of growth and success of the                
Company; and                                                                    

WHEREAS, the Company wishes to reward and retain the future                     
services of the Employee and to assist him in providing for the                 
contingencies of disability, death and retirement.                              

IT IS THEREFORE AGREED:                                                         

(1) RETIREMENT BENEFIT                                                          
a.   That in exchange for continued and loyal service by the          
Employee the Company shall pay to the Employee from the     
general assets of the Company, an annual amount payable     
for ten years in the amount of $60,000.                     
This benefit shall be payable on the first day of the       
month on the later of the employee's sixtieth birthday or   
April 1, 1999. If the employee's sixty-fifth birthday       
occurs prior to April 1, 1999 the benefit will be payable   
the first of the month following the sixty-fifth birthday   
or on such later date as the parties may mutually agree.    
b.   If the Executive Committee of the Company gives written          
consent, the Employee may retire prior to his retirement    
date as defined in (1)(a).  above and receive reduced       
benefits as determined by the Executive Committee.          
Benefit payment shall be paid in 120 consecutive monthly    
installments commencing on the first day of the month       
immediately following the Employee's Early Retirement.      
(2)  DISABILITY BENEFITS                                                        
If the Employee shall become totally and permanently        
disabled as hereinafter defined in Section 14, and on       
account thereof, his employment with the Company shall be   
terminated, the Employee shall be entitled to benefits      
payable as stated in (1)(a) above.                          
a.   Notwithstanding the foregoing provision, the Company may         
in its sole discretion commence disability payments at      
anytime prior to the Employee's retirement age.             

b.   In determining total and permanent disability, the               
Company may from time to time require certification by a    
licensed physician of its choice, that the Employee         
remains disabled.                                           
c.   In the event the Company elects to commence payments             
pursuant to this Section, these payments shall cease        
under the following circumstances.                          
1.   Employee resumes his position with the Company;        
2.   Employees fails to accept his former position after    
being declare no longer disabled by a licensed    
physician selected by the Company;                
3.   Employee accepts employment from any other company,    
person or entity which is in any way similar in   
income or status to his former position with the  
company.                                          
4.   Employee refuses to submit to an examination by a      
licensed physician selected by the company;       
d.   Payments made pursuant to this Section, in no event,             
shall exceed the total payments to which the Employee       
would have been entitled under Section 1. If payments do    
commence pursuant to this Section and later cease           
pursuant to Section 2(d), payments may commence again       
upon attainment of retirement age; however, the total       
number of payments made to the Employee pursuant to this    
Section shall reduce the aggregate total of payments due    
under Section 1.                                            

(3)  DEATH BENEFIT AFTER RETIREMENT OR DISABILITY                               
If the Employee dies after retirement or disability but prior         
to receiving 120 monthly installments of benefits as herein           
provided, the balance of the monthly installments shall be            
paid to the named beneficiary designated by the Employee. Said        
beneficiary designation shall be in writing and filed with the        
Company. If no beneficiary has been designated by the                 
Employee, the Company may elect to pay the total of such              
monthly installments to his estate in one lump-sum, discounted        
to present value at date of death applying Pittsburgh National        
Bank's prime rate plus one percent (1%).                              
(4)  DEATH PRIOR TO RETIREMENT                                                  
a.   If the Employee dies prior to retirement as provided in          
Section 1 hereof, while in the employ of the Company, the   
Company shall pay 100% of the Average Total Compensation    
(Average Total Compensation being based on the last 3       
year's total compensation) in 120 consecutive monthly       
installments in lieu of the benefit payments above          
provided by Section 1, to the beneficiary designated by     
the Employee in writing and filed with the Company.         
Payments shall commence on the first day of the month       
following the Employee's death.                             
If no beneficiary has been so designated by the Employee,   
the Company may elect to pay the total of such monthly      
installments to the estate of the Employee in one lump      
sum discounted to present value at date of death applying   
Pittsburgh National Bank's prime rate plus one percent      
(1%).                                                       

b.   Suicide                                                          
If the Employee commits suicide, while sane or insane,      
within two years after the effective date of this           
agreement, no benefits shall be payable under this or any   
other section of this agreement.                            
(5)  TERMINATION OF EMPLOYMENT                                                  
If the Employee's employment with the Company terminates (for         
any reason whatsoever other than death or disability) before          
retirement as provided in Section 1, or prior to becoming             
entitled to benefits under the provisions of Section 2,               
whether said termination of employment is by the act of the           
Employee or the Company, the Executive Committee of the               
Company shall have the absolute, sole and exclusive authority         
to determine and to grant benefits payable under this                 
agreement, if any, or to terminate this agreement as of the           
date of termination of employment with no benefits payable            
hereunder.                                                            

(6)  INDEPENDENT AGREEMENT                                                      
Under no circumstances shall this agreement be construed as an        
employment contract. Neither shall this agreement, or any part        
thereof, be construed in such a manner so as to restrict the          
Employee's right to terminate his employment.                         
Any benefit payable pursuant to this agreement shall not be           
deemed salary or other compensation to the Employee for the           
purpose of computing benefits to which he may be entitled             
under any pension or profit sharing plan or other arrangement         
of the Company for the benefit of its Employees.                      
(7)  BENEFITS AND BURDENS                                                       
This agreement shall, to the extent herein provided, be               
binding upon the heirs, executors, administrators, successors         
and assignments of any and all parties hereto, present and            
future. Transfers of the Employee within the Company or its           
subsidiaries and successor organization shall not terminate           
this agreement.                                                       
(8)  FORFEITURES AND CONDITION                                                  
During the two year period following retirement from active           
service, the Employee shall not engage, directly or                   
indirectly, in any business which is substantially similar to         
the business of the Company at such time within the                   
continental limits of the United States either as proprietor,         
partner, officer, board member, employee, consultant or               
otherwise, unless the Company shall first consent thereto in          
writing.                                                              

a.   Forfeiture                                             
The payments provided under Section 1 are         
conditioned upon the employee fulfilling the      
foregoing requirements and, in the event the      
employee at anytime materially breaches the       
foregoing requirements, the Executive Committee of
the Company may suspend or eliminate payments     
 during the period of such breach. The definition of
 material breach shall be within the sole discretion
of the Executive Committee of the Company.        
b.   Consulting Services                                    
It is mutually agreed that during the ten year    
period beginning on the first day following       
 retirement from active service, the Employee shall,
at the request of the Company act in the capacity 
of a Consultant for the Company, performing such  
services consistent with those during the         
Employee's employment as may be designed by the   
President of the Company, or his authorized       
representative, without being restricted to       
 devoting any minimum hours or days in such services
as Consultant.                                    
The Company shall pay the Employee for such       
services as Consultant an hourly rate to be       
determined by the parties at such time, but not   
less than $50 per hour, payable monthly. In       
addition to the foregoing, the Company shall      
 reimburse the Employee monthly for any and all out-
of-pocket expenses incurred by the Employee       
directly for the benefit of the business of the   
Company.                                          

(9)  COMMUNICATION                                                              
All communications regarding this plan by and between the             
Company and the Employee shall be in writing and shall be             
deemed duly given, made, delivered or transmitted when mailed         
first class with postage prepaid and addressed to the                 
appropriate party at the address last appearing on the books          
of the Company. The Employee may change his address from time         
to time by giving written notice to the Company.                      
The Company may rely upon all such information so furnished           
including the Employee's current mailing address.                     

(10) RESTRICTION OF ALIENABILITY                                                
Benefits payable to the Employee or beneficiary of the                
Employee shall not be subject to assignment, transfer,                
attachment, execution, garnishment, sequestration, or any             
other seizure under any legal or equitable process, whether on        
account of the Employee's act or by operation of the law.             
(11) RIGHT OF THE COMPANY TO REDUCE BENEFITS                                    
The Company shall have the right to reduce any amount payable         
to the Employee by the amount of any indebtedness of, or other        
charges arising against the Employee pursuant to this                 
agreement during the payout period and subtracting therefrom          
the amount of indebtedness or other charges. That result,             
divided by the total number of payments due will be the               
monthly benefit payment.                                              

(12) ACCELERATION OF  BENEFIT PAYMENTS                                          
The Company hereby reserves the rights to accelerate the              
payment of any sums specified in paragraph 1, 2, or 3 above           
without the consent of the Employee, his estate,                      
beneficiaries, or any other person claiming through or under          
him.                                                                  
(13) CLAIMS PROCEDURE                                                           
Benefits are due under the plan as set forth in the specific          
section dealing with benefit payments. If a claim is wholly or        
partially denied, the plan administrator shall provide a              
written notice to the claimant setting forth:                         
a.   The specific reason or reasons for the denial;                   
b.   Specific reference to the pertinent plan provision upon          
which denial is based;                                      
c.   A description of any additional material or information          
necessary for the claimant to perfect the claim and an      
explanation of why such material or information is          
necessary; and                                              
d.   Appropriate information as to the steps to be taken if           
the claimant wishes to submit the claim for review.         
This notification shall take place within 90 days of the              
denial of the claim. If the claimant has received no                  
notification that the claim has been accepted within the 90           
day limitation, the claimant can assume that the claim is             
denied and proceed to the review state.                               

A claimant  or his duly authorized representative shall               
request in writing, within 60 days following denial of the            
claim or expiration of the 90 day period outlined above, his          
intent to review pertinent documents and/or submit issues or          
comments in writing.                                                  
The decision on review shall be made within 60 days following         
the Employee's request for review and communicated to the             
Employee in writing setting forth the reasons for the                 
decision. If no written notice is received within 60 days, the        
claim shall be deemed denied on review.                               
(14) ACCEPTANCE BY COMPANY OF PHYSICIAN'S CERTIFICATION AND                     
COMPANY'S DETERMINATION OF TERMINATION FOR CAUSE.                     
The Employee stipulates and agrees that the certification of          
a licensed physician as to the Employee's total and permanent         
disability, as provided in Section 2 hereof and the Company's         
determination of Employee's termination for cause as provided         
in Section 5 hereof are unequivocally binding upon the                
Employee and the Employee dies and shall accept such                  
certification of physician and determination of the Company as        
binding upon the Employee with no right of the employee of any        
redetermination thereof or right of appeal to any court having        
jurisdiction thereof.                                                 
(15) PLAN ADMINISTRATOR                                                         
The Vice President of Finance of the Company, or other officer        
of the Company designated by the Executive Committee of the           
Company is hereby named the Plan Administrator for purposes of        
submitting claims for initial processing or for denial review.        

(16) SUPERSEDING AGREEMENT                                                      
This agreement supersedes and makes null and void all prior           
agreements, oral or written, relative to any subject matter           
contained herein.                                                     
(17) AMENDMENT                                                                  
This agreement may be amended or revoked at any time, in whole        
or in part, by the mutual agreement of all parties.                   
(18) LAWS GOVERNING                                                             
This agreement shall be governed by the laws of the                   
Commonwealth of Pennsylvania.                                         

In witness whereof the parties have executed this agreement.          

Attest:                            Mylan Laboratories Inc.                      

           By:  /s/ Roy McKnight

/s/ Robert Smiley                                                               
(Secretary)                                                           

         /s/ Louis J. DeBone
        (Name of Employee)

(f) Employment contract with Milan Puskar dated April 28,           
1983, as amended to date, filed as Exhibit 10(e) for fiscal year                
ended March 31, 1993 and incorporated herein by reference.                      

(g) Split Dollar Life Insurance Arrangement with McKnight           
Irrevocable Trust filed herewith.                                               

SPLIT DOLLAR      
LIFE INSURANCE AGREEMENT      

This Agreement made as of the 24th day of June, 1993 by     
and between STEPHEN H. McKNIGHT and ROBERT G. McKNIGHT, Trustees                
under Irrevocable Life Insurance Trust Agreement, dated April 1,                
1992 ("Trust"), between them as Trustees ("Owners") and ROY                     
McKNIGHT and BEATRICE B. McKNIGHT, his wife, ("Donors"),                        

A                   
N               
D           

MYLAN LABORATORIES INC., a Pennsylvania Corporation         
("Company").                                                                    
Whereas, in recognition of the unique and essential         
services of ROY McKNIGHT ("Employee") to the Company, his                       
contributions to the Company and as an inducement to the                        
continued employment of the Employee, the Company has determined that its       
best interest would be served by entering into a split-dollar                   
life insurance arrangement with the Owners, whereby the Company will            
assist the Owners in maintaining certain life insurance for the                 
benefit of the beneficiaries under the Trust by contributing from               
time to time the payment of premiums due on survivorship whole                  
life policies of the Owners on the life of the Employee and Beatrice            
B. McKnight his wife ("Insureds"), subject to the condition that                
such policies be assigned to the Company as security only for                   
repayment of amounts to which the Company may become entitled pursuant to       
the terms of this Split Dollar Life Insurance Agreement                         
("Agreement").                                                                  
NOW, THEREFORE, in consideration of the foregoing and       
the covenants and agreements hereinafter set forth, the parties                 
intending to be legally bound hereby, agree as follows:                         

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ARTICLE I     
APPLICATION FOR INSURANCE     

1.1  Owners have applied to various life insurance          
companies for survivorship whole life insurance policies                        
(collectively "Policies" and individually "Policy") on the lives                
of ROY McKNIGHT and BEATRICE B. McKNIGHT, his wife.  These life                 
insurance companies, policy numbers, face amounts and other                     
information with respect to the Policies is designated on                       
Schedule "A" attached hereto, as such Schedule may exist from time to           
time.                                                                           

ARTICLE II      
OWNERSHIP OF INSURANCE      

2.1  The Owners shall retain possession of the Policies     
and shall have the sole and all exclusive rights of ownership                   
with respect to the Policies, which rights shall at all times be                
exercisable only by the Owners and without the consent of any                   
other person or party.                                                          
2.2  The Company shall have no rights of ownership with     
respect to the Policies, but the Policies are subject to the                    
terms of this Agreement and the provisions of collateral assignment             
agreements by the Owners securing Owners' obligation to the                     
Company under this Agreement, the form of which is attached hereto as           
Schedule "B" ("Collateral Assignments").                                        
ARTICLE III     
PAYMENT OF PREMIUMS ON POLICY     

3.1  On or before the due date of each annual premium       
on the Policies, the Company will advance to the Owners an amount               
equal to the annual premiums.                                                   
3.2  Upon receipt of the amount which the Company shall     
contribute under paragraph 3.1 of this ARTICLE III, the Owners                  
will pay the full amount of the premiums due, or with the consent of            
the Owners, the net premiums due on the Policies to the respective              
life insurance companies.  The payment of the premiums shall be made            
by the Owners on or before the date the premium is due and within               
the grace period allowed by the Policies for the payment of the                 
premium.  Notwithstanding the preceding sentence of this                        
paragraph 3.2 of this ARTICLE III, the Company may make the premium             
payments directly to the life insurance companies; provided, however, that      
it promptly notifies the Owners of such payments.                               

ARTICLE IV      
OWNERS' OBLIGATION TO COMPANY     

4.1  Unless paid pursuant to a Collateral Assignment,       
the Owners shall be obligated and hereby agree to pay or repay to the           
Company the aggregate amount which become due to the Company as                 
provided in ARTICLE VI, ARTICLE VII and ARTICLE VIII of this                    
Agreement, as the case may be.                                                  

ARTICLE V     
ASSIGNMENT      

5.1  The Owners will enter Collateral Assignments           
assigning the Policies to the Company as security of the                        
repayment of the amounts which become due to the Company as provided in         
ARTICLE VI, ARTICLE VII, and ARTICLE VIII of this Agreement, as                 
the case may be.                                                                

ARTICLE VI      
RETIREMENT, DISABILITY, DEATH OF EMPLOYEE; DEATH OF THE SURVIVOR      

6.1  Unless the Policy or Policies have otherwise been      
surrendered under paragraph 7.1 of ARTICLE VII, the Company shall               
continue to advance all premium payments pursuant to ARTICLE III                
notwithstanding the retirement, disability or death of the                      
Employee; provided further, however, that the Company shall not                 
be required to continue such advances beyond the death of the                   
survivor of the Insureds.                                                       
6.2  Upon the death of the survivor of the Insureds,        
the Company shall be entitled to receive a portion of the death                 
benefits payable under the Policies.  The amount which the                      
Company will be entitled to receive shall be the aggregate amount of            
advances made by it pursuant to paragraph 3.1 of ARTICLE III of                 
this Agreement for the repayment of premiums due on the Policies.               
The receipt of this amount by the Company shall constitute full                 
accord and satisfaction of the Owners' obligation under ARTICLE                 
IV of this Agreement, whereupon the Company shall release and                   
deliver to the Owners the Collateral Assignment and this Agreement shall        
terminate.                                                                      
6.3  When the survivor of the Insureds dies, the            
beneficiaries named by the Owners and recognized as such by the                 
life insurance companies shall be entitled to receive the amount                
of the death benefits provided under the Policy in excess of the                
amount payable to the Company under paragraph 6.2 of this ARTICLE               
VI.                                                                             

ARTICLE VII     
SURRENDER OR CANCELLATION OF THE POLICIES     

7.1  In the event the Owners exercise their sole and        
exclusive right to surrender or cancel a Policy or the Policies,                
then the Company shall be entitled to receive the greater of (i)                
the net cash surrender value of the Policy at such time of                      
surrender or (ii) the aggregate amount of advances made by it                   
pursuant to paragraph 3.1 of ARTICLE III of the Agreement with                  
respect to such Policy or Policies surrendered, whereupon receipt               
thereof shall be full accord and satisfaction of the obligation                 
of the Company to the Owners as set forth in ARTICLE IV hereof with             
respect to such Policy or Policies surrendered, and the Company                 
shall release and deliver to the Owners the Collateral Assignment               
with respect to such Policy or Policies surrendered.                            
7.2  In the event the net cash surrender value of a         
Policy or Policies surrendered or cancelled pursuant to paragraph               
7.1 of this ARTICLE VII at such time is less than the aggregate                 
amount of advances made by the Company pursuant to paragraph 3.1                
of ARTICLE III hereof with respect to such Policy or Policies                   
surrendered, then the Company shall be entitled to receive an                   
amount equal to the said net cash surrender value of the Policy                 
or Policies and the Owners shall, from the assets of the Irrevocable            
Life Insurance Trust, pay the Company the difference between the                
net cash surrender value and aggregate amount of advances made by               
the Company pursuant to paragraph 3.1 of ARTICLE III.  At the                   
Owners' election, such amount may be paid in five (5) equal                     
annual installments bearing interest at the prime rate as established           
from time to time by PNC Bank.  The first installment shall be due on           
the first anniversary of the payment to the Company of the net                  
cash surrender value.  The obligations of the Owners set forth in the           
previous sentences of this paragraph 7.2 may be secured by a                    
surety bond from a recognized surety licensed to do business in the             
Commonwealth of Pennsylvania or by the several guarantees of the                
beneficiaries of the Irrevocable Life Insurance Trust.                          
7.3  Notwithstanding the provisions of paragraph 7.2 of     
this ARTICLE VII, the Company and the Owners (for themselves on                 
behalf of the Irrevocable Life Insurance Trust and for any surety               
or guarantor of the obligations hereunder) agree that should the                
amount received or receivable due upon the surrender of any or                  
all of the Policies be less than the amount otherwise due the Company           
pursuant to paragraph 3.1 of ARTICLE III and such reduced amount                
is due, in whole or in part, to the bankruptcy, insolvency,                     
receivership, reorganization, conservatorship or similar                        
impairment of a life insurance company, then the obligation of the Owners to    
make payment to the Company with respect to such Policy or                      
Policies shall, at the Owners' election, be limited to the net cash             
surrender value or net amount otherwise payable with respect to                 
such Policy or Policies, and the Owners, sureties and guarantors                
shall be released from any further obligation to pay the Company                
with respect to such Policy or Policies.                                        
ARTICLE VIII      
RELEASE     

8.1  The Owners, at their election, may from time to        
time be released from their obligations to repay the Company such               
amounts that are owed to the Company upon the death of the                      
survivor of the insured (pursuant to the provisions of paragraph 4.1 of         
ARTICLE IV) or upon the surrender of a Policy or the Policies                   
(pursuant to the terms of ARTICLE VII) upon tendering to the                    
Company with respect to a Policy or Policies the aggregate amount               
of advances made by the Company with respect to such Policy or                  
Policies.  Upon tendering the payment computed in accordance with               
the preceding sentence, the Policy or Policies to which such                    
payment relates shall be released from the Collateral Assignment.               

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ARTICLE IX      
INSURANCE COMPANY NOT A PARTY     

9.1  The life insurance companies (a) shall not be          
deemed to be parties to this Agreement for any purpose nor in any way           
responsible for its validity; (b) shall not be obligated to                     
inquire as to the distribution of any monies payable or paid by it under        
the Policy on the Insureds' lives acquired pursuant to the terms                
of the Agreement; and (c) shall be fully discharged from any and all            
liability under the terms of the Policy upon payment or other                   
performance of their respective obligations in accordance with                  
the terms of the Policy issued by such life insurance company.                  

ARTICLE X     
AMENDMENT OF AGREEMENT      

10.1 This Agreement shall not be modified or amended        
except by a writing signed by the Company and the Owners.  This                 
Agreement shall inure to the benefit of and shall be binding upon               
the successors and assignees of each party to this Agreement.                   

ARTICLE XI      
APPLICABLE LAW      

11.1 This Agreement shall be subject to and shall be        
construed under the laws of the Commonwealth of Pennsylvania.                   

IN WITNESS WHEREOF, the Company, pursuant to the proper             
corporate authority, has caused this Agreement to be signed on                  
its behalf and its seal to be affixed and attested by its proper                
officers and the Owners, Trustees, have hereunto subscribed their               
names, all as of the day and year first above written.                          

/s/James E. Abraham                          /s/Stephen H.McKnight              
Witness                             Stephen H. McKnight, Trustee        

/s/James E. Abraham                          /s/Robert G. McKnight              
Witness                            Robert G. McKnight, Trustee      

(SEAL)                                                                          
ATTEST:                            MYLAN LABORATORIES INC.                      

By:/s/Robert W. Smiley                       By:/s/Milan Puskar                 
Robert W. Smiley                              Milan Puskar            
Secretary                                     President               

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SCHEDULE "A"      

INSURER           POLICY NUMBER       TYPE OF POLICY      FACE AMOUNT           

Connecticut       4985869            Survivorship        $9,500,000             
Mutual Life                          Whole Life                                 
Insurance                                                                       
Company                                                                         

Manulife          5175537-9          Survivorship        $7,500,000             
    Whole Life

Prudential        79-801-108         Survivorship        $5,000,000             
    Whole Life

Manulife          5184046-0          Survivorship        $3,000,000             
(added effective                       Whole Life                               
7/1/93)                                                                         

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MCGRADY                                                                         
JEM/3753_1.WP                                                                   

06/06/93 / 4:15p.m. / drd / JEA / sp                                            
06/07/93 / 12:20 p.m. / bal / JEA / nsp                                         
12/10/93 / 9:25 a.m. / ewd / JEA / sp                                           

SPLIT DOLLAR LIFE INSURANCE AGREEMENT     
MYLALA/MCK      

(h) 1992 Nonemployee Director Stock Option Plan filed as            
Exhibit 10(g) to Form 10-K for fiscal year ended March 31, 1993                 
and incorporated herein by reference.                                           

(13) Fiscal 1994 Annual Report to the Shareholders (only              
those portions which are incorporated in this Report by reference               
are being filed herewith).                                                      

Mylan Laboratories Inc.                 
1994 Annual Report                  

Description of Business.                                                        
Mylan Laboratories Inc. and its subsidiaries are engaged                        
primarily in manufacturing a variety of pharmaceutical products                 
in finished tablet, capsule and powder dosage forms.                            

TABLE OF CONTENTS                                                               
Product Collection                                1                             
Divisional Product Listing                        2                             
Letter to Shareholders                            4                             
Tribute to Roy McKnight                           6                             
Company History                                   10                            
The Year in Review                                12                            
The Mylan Directory                               20                            
Financial Highlights                              22                            
Selected Financial Data                           24                            
Management's Discussion                           25                            
Consolidated Balance Sheets                       28                            
Consolidated Statements of Earnings               30                            
Consolidated Statements of Shareholders' Equity   31                            
Consolidated Statements of Cash Flows             32                            
Notes to Consolidated Financial Statements        34                            
Independent Auditors' Report                      40                            
Market Prices                                     40                            
Quarterly Financial Data                          40                            
Mylan Product Guide                               41                            
Shareholder Information                      Inside Back Cover                  
Directors and Officers                       Inside Back Cover                  

Dow Hickam Pharmaceuticals                                                      
Granulex-TM                                                                     
Granulex-TM is an aerosol topical vasculatory stimulant used as                 
an aid in the management of pressure ulcers. Topical application                
stimulates the capillary beds of chronic wounds and helps prevent               
the deterioration of Stage I ulcers to deeper stages. Granulex-TM               
contains trypsin, a mild debriding agent, which helps keep the                  
wound site free of necrotic tissue once debrided.                               

Proderm-TM                                                                      
Proderm-TM is a non-prescription topical wound spray which                      
stimulates the capillary beds of chronic wounds to help prevent                 
the deterioration of Stage I ulcers to deeper stages. Proderm-TM                
also helps promote tissue granulation in deeper chronic ulcers.                 

Unifiber-TM                                                                     
A tasteless, non-gelling cellulose powder which offers a                        
concentrated source of fiber to patients whose diets are                        
unavoidably low in fiber-rich foods. Unifiber-TM can be mixed in                
liquids or soft foods, and contains no sodium, potassium or                     
phosphorus.                                                                     

Quick!-TM                                                                       
A safe, non-irritating, cost effective cleanser for use on                      
patients who are urine or fecal incontinent. Quick!-TM emulsifies               
fecal matter on contact and instantly eliminates unpleasant fecal               
or urine odors.                                                                 

Sorbsan-TM                                                                      
Sorbsan-TM is a unique calcium alginate dressing which transforms               
into a highly absorbent, readily conformable, easy-to-use                       
hydrophilic sodium alginate gel. This is accomplished through a                 
sodium ion exchange, which occurs when the dressing is in contact               
with sodium-rich wound exudate. Indicated for use on all wet                    
wounds, Sorbsan-TM is virtually painless upon application and                   
removal, and is easily changed by medical professionals and                     
patients alike.                                                                 

Flexzan-TM                                                                      
Flexzan-TM is a sterile, ultra-thin, highly conformable,                        
semi-occlusive polyurethane foam adhesive dressing which protects               
wounds from exogenous contamination and trauma while maintaining                
a moist environment for rapid wound healing.                                    

Sulfamylon-R Cream                                                              
Sulfamylon-R Cream is a soft, white, non-staining, water miscible               
broad spectrum topical antimicrobial cream containing the                       
antibacterial agent, mafenide, as an acetate. Sulfamylon-R is                   
indicated for use as adjunctive antimicrobial burn therapy of                   
patients with partial or full-thickness burns.                                  

Biobrane-R II                                                                   
Biobrane-R II is an adherent, flexible, virtually painless                      
temporary wound dressing intended for one-time application to                   
donor sites, and clean, debrided or excised superficial and                     
medium depth partial-thickness wounds. Biobrane-R II is also used               
as a protective covering for meshed autografts and full-thickness               
wounds.                                                                         

Bertek, Inc.                                                                    
Transdermal Drug Delivery Systems                                               
Bertek's Medical Products Division, a leader in Transdermal Drug                
Delivery Systems, represents a unique integration of R & D and                  
the manufacturing know-how and full integration of production                   
facilities to make raw materials and finished patches.                          

Wound Care Products                                                             
Bertek now stands as an established leader in the design,                       
development and manufacture of both critical component materials                
and custom-designed products for use in wound management.                       

The MEDIFILM-R SERIES of extruded, controlled high moisture vapor               
permeable films offers a complete range of design flexibility for               
use in wound and I.V. site dressings, ulcer dressings, burn                     
dressings, surgical drape and ostomy barrier applications.                      

Health Care Products and Materials                                              
Surgical Incise Drape                                                           
Prolonged surgical procedures require the use of securely adhered               
incise drape films with a high degree of breathability to                       
eliminate the possibility of perspiration-induced channeling and                
contamination of the wound site.                                                

Films & Laminates for Ostomy Care & Skin Barriers                               
Bertek has developed a family of soft, conformable urethane and                 
copolyester skin barrier films specifically for ostomy care.                    

GMP Converting and Labeling                                                     
As a printer of pharmaceutical labels, Bertek has established                   
full capabilities for designing labels from typesetting to                      
finished artwork by our in-house design team.                                   

Somerset Joint-Venture                                                          
Antiparkinson's                                                                 
Eldepryl-R                                                                      

Mylan Pharmaceuticals Inc. Generic Products                                     

Generic Name                  Trade Name                              
Analgesics                                                                      
Indomethacin                  Indocin-R                               
Propoxyphene HCL &                                                    
Acetaminophen                 Wygesic-R                               
Propoxyphene                                                          
Napsylate &                   Darvocet-                               
Acetaminophen                 N-100-R                                 

Antiangina                                                                      
Atenolol                      Tenormin-R                              
*Nadolol                      Corgard-R                               
Nitroglycerin Transdermal                                             
System (Patch)                Nitro Bid-R                             
Verapamil HCL                 Isoptin-R                               

Antianxiety                                                                     
*Alprazolam                   Xanax-R                                 
Diazepam                      Valium-R                                
Lorazepam                     Ativan-R                                
Perphenazine &                                                        
Amitriptyline HCL             Triavil-R                               

Antibiotics                                                                     
Amoxicillin                   Amoxil-R                                
Ampicillin                    Polycillin-R                            
Doxycycline Hyclate           Vibramycin-R                            
Erythromycin Ethylsuccinate   E.E.S.-R                                
Erythromycin                  Erythrocin                              
Stearate                      Stearate-R                              
Penicillin V Potassium        V-cillin-K-R                            
Tetracycline HCL              Achromycin-R                            

Antidepressant                                                                  
Amitriptyline HCL             Elavil-R                                
Chlordiazepoxide &                                                    
Amitriptyline                 Limbitrol-R                             
Doxepin HCL                   Adapin-R                                
Sinequan-R
Maprotiline HCL               Ludiomil-R                              
*Nortriptyline                Pamelor-R                               

Antidiabetic                                                                    
Chlorpropamide                Diabinese-R                             
Tolazamide                    Tolinase-R                              
Tolbutamide                   Orinase-R                               

Antidiarrheal                                                                   
Diphenoxylate HCL &                                                   
Atropine Sulfate              Lomotil-R                               
Loperamide HCL                Imodium-R                               

Antigout                                                                        
Allopurinol                   Zyloprim-R                              

Antihistamine                                                                   
Cyproheptadine                Periactin-R                             

Antihypertensive                                                                
Amiloride HCL &                                                       
Hydrochlorothiazide           Moduretic-R                             
Clonidine HCL                 Catapres-R                              
Clonidine HCL &                                                       
Chlorthalidone                Combipres-R                             
Methyldopa                    Aldomet-R                               
Methyldopa &                                                          
Hydrochlorothiazide           Aldoril-R                               
Metoprolol                    Lopressor-R                             
Prazosin HCL                  Minipres-R                              
Propranolol                   Inderal-R                               
Propranolol HCL &                                                     
Hydrochlorothiazide           Inderide-R                              

Anti-Inflammatory                                                               
Fenoprofen                    Nalfon-R                                
Ibuprofen                     Motrin-R                                
Rufen-R   
Meclofenamate                 Meclomen-R                              
*Naproxen                     Naprosyn-R                              
Piroxicam                     Feldene-R                               
*Sulindac                     Clinoril-R                              
*Tolmetin                     Tolectin-R                              

Antineoplastic                                                                  
Methotrexate                  Methotrexate-R                          
  Rheumatrex-R

Antipsychotic                                                                   
Fluphenazine HCL              Prolixin-R                              
Haloperidol                   Haldol-R                                
Thioridazine HCL              Mellaril-R                              
Thiothixene                   Navane-R                                

Anxiolytic                                                                      
Clorazepate Dipotassium       Tranxene-R                              

Beta Blocker                                                                    
*Atenolol and Chlorthalidone  Tenoretic-R                             
Pindolol                      Visken-R                                
Timolol Maleate               Blocadren-R                             

Bronchial Dilator                                                               
Albuterol Sulfate             Proventil-R                             

Calcium Channel Blocker                                                         
Diltiazem HCL                 Cardizem-R                              

Diuretics                                                                       
Chlorothiazide                Diuril-R                                
Chlorthalidone                Hygroton-R                              
Furosemide                    Lasix-R                                 
Methyclothiazide              Enduron-R                               
Reserpine & Chlorothiazide    Diupres-R                               
Spironolactone                Aldactone-R                             
Spironolactone &                                                      
Hydrochlorothiazide           Aldactazide-R                           
Hypnotic Agent                                                        
Flurazepam                    Dalmane-R                               
Temazepam                     Restoril-R                              

H2 Antagonist                                                                   
*Cimetidine                   Tagamet-R                               

Muscle Relaxant                                                                 
Cyclobenzaprine HCL           Flexeril-R                              

Uricosuric                                                                      
Probenecid                    Benemid-R                               

Proprietary Products                                                            
Antihypertensive                                                                
Maxzide-R                                                                       
Maxzide-R-25MG                                                                  
(Licensed to Lederle                                                            
Laboratories for Marketing)                                                     

To Our Shareholders                                                             

Milan Puskar                                                                    
Chairman of the Board, C.E.O. and President of the Company                      

Fiscal 1994 has been an intriguing year...filled with challenges                
and accomplishments.                                                            
We have licensed new products, formed new alliances and received                
new generic approvals from the FDA. Our product line now consists               
of 70 different chemical entities covering 22 therapeutic                       
categories.                                                                     
Eldepryl-R, the product of our joint-venture subsidiary Somerset                
Pharmaceuticals, continues to gain market share and has been a                  
constant contributor to our profits. During this fiscal year,                   
Somerset received approval from the FDA to manufacture Eldepryl-R               
at the Mylan plant in Caguas, Puerto Rico. This move has proven                 
to be much more efficient and cost effective.                                   
In November your company reached a settlement with Pharmaceutical               
Resources, Inc./Par Pharmaceuticals, defendants in Mylan's                      
R.I.C.O. lawsuit. Under the settlement, Pharmaceuticals                         
Resources, Inc. agreed to pay Mylan $1 million cash and $2                      
million in their common stock. We are pleased to have this issue                
settled and are pursuing settlement with the remainder of the                   
defendants in this lawsuit.                                                     
An increase to the quarterly dividend was announced at the                      
shareholders' meeting in June of 1993, which raised the annual                  
total to sixteen cents per share from twelve cents. Mylan has                   
distributed $11 million in cash dividends to its shareholders                   
through this dividend program. Also, net worth of the company                   
increased from $296 million to $380 million.                                    
Although competition in the generic field is tough and pricing                  
pressures are severe at the moment, the industry continues to                   
grow. Mylan is planning and building for the future and has                     
positioned itself to remain a leader in the generic industry.                   

Most sincerely,                                                                 

Milan Puskar                                                                    
Chairman, C.E.O. and President                                                  

In Memory of Roy McKnight                                                       

Roy McKnight touched the lives of all who knew him...it was just                
his way. He loved people, and whether it was at a business                      
meeting or on the golf course, he always had a good time.                       
Roy lived life to its fullest...He enjoyed his work thoroughly                  
and business associates knew they could call late in the evening or             
on weekends and find him in the office.                                         
His Mylan career began in 1975 when he was elected to the Board                 
of Directors of a small, troubled company. True to his style, Roy               
immediately began investigating Mylan's problems and found                      
ineffective management was the culprit.                                         
He also found that one of the founders of the company, Milan                    
(Mike) Puskar, had left in 1972 because of his displeasure with                 
management policies being adopted. Roy brought Mike back to the                 
company and on May 13, 1976 the two acquired control of Mylan                   
from a management team that had run the company into financial                  
difficulty.                                                                     
These co-architects designed the plan that took Mylan from a                    
negative balance sheet and questionable credibility to being the                
leading independent generic drug manufacturer whose word can be                 
banked upon and whose integrity is beyond question.                             
Under their leadership, Mylan has grown from one small                          
manufacturing facility of 120,000 square feet in Morgantown to a                
multi location fully integrated pharmaceutical company. The                     
Morgantown plant has increased to 500,000 square feet of                        
manufacturing and office space; there are two plants in Puerto                  
Rico, one in Caguas and one in Cidra; a subsidiary with                         
manufacturing capabilities in Sugar Land, Texas; a subsidiary                   
with two manufacturing sites in Vermont, one in St. Albans and                  
one in Swanton; two distribution centers, one in Greensboro,                    
North Carolina and one in Reno, Nevada; corporate headquarters                  
in Pittsburgh, Pennsylvania and regional sales offices throughout               
the United States.                                                              
Mylan was the first generic company to pay a dividend to its                    
shareholders. They were by declaration at first, but evolved into               
the regular quarterly dividend program which is presently in                    
place. Shareholders have also enjoyed the benefit of eight stock                
splits under the guidance of this duo.                                          
If you ever visited Roy McKnight at his office, you would have                  
seen a small wooden sign that read "PPPPP". It was Roy's                        
motto...he conducted his business life and his personal life by                 
it...he preached it to his wife, taught it to his children, and                 
instilled it in all of us at Mylan. It simply means "Prior                      
Planning Prevents Poor Performance".                                            
Roy and Mike were constantly planning for the future of this                    
company and Roy took great pride in the management team they have               
assembled. If you ever heard one of Roy's speeches you know how                 
he delighted in talking about the capabilities and expertise of                 
"the rest of the team". Roy was confident that Mylan has a great                
future because Mylan has great people!                                          
Roy had great courage...he always fought for what he believed in                
and for him life was very simple...you simply do what is right!                 
For                                                                             
Roy and Mike there is no other way...so when Mike Puskar realized               
that something improper was going on in the industry, Roy fought                
side by side with him for justice and eventually testified before               
the Dingell Committee.                                                          
On a personal level, you would never know of his great wealth and               
accomplishment. Roy was always down to earth with everyone. When                
anyone addressed him as Mr. McKnight, he would quickly reply,                   
"Just call me Roy, Mr. McKnight was my father." His friends                     
ranged from postmen to presidents...he talked to them all and                   
there was no pretense in his manner. He was a warm, sensible, caring            
human being. He gave unselfishly of himself to his family,                      
friends, employees, shareholders and management of the company he               
loved.                                                                          
His accomplishments won him numerous awards locally and                         
nationally including the Pittsburgh Vectors' David L. Lawrence                  
"Man of the Year" Award and three consecutive "C.E.O. of the                    
Year" Awards from Wall Street Transcript.                                       
Roy had the unique quality of being able to find time to do                     
everything he enjoyed and he would arrange his schedule                         
accordingly...he worked hard and played hard.                                   
He was an avid golfer and looked forward to 'relaxing' with his                 
clubs. His enjoyment of the game was legendary and the potential                
of meeting new people and renewing old acquaintances on the                     
course was ever exciting to him.                                                
He was a fan of all sports, but his favorite spectator game was                 
ice hockey. He had season tickets to the Pittsburgh Penguin games               
and probably enjoyed the winning of the two Stanley Cups as much                
as the team did.                                                                
Roy McKnight was a special man...and no one realizes that more                  
than his Mylan family. He possessed that rare blend of profundity and           
wit; of business acumen and the common touch.                                   
Mylan Laboratories will continue in the tradition of Roy's                      
leadership which has made the company a respected and recognized                
industry leader. He challenged us daily to be the very best we                  
could be and inspired us by his example.                                        
We miss his quick smile and his encouragement, but his                          
inspiration lives on in each of us. His goodness and character                  
has touched our lives and given us a bright future.                             
Thank you, Roy!                                                                 
"PPPPP"                                                                         

[PICTURE OF ROY MCKNIGHT][PAGE 6]                                               
Roy McKnight was born March 13, 1921 in Pittsburgh, Pennsylvania.               
He was elected to the Mylan board in 1975 and was elected                       
Chairman in 1976.                                                               

[PICTURE OF MYLANS' REGIONS IN THE U.S.][PAGE 7]                                
Under Roy and Mike's management, Mylan facilities have expanded                 
in number and size.                                                             

[PICTURE OF ROY MCKNIGHT AND MIKE PUSKAR][PAGE 7]                               
Roy and Mike believed in a 'hands on' style of management.                      

[PICTURE OF ROY MCKNIGHT AND RONALD REAGAN][PAGE 8]                             
Roy enjoyed talking to everyone, from postmen to presidents. Here               
he enjoys a handshake with Mr. Reagan.                                          

[PICTURE OF ROY MCKNIGHT ON 20/20][PAGE 8]                                      
Roy McKnights testimony before the Dingell Committee was                        
featured on 20/20.                                                              

[PICTURE OF ROY MCKNIGHT AT THE MAN OF THE YEAR CEREMONY]                       
[PAGE 9]                                                                        
Roy McKnight loved Pittsburgh...and so it was a fitting tribute                 
that he was named Man of the Year--for best representing the city               
he loved so much.                                                               

[PICTURE OF ROY MCKNIGHT GOLFING][PAGE 9]                                       
Relaxing on the 'greens' was Roy's favorite hobby.                              

Mylan began in 1961 as a privately owned company founded by our                 
Chairman, C.E.O. and President, Milan Puskar, and an associate                  
in White Sulphur Springs, West Virginia. Initially the company                  
did not manufacture product, but operated as a 'distributor'                    
buying finished goods and reselling to pharmacies, doctors, and                 
etc.                                                                            
In 1963 Mylan relocated to Princeton, West Virginia and then in                 
1965 to its present location in Morgantown. The company began                   
manufacturing vitamins in 1965, and in 1966 received approval to                
start manufacturing Penicillin G tablets. In July 1968 production               
was expanded to include Tetracycline after receiving FDA                        
approval.                                                                       
It was at this point that Mylan became recognized in the industry               
as a very competent manufacturer of quality products and in 1969                
Parke-Davis was the first major drug company to purchase finished               
goods from Mylan. The company continued to expand its list of                   
approved products with the addition of Erythromycin in 1971 and                 
Ampicillin in 1973, and its list of major drug companies                        
purchasing product under private label continued to increase.                   
But Mylan's growth was not limited to product line and customers,               
for on February 15, 1973 the first shares of stock were traded on               
the Over-the-Counter Market, and Mylan became a 'public' company.               
_Under the expert guidance of the present management team, which                
took over May 13, 1976, the company experienced unbelievable                    
growth and soon became eligible to be traded on the                             
National-Over-the-Counter (NASDAQ) Market. The 'marriage' of                    
Mylan and NASDAQ was a phenomenal combination. The rapidly                      
growing generic manufacturer rewarded its shareholders with six                 
stock splits in the short time span from July, 1979 through                     
February, 1985, gaining the title of "The Nation's Largest                      
Independent Drug Manufacturer". With 24 million shares of stock                 
trading in the marketplace, management felt continued growth                    
could only happen through a broader and more liquid yet closely                 
regulated market. On April 14, 1986 Mylan became a member of the                
Big Board--THE NEW YORK STOCK EXCHANGE--and its new symbol became               
MYL.                                                                            
Once again management's decision proved to be a wise one and with               
the new stable growth enjoyed on NYSE shareholders were rewarded                
with the seventh stock split in eight years. On August 1, 1986 a                
three-for-two stock dividend was forwarded to all Mylan investors               
and the company's outstanding shares grew to 36 million.                        
In 1984 Mylan introduced its first proprietary                                  
product--MAXZIDER, an antihypertensive drug that competes                       
successfully with Smith Kline Beecham's DyazideR, one of the most               
widely prescribed drugs in the United States. In May of 1988,                   
after three years of clinical testing, Mylan received approval on               
half strength MaxzideR, known as MaxzideR-25MG. This product                    
further strengthens Mylan's position in the mild to moderate                    
hypertensive market. Both of these MaxzideR products are licensed               
to Lederle Laboratories Division of American Cyanamid for                       
distribution.                                                                   
In November of 1988 Mylan announced the joint-venture purchase of               
Somerset Pharmaceuticals with another generic company. Somerset                 
is a small research company who was working on a drug for the                   
treatment of Parkinson's disease. The product, EldeprylR, was                   
approved by the Food and Drug Administration in June of 1989 and                
was launched in mid-September. It is an extremely effective drug                
widely recognized by physicians and is adding nicely to the Mylan               
bottom line.                                                                    
In May of 1989, Mylan's  then Chairman and C.E.O. Roy McKnight                  
testified before the House Oversight and Investigations Committee               
on behalf of the company regarding improprieties at the FDA                     
uncovered by Mylan's investigative work. This prompted an all out               
investigation of the generic drug industry and has exposed                      
cheating, payoffs and fraud. Overall the industry has been                      
shaken, but one thing remains solid...the honesty and integrity                 
of                                                                              
Mylan! For thirty-three years the company has had one creed--we                 
either do it right or we don't do it at all.                                    
At the annual shareholders meeting in June of 1991 Mylan                        
announced the signing of a definitive agreement and plan of                     
merger with Dow B. Hickam of Sugar Land, Texas. They are an                     
established high quality branded pharmaceutical company with a                  
highly skilled, aggressive marketing force...A necessary element                
in Mylan's strategic plan to become a fully integrated                          
pharmaceutical company. The merger was completed on October 30,                 
1991.                                                                           
Another strategic step was taken in January of 1993 when Mylan                  
announced that it had reached a definitive agreement to acquire                 
the assets of Bertek, Inc. headquartered in St. Albans, Vermont.                
Bertek is an important manufacturer and innovator of                            
state-of-the-art transdermal drug delivery systems. They also                   
have substantial operations in laminating and label                             
manufacturing.                                                                  
The acquisition was completed February 25, 1993.                                
Mylan's code of ethics has positioned it as the leader in the                   
generic field with a record of solid growth in a very                           
unpredictable market.                                                           
The other 'secret' to Mylan's success is its 'family' of                        
employees whose dedication to their work and pride in the company               
have been the backbone of this remarkable story. From maintenance               
to management it has been a blend of ideas, hard work and mutual                
respect, and continues to be the key to Mylan's ongoing success                 
and growth.                                                                     

The Year In Review                                                              

The past twelve months have been very interesting...we have seen                
changes in marketing styles...we have seen consolidation of                     
companies...we have seen increased pricing pressure...and we have               
handled each of these challenges with the same successful                       
teamwork that continues to allow Mylan to enjoy a position of                   
leadership in the industry. Our sales have increased to a record                
$251,773,000 and our net earnings increased to a record                         
$73,067,000. Mylan continues to increase its market share...we                  
are now the sixth most dispensed pharmaceutical company in                      
America. According to recent survey results, 19 of Mylan's                      
products rank number one in prescriptions dispensed and 22 rank                 
number two...that's 68% of our product line...and that is a                     
result of teamwork! From the moment a product becomes an idea in                
Mylans mind to the moment it gets approved and becomes a part of                
our product line, it is the creativity, dedication and production               
of all of our people, from maintenance to management, that allows               
us to enjoy this continued growth.                                              
Your company has received eight new approvals this year from the                
Food and Drug Administration, which further expands our ever                    
growing line of products. Presently, Mylan has submitted 16                     
different chemical entities to the FDA for approval, representing               
31 products of varying strengths, and we have many more in                      
development.                                                                    
In April of 1993 we announced the signing of a license agreement                
with Ferrer Internacional S.A. of Barcelona, Spain for all rights               
to its patented compound, Dotarizine, for the United States and                 
Canada. The agreement grants Mylan exclusivity for Dotarizine in                
the treatment of migraine and vertigo. It also promises Mylan the               
first right of refusal on all other indications, analogues and                  
derivatives of Dotarizine.                                                      
We signed a second licensing agreement with Survival Technology                 
Inc. (STI) for the development and production of a non-narcotic                 
prescription product for the management of pain, using STI's                    
patented Q-Pen-R Auto-Injector.                                                 
Under terms of the September agreement, STI will develop and                    
produce the new product which will be marketed by Mylan to family               
physicians, neurologists, pain specialists, hospitals, health                   
maintenance and managed care organizations. It is our hope that                 
this will be the first in a series of new products to be marketed               
by Mylan incorporating STI Auto-Injector drug delivery systems.                 
Our third licensing agreement this fiscal year was announced on                 
February 7, 1994, when we advised that our Mylan Pharmaceuticals                
Division had acquired the exclusive rights to AndaSR's technology               
for a sustained release formulation of                                          
terfenadine/pseudoephedrine hydrochloride, commonly known as                    
Seldane-D-R.                                                                    
The product will be jointly developed by Mylan and AndaSR, but                  
manufacturing will be done by Mylan in our own facilities.                      
Our most recent 'alliance' is with Eli Lilly and Company...one of               
the major drug companies with whom we have been speaking over the               
past several months. This particular arrangement is for the                     
co-promotion of cimetidine, Mylan's generic version of Tagamet-R,               
an anti-ulcer drug. Under the terms of the agreement, Lilly and                 
Mylan will co-promote cimetidine to managed-care and related                    
distribution networks. The co-promotion will focus on cimetidine                
as an economic and therapeutic choice for treatment of                          
uncomplicated gastrointestinal diseases such as ulcers.                         
All of these new relationships and the opportunities they bring                 
are significant steps in Mylan's continuing evolution into a                    
fully integrated pharmaceutical company.                                        
We are extremely proud of the recognition Mylan has received                    
throughout the year in major publications. The March 28, 1994                   
issue of Business Week featured Mylan as number 378 in their list               
of "America's 1000 Most Valuable Companies" and the November,                   
1993 issue of Forbes included Mylan in their list of "The best                  
small companies in the world." Med Ad News did a feature story on               
Mylan and its role in the generic marketplace, and the December,                
1993 issue of Executive Report Magazine heralded Mylan as number                
two in its list of top ten growth companies for 1993.                           
We are proud of these feature articles and we thank all of the                  
publications for their kind remarks.                                            
But we are really busting our vest buttons with pride at the                    
accomplishments of our sales and marketing team, they have                      
outdone their previous award winning performance and gathered                   
even more accolades for Mylan. They have received a 'Pharm/alert                
Award of Excellence' for superior pharmacy communication on their               
Diltiazem promotion, and they were chosen from over 400 others.                 
Alco Health Services chose Mylan as their #1 generic multi-source               
trading partner manufacturer, an honor that makes us very proud!                
The Art Directors Club of New Jersey has honored Mylan with the                 
Bronze award for our advertisement "A Delicate Balance of Science               
and Nature". This is an extremely prestigious award...the ad was                
selected from among more than 1,100 entries. We are pleased with                
this honor and the recognition of our commitment to the                         
environment which is expressed in this advertisement.                           
And, of course, the piece de resistance...the DIANA award...the                 
industry equivalent to an Emmy or an Oscar in the entertainment                 
world.                                                                          
Every year since 1959 The National Wholesale Druggists'                         
Association has recognized manufacturer excellence in new product               
introductions and promotional programs. The DIANA award                         
recognizes superior marketing efforts that enhance the                          
marketability of products through the drug distribution system.                 
The competition also focuses on the overall relationship between                
manufacturers and their drug wholesaler trading partners.                       
Mylan Pharmaceuticals was chosen, Best Overall Pharmaceutical                   
Manufacturer, in its class...and on November 16, 1993 Mylan was                 
presented with the beautiful gold DIANA trophy. It was a night to               
remember!                                                                       
Our shareholders are very important members of the Mylan family                 
and we strive to keep you informed of all of the happenings at                  
your company. We appreciate your letters and thoroughly enjoy                   
your phone calls. We now have 83,637 people who own a part of                   
Mylan, and no matter what the size of the ownership is...we are                 
grateful for your interest and your support.                                    
We also appreciate the honor bestowed on us again by the United                 
Shareholders Association who ranks the top 1000 Companies in the                
United States based on their treatment of shareholders as well as               
return on shareholder investment. We are pleased to say that for                
the fourth year in a row we rank number 10 nationally and number                
one in Pittsburgh. Mylan was ranked highest among all                           
pharmaceutical firms in the United Shareholders 1993 list                       
of 1,000 companies.                                                             
Tragedy struck the Mylan family in June of 1993 when Roger                      
Dieterich succumbed to cancer. Roger was one of our first                       
regional sales managers and what a job he did. His territory                    
included the states of: Washington, Montana, Oregon, Idaho,                     
Wyoming, Nebraska, Northern California, Nevada, Utah, Colorado,                 
Kansas, Arizona, New Mexico, Oklahoma, Texas and Alaska...1/3 of                
the entire United States and we had no Mylan accounts in any of                 
these areas. Roger was a marvelous man...he worked out a schedule               
and faithfully followed it.                                                     
He laid the ground work and established Mylan's reputation with                 
wholesalers and chains in his region...and that foundation                      
continues to be built upon by our current sales force. Mylan has                
grown substantially throughout that territory and we recognize                  
that it was the pioneer work done by Roger Dieterich that                       
initiated this growth.                                                          
Dedication, hard work, loyalty, integrity, courage, happy, fun                  
loving...are all adjectives that describe Roger Dieterich...but                 
none of them completely...because he was so much more than words                
can explain. He was a friend, a confidant, a teacher, an                        
employee, aloving father and husband...and one of God's great                   
gifts to us. It was our privilege to spend some time with Roger                 
Dieterich...we miss him...but we are much better for having known               
him!                                                                            
On November 6, 1993, tragedy struck the Mylan family a second                   
time when our beloved Chairman and C.E.O., Roy McKnight, was                    
stricken with a fatal heart attack while in Florida. As with                    
Roger, there are not enough words to describe the emptiness we                  
feel from the loss of Roy, but we have tried to give you some                   
insight into his life and accomplishments in the memorial on the                
previous pages. He was truly special!                                           
November 9, 1993, the Board of Directors unanimously elected Mr.                
McKnight's dear friend and teammate for the past 18 years, Milan                
Puskar, as Chairman and C.E.O. C.B. Todd, President, Mylan                      
Pharmaceuticals, was appointed to the Board of Directors at that                
same meeting.                                                                   
Our Board of Directors is another important component of our                    
Mylan family. The members are all intelligent, skilled and                      
knowledgeable men. They realize the gravity of their                            
responsibility and are dedicated to the common good of the                      
company, its employees and its shareholders. We appreciate their                
intensity and thank them for their guidance.                                    
It has been a challenging year...but a successful one. We have                  
grown our product line...our market share...our earnings...and our              
shareholder equity. We have had the pleasure of meeting more                    
shareholders, talking with analysts and brokers, making new                     
business partners, and welcoming new customers into the Mylan                   
fold. It has been a period of growth, obstacles and opportunity.                
The entire Mylan team, from maintenance to management, accepts                  
the challenge and is dedicated to the creativity, hard work and                 
integrity needed to continue the high level of quality and                      
performance for which Mylan is known.                                           
We look forward to the new year!                                                

[PICTURES OF THESE MEN LISTED][PAGE 12]                                         
Some of the Mylan Management Team.                                              
Dana Barnett, Sonny Todd, Rod Jackson, Carlos Machin                            

[PICTURES OF THE MEN LISTED][PAGE 13]                                           
John O'Donnell, Tom Clark, Joe Krivulka, Bill Richardson, David                 
Satter                                                                          

[PICTURE OF THE SALES STAFF][PAGE 14]                                           
Morgantown's sales support staff.                                               

[PICTURE OF MANY MAGAZINES WHERE MYLAN GETS RECOGNITION][PAGE 14]               
Mylan continues to receive recognition from major publications.                 

[PICTURE OF MYLAN AWARDS][PAGE 15]                                              
Sales awards for outstanding performance.                                       

[PICTURE OF CAGUAS ADMINISTRATION STAFF][PAGE 15]                               
Our Caguas, Puerto Rico administration staff.                                   

[PICTURE BOB LOMBARDI AND DAN DORSEY][PAGE 15]                                  
Bob Lombardi, Dan Dorsey                                                        

[PICTURE OF THE REGIONAL SALES MANAGERS][PAGE 16]                               
Mylan Pharmaceuticals Inc. Regional Sales Managers                              
Front Row:                                                                      
Linda Antonini                                                                  
Tina Charles                                                                    
Drew Blowess                                                                    
Back Row:                                                                       
Dennis Brown                                                                    
Bob Potter                                                                      
Dan King                                                                        
Michael Doan                                                                    
Tim O'Brien                                                                     

[PICTURE OF A FEW MEMBERS OF THE MYLAN SALES STAFF][PAGE 17]                    
A few of the members of the Mylan sales staff                                   
Jack Walsh                                                                      
Dan Hill                                                                        
Steve Krinke                                                                    
Dale Martin                                                                     
Lynn Cayton                                                                     
Mark Jordan                                                                     
Brad Cunningham                                                                 

[PICTURE OF ROGER DIETERICH, ROD JACKSON, AND MIKE PUSKAR]                      
[PAGE 18]                                                                       
Roger Dieterich seated with Rod Jackson and Mike Puskar.                        

[PICTURE OF THE BOARD OF DIRECTORS][PAGE 19]                                    
Board of Directors                                                              
Mylan Laboratories Inc.                                                         

Front Row:                                                                      
Dana G. Barnett                                                                 
Milan Puskar                                                                    
C.B. Todd                                                                       
Back Row:                                                                       
Robert W. Smiley, Esq.                                                          
Richard A. Graciano                                                             
Laurence S. DeLynn                                                              
John C. Gaisford, M.D.                                                          

Mylan Directory                                                                 

Mylan Pharmaceuticals Inc.                                                      
Morgantown, West Virginia                                                       
President                                                                       
C. B. Todd                                                                      
Executive Vice President                                                        
Louis J. DeBone                                                                 
Executive Vice President                                                        
Dr. John P. O'Donnell                                                           
Vice President, Purchasing                                                      
Richard F. Stupar                                                               
Vice President, Quality Control                                                 
D. Byron Witt                                                                   
Vice President, Manufacturing                                                   
Charles H. Crunkleton                                                           
Vice President, Pharmacokinetics and                                            
Regulatory Affairs                                                              
Patrick K. Noonan                                                               
Vice President, Marketing and Sales                                             
Robert A. Lombardi                                                              

Mylan Inc.--Caguas, Puerto Rico                                                 
Vice President and General Manager                                              
Carlos Machin                                                                   

Somerset Pharmaceuticals, Inc.--Tampa, Florida                                  
President and Chief Executive Officer                                           
Dana G. Barnett                                                                 
Vice President                                                                  
Dr. Cheryl Blume                                                                

Dow Hickam Pharmaceuticals--Sugar Land, Texas                                   
President                                                                       
William W. Richardson                                                           
Executive Vice President and Chief Financial Officer                            
David M. Satter                                                                 
Vice President, Technical Affairs                                               
Robin F. Scamuffa                                                               
Vice President, Manufacturing                                                   
E. Dwayne Dickey                                                                

Bertek, Inc.--St. Albans, Vermont                                               
President                                                                       
Joe Krivulka                                                                    
Vice President, Manufacturing Pharmaceutical Division                           
John Campbell                                                                   
Vice President, Pharmaceutical Development                                      
Dr. Sharad Govil                                                                

Mylan Laboratories is a growth company...Carefully evolving from                
asmall generic firm into a fully integrated pharmaceutical                      
company. We continue to increase our product line, expand our                   
sales base and multiply our facilities. Our parent organization                 
is Mylan Laboratories Inc. headquartered in Pittsburgh,                         
Pennsylvania. Subsidiaries are Mylan Pharmaceuticals Inc. located               
in Morgantown, West Virginia; Mylan Inc. in Caguas, Puerto Rico;                
Dow Hickam Pharmaceuticals in Sugar Land, Texas and Bertek, Inc.                
headquartered in St. Albans, Vermont. There are two distribution                
centers--one located in Greensboro, North Carolina and a second                 
in Reno, Nevada, as well as eight regional sales offices                        
throughout the United States. Our joint-venture subsidiary,                     
Somerset Pharmaceuticals, is located in Tampa, Florida.                         

[PICTURE OF A FEW EMPLOYEES FROM PUERTO RICO][PAGE 21]                          
A few of the employees from our Mylan family in Puerto Rico                     

Financial Highlights                                                            
March 31                           1994           1993                          
Net Sales                     $251,773,000    $211,964,000                      

Net Earnings                  $ 73,067,000    $ 70,621,000                      

Earnings Per Share            $        .93    $        .92                      

Working Capital               $191,647,000    $154,000,000                      

Current Ratio                    11.7 to 1        6.8 to 1                      

Total Assets                  $403,325,000    $351,105,000                      

Shareholders' Equity          $379,969,000    $295,972,000                      

Book Value Per Share          $       4.81    $       3.84                      
The above financial data gives retroactive effect to the                        
two-for-one stock split effective August 1, 1992.                               

Financial Highlights                                                            

Net Earnings                                                                    
(In millions)                                                                   

FY     NET EARNINGS                                                       
----    ------------                                                        
1990    26.6                                                                
1991    33.0                                                                
1992    40.1                                                                
1993    70.6                                                                
1994    73.1                                                                

Shareholders' Equity                                                            
(In millions)                                                                   

FY      SHAREHOLDERS' EQUITY                                                
----    ------------                                                        
1990    141.33                                                              
1991    167.5                                                               
1992    203.5                                                               
1993    296.0                                                               
1994    380.0                                                               

Net Sales                                                                       
(In millions)                                                                   

FY      NET SALES                                                           
----    ------------                                                        
1990    107.4                                                               
1991    104.5                                                               
1992    131.9                                                               
1993    212.0                                                               
1994    251.8                                                               

                                                        [Enlarge/Download Table]


Selected Financial Data                                                                                                             
Year ended March 31           1994      1993      1992      1991     1990      1989      1988                                       
                                                                                                                                    
Net Sales                     $251,773  $211,964  $131,936 $104,524  $107,435  $ 99,558  $107,840                                   

Net Earnings                  $ 73,067  $ 70,621  $ 40,114  $32,952  $ 26,573  $ 19,265  $ 26,361                                   

Earnings Per Share            $    .93  $    .92  $    .52  $   .43  $    .35  $    .25  $    .35                                   

Shares Used In Computation      78,949    77,101    76,484   76,368    76,226    76,140    76,012                                   

At year end                                                                                                                         
Working Capital               $191,647  $154,000  $102,105 $ 81,571  $ 65,393  $ 73,022  $ 73,067                                   

Total Assets                  $403,325  $351,105  $226,720 $186,955  $156,911  $131,246  $126,120                                   

Long-Term Obligations         $  4,609  $  5,125  $  3,600  $ 3,398  $  2,705  $  3,946  $  9,738                                   

Shareholders' Equity          $379,969  $295,972  $203,452 $167,531  $141,262  $117,945  $102,332                                   

Book Value Per Share          $   4.81  $   3.84  $   2.66  $  2.19  $   1.85  $   1.55  $   1.35                                   

Numbers in thousands except per share amounts.                                                                                      
From June of 1985 through June of 1990 the Company paid asemi-annual cash                                                           
dividend of $.05 per share per year. From June of 1990 through July of 1992 the Company had a quarterly                             
dividend program totaling $.10 per share per year. From October of 1992 to July of 1993 the Company had a quarterly dividend program
totaling $.12 per share per year. Since October of 1993 the Company has a quarterly dividend program                                
totaling $.16 per share per year.                                                                                                   
The above financial data gives retroactive effect to the October 30, 1991 business combination of Mylan                             
Laboratories Inc. and Dow Hickam Pharmaceuticals and the two-for-one stock split effective August 1,                                
1992.                                                                                                                               

Management's Discussion and Analysis of Results                                 
Of Operations and Financial Position                                            

Overview                                                                        
Fiscal 1994 operations provided record high net sales and net                   
earnings for the third consecutive year. Since 1992 Mylan has increased         
by 91% and net earnings by 82%.                                                 
Net earnings of the Company during fiscal 1994 were directly                    
affected by new accounting requirements relating to income taxes,passage of a   
new federal income tax bill, non-recurring charges resulting from the           
unexpected death of the Company's Chairman and Chief Executive Officer and      
the impactof the Company's expansion into new areas of product research and     
development.                                                                    
At the same time, the entire pharmaceutical industry has undergone rapid      
change in response to both governmental and private sector efforts to           
reform health care in America. Part of this response has been the increased     
participation by major branded pharmaceutical companies in the generic side of  
the business through either the addition of newly formed generic subsidiaries   
or the acquisition of significant interests in existing generic firms.          
These entries into an already competitive market resulted in intensive price    
competition during the year.                                                    
Despite the significant price competition, the Company realized a               
24% increase in volume of generic product shipments in fiscal                   
1994, thusallowing the Company to increase by 60% its investment in the         
future through research and development.                                        

Results of Operations                                                           
Net Sales and Gross Margin                                                      

Net sales for the years ended March 31, 1994, 1993 and 1992 were                
$251,773,000,$211,964,000 and $131,936,000 respectively. The growth of 19%      
from 1993 to 1994 is attributable to the addition of eight products to the      
Company's generic product line during the year and an overall increase of 24% in
the volume of generic product shipments which helped to offset significant      
price deterioration, particularly related to products added to our line         
in fiscal 1993 and 1992. Net sales for fiscal 1994 also reflect a full year     
of sales from Bertek which was acquired in February of 1993.                    
The 61% increase in net sales from 1992 and 1993 was in large                   
part due to increased sales of generic products including the effect of         
adding to our product line five new products during fiscal 1992 and four new    
products during fiscal 1993.                                                    
Gross margins as a percent of net sales for fiscal years 1994,                  
1993 and 1992 were 50%, 57% and 47% respectively. The fluctuation in these      
rates is indicative of new product additions and significant price              
competition in the generic product line, particularly for products added to     
the line during the last three fiscal years. The 1994 rate was also affected by 
the recognition of sales from Bertek which generally provides lower gross margin
rates. Due to the competitive nature of the generic pharmaceutical industry and 
the continued pressures on the pharmaceutical industry in general, the net      
sales and gross margin percentages recognized in fiscal 1994 are not necessarily
indicative of the results to be expected in future periods.                     

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS                   
AND FINANCIAL POSITION                                                          

Research and Development                                                        
Research and Development expenses were $21,648,000 in 1994                      
compared to $13,524,000 in 1993 and $7,885,000 in 1992. These                   
amounts represent approximately 9% of net sales in 1994 and 6% of               
net sales in both 1993 and 1992. Fiscal 1994 expenditures include               
amounts for transdermal delivery system development in addition                 
to increased expenditures for ongoing research and development of               
both innovative and generic products. The Company continues its                 
commitment to new and increased product development.                            

Selling and Administrative                                                      
Selling and Administrative expenses were $49,143,000 in fiscal                  
1994 compared to $36,650,000 in fiscal 1993 and $27,832,000 in                  
1992, which represent approximately 20%, 17% and 21% of                         
corresponding net sales. The fiscal 1994 amount includes                        
approximately $3,143,000 in amortization of intangible assets                   
associated with the Bertek acquisition and $3,229,000 in expenses               
resulting from the death of Mr. McKnight, the former Chairman and               
Chief Executive Officer of the Company. Other changes from 1993                 
to 1994 and the change in expenses incurred in 1993 from 1992 are               
attributable in large part to compensation and related expenses,                
selling/marketing expenses associated with new products including               
sales commissions, and legal and professional fees associated                   
with the various court actions to which the Company has been                    
involved.                                                                       

Equity in Earnings of Somerset                                                  
Somerset's contribution to the Company's pretax earnings (in                    
thousands) and earnings per share are as follows:                               

                                                                [Download Table]

                    1994                1993                        1992        
Quarter       Pretax    Earnings       Pretax    Earnings       Pretax  Earnings
Ended         Earnings  Per Share      Earnings  Per Share      Earnings Per    
Share                                                                           
                                                                                
6/30          $ 5,682   $.06           $ 4,309   $.05           $ 4,335  $.05   
9/30            5,727    .07             5,101    .06             4,520   .05   
12/31           6,841    .08             6,120    .07             4,708   .06   
3/31            5,346    .06             5,606    .06             5,101   .06   
Fiscal                                                                          
Year          $23,596   $.27           $21,136   $.24           $18,664  $.22   


Under the Orphan Drug Act, Somerset has exclusivity relating to                 
marketing the chemical compound Eldepryl-R for use as a treatment               
for late stage Parkinson's disease through June of 1996. Under                  
the Waxman Hatch Act, Somerset has exclusivity for all uses of                  
the chemical compound through June of 1994. Somerset is actively                
involved in research projects regarding additional uses of the                  
chemical compound.                                                              

Other Income                                                                    
Other income for the year ended March 31, 1994 was $8,148,000                   
compared to $3,879,000 in 1993 and $5,490,000 in 1992. The 1994                 
amount includes $3,375,000 in legal settlements. Other changes                  
are indicative of market fluctuations affecting the yields on                   
investments.                                                                    

Income Taxes                                                                    
The effective tax rates for 1994, 1993 and 1992 were 16%, 27% and               
20% respectively. The 1994  effective tax rate was reduced by 5%                
as a result of recording the cumulative effects of changes in                   
financial reporting requirements and changes in the Federal tax                 
code.                                                                           
The Company recognized tax credits which reduced the effective                  
tax rates by approximately 8% in 1994, 2% in 1993 and 5% in 1992.               
The tax credits result pricipally from operations in Puerto Rico                
and also from credits for increasing research and development                   
activities. Changes in the federal tax code enacted in 1993 will                
reduce future tax credits otherwise available for operating in                  
Puerto Rico by 40% in fiscal 1995 with additional 5% reductions                 
in the following four fiscal years. In addition, recent tax                     
rulings may reduce the amount of credit otherwise available to                  
the Company for future research and development activities.                     

Liquidity and Capital Resources                                                 
Total assets increased by 15% to $403,325,000 at March 31, 1994                 
and total liabilities decreased by 58% to $23,356,000. Working                  
capital of $191,647,000 represents 50% of net worth at March 31,                
1994 versus $154,000,000 or 52% of net worth at March 31, 1993.                 
The ratio of current assets to current liabilities was 11.7 to 1                
at March 31, 1994 versus 6.8 to 1 at March 31, 1993.                            
Cash flows from operating activities dropped from 1993 to 1994                  
primarily due to build ups in accounts receivable and inventories               
and also due to higher levels of tax payments in the current                    
year.                                                                           
The Company used considerably higher amounts of cash during                     
fiscal 1994 for investments in property, plant and equipment and                
both long-term and short-term financial investments. Property,                  
plant and equipment additions included significant expansion and                
renovation of facilities in Puerto Rico and Vermont and a                       
recently initiated expansion project for the Greensboro                         
distribution center. During 1994 the Company acquired aircraft                  
which were previously leased on a flight by flight basis. All                   
capital additions during fiscal 1994 were made with the general                 
funds of the Company and without incurring additional borrowings.               
As of March 31, 1994 the Company has commitments for future                     
capital expenditures of approximately $2,200,000.                               
Payments of long-term obligations in 1994 represents a final                    
settlement with the estate of Roy McKnight in connection with Mr.               
McKnight's salary continuation agreement. Prior year payments                   
were primarily for obligations assumed in the business                          
combinations of Bertek in 1993 and Hickam  in 1992.                             
The Company paid cash dividends of $.14 per share in 1994                       
totalling $11,026,000 compared to $.11 per share in 1993 which                  
totalled $8,476,000.                                                            
The Financial Accounting Standards Board has issued a new                       
statement, Statement No. 115, "Accounting for Certain Investments               
in Debt and Equity Securities", which will become effective for                 
the Company beginning in fiscal 1995. Management does not believe               
that the adoption of this statement will have a material impact                 
on the financial position or results of operations of the                       
Company.                                                                        

                                                                [Download Table]


Consolidated Balance Sheets                                                  
March 31                                     1994               1993         
                                                                             
Assets                                                                       
Current Assets                                                               
Cash and cash equivalents                    $ 75,526,000       $ 98,246,000 
Short-term investments                         12,925,000          --        
Accounts receivable                            55,430,000         32,396,000 
Inventories                                    57,996,000         45,949,000 
Prepaid income taxes                            1,265,000            --      
Deferred income tax benefit                     2,082,000            --      
Other current assets                            4,349,000          3,891,000 
-----------------------------------------------------------------------------
Total Current Assets                          209,573,000        180,482,000 

Property, Plant and Equipment                                                
--Net of accumulated depreciation              82,514,000         68,519,000 
Intangible Assets                                                            
--Net of accumulated amortization              33,228,000         38,115,000 
Other Assets                                   60,247,000         49,145,000 
Investment In and Advances to Somerset         17,763,000         14,844,000 
-----------------------------------------------------------------------------
Total Assets                                 $403,325,000       $351,105,000 


See notes to consolidated financial statements.                                 

                                                                [Download Table]


Consolidated Balance Sheets                                                 
March 31                                     1994               1993        
                                                                            
Liabilities and Shareholders' Equity                                        
Current Liabilities                                                         
Trade accounts payable                       $  6,699,000       $  6,492,000
Income taxes payable                             --                9,349,000
Other current liabilities                       8,056,000          8,293,000
Cash dividend payable                           3,171,000          2,348,000
Total Current Liabilities                      17,926,000         26,482,000

Acquisition Obligation                           --               21,303,000
Long-Term Obligations                           4,609,000          5,125,000
Deferred Income Tax Liability                     821,000          2,223,000

Shareholders' Equity                                                        
Preferred stock, par value $.50 per share,                                  
 authorized 5,000,000 shares,                                               
 issued and outstanding--none                       --                --    
Common stock, par value $.50 per share,                                     
 authorized 300,000,000 shares,                                             
 issued 79,697,295 shares at March 31, 1994                                 
 and 78,615,453 shares at March 31, 1993       39,849,000         39,309,000
Additional paid-in capital                     54,272,000         29,866,000
Retained earnings                             288,357,000        227,139,000
                                              382,478,000        296,314,000
Less treasury stock at cost--                                               
495,864 shares at March 31, 1994 and                                        
430,206 shares at March 31, 1993                2,509,000            342,000
Net Worth                                     379,969,000        295,972,000

Total Liabilities and Shareholders' Equity   $403,325,000       $351,105,000


                                                                [Download Table]

Consolidated Statements of Earnings                                         
Year ended March 31                1994           1993          1992        
                                                                            
Net Sales                          $251,773,000   $211,964,000  $131,936,000

Cost and Expenses                                                           
Cost of Sales                       125,631,000     89,400,000    69,877,000
Research and development             21,648,000     13,524,000     7,885,000
Selling and administrative           49,143,000     36,650,000    27,832,000
Interest                                 30,000         64,000       354,000
                                    196,452,000    139,638,000   105,948,000

Equity in Earnings of Somerset       23,596,000     21,136,000    18,664,000
Other Income                          8,148,000      3,879,000     5,490,000
Earnings Before income Taxes         87,065,000     97,341,000    50,142,000
Income Taxes                         13,998,000     26,720,000    10,028,000
Net Earnings                       $ 73,067,000   $ 70,621,000  $ 40,114,000

Earnings Per Share                 $        .93   $        .92  $        .52

Weighted Average Common Shares       78,949,000     77,101,000    76,484,000


See notes to consolidated financial statements.                                 

Consolidated Statements of Shareholders Equity                                  

                                                        [Enlarge/Download Table]


                                Common Stock  Common Stock       Additional  Retained     
                                      Shares        Amount  Paid-In Capital  Earnings     
                                                                                          
April 1, 1991                  $38,383,065    $19,193,000   $ 4,572,000      $144,138,000 
Stock options exercised            248,308        124,000     3,127,000           --      
Cash dividend $.10 per share         --             --           --            (7,463,000)
Net earnings                         --             --           --            40,114,000 

March 31, 1992                 $38,631,373    $19,317,000   $ 7,699,000      $176,789,000 
Stock options exercised            713,857        357,000    12,732,000            --     
Cash dividend $.115 per share        --             --           --            (8,902,000)
Stock split (2 for 1)           38,654,343     19,327,000    (7,958,000)      (11,369,000)
Bertek acquisition                 615,880        308,000    17,393,000            --     
Net earnings                         --             --           --            70,621,000 

March 31, 1993                 $78,615,453    $39,309,000   $29,866,000      $227,139,000 
Stock options exercised            347,747        173,000     4,447,000            --     
Cash dividend $.15 per share         --             --           --           (11,849,000)
Bertek acquisition                 734,095        367,000    19,959,000            --     
Net earnings                         --             --           --            73,067,000 

March 31, 1994                 $79,697,295    $39,849,000   $54,272,000      $288,357,000 


See notes to consolidated financial statements.                                 

                                                                [Download Table]


Consolidated Statements of Cash Flows                                          
                                                                               
Year ended March 31                      1994          1993        1992        
Cash Flows from Operating Activities                                           
Net earnings                             $73,067,000  $70,621,000 $40,114,000  
Adjustments to reconcile net earnings to net                                   
 cash provided from operating activities:                                      
  Depreciation and amortization           11,154,000    5,089,000   5,060,000  
  Deferred income tax benefit               (656,000)    (888,000) (1,336,000) 
  Equity in earnings of Somerset         (23,596,000) (21,136,000) (18,664,000)
  Cash received from Somerset             20,676,000   19,966,000   22,461,000 
  Other noncash expenses                   4,192,000    3,758,000    2,238,000 
  Changes in operating assets and liabilities:                                 
    Accounts receivable                  (23,485,000)  (9,073,000)  (5,622,000)
    Inventories                          (12,002,000)  (9,825,000)  (3,571,000)
    Trade accounts payable                   207,000    1,911,000      876,000 
    Income taxes payable                 (11,111,000)   6,263,000    3,689,000 
    Other operating assets and liabilities(2,813,000)   1,651,000      109,000 
Net cash provided from                                                         
operating activities                      35,633,000   68,337,000   45,354,000 

Cash Flows from Investing Activities                                           
 Additions to property,                                                        
  plant and equipment                    (20,164,000) (12,294,000) (10,041,000)
 Repayment of advances to Somerset           --           --           574,000 
 Increase in intangible and other assets (15,147,000) (10,833,000) (13,399,000)
     Increase in short-term investments  (12,925,000)     --            --     
     Other investment proceeds             4,800,000      --            --     
Net cash used in investing activities    (43,436,000) (23,127,000) (22,866,000)


See notes to consolidated financial statements.                                 

                                                                [Download Table]


Consolidated Statements of Cash Flows                                               

Year ended March 31                          1994           1993           1992     
Cash Flows from Financing Activities                                                
                                                                                    
Payments on long-term obligations        $ (4,320,000)  $ (8,373,000)  $ (7,081,000)
Cash dividend paid                        (11,026,000)    (8,476,000)    (7,355,000)
Proceeds from long-term debt                   --             --          6,000,000 
Payments on acquisition obligation           (977,000)        --             --     
Proceeds from exercise of stock options     1,406,000      9,561,000      2,650,000 
Net cash used in financing  activities    (14,917,000)    (7,288,000)    (5,786,000)

Net Increase (Decrease) in Cash                                                     
  and Cash Equivalents                    (22,720,000)    37,922,000     16,702,000 
Cash and Cash Equivalents--                                                         
Beginning of Year                          98,246,000     60,324,000     43,622,000 

Cash and Cash Equivalents--                                                         
End of Year                              $ 75,526,000   $ 98,246,000   $ 60,324,000 


For purposes of presentation in the statements of cash flows,                   
cash, overnight deposits and money market funds with maturities                 
of less than three months have been classified as cash and cash                 
equivalents. The carrying value of these items approximates fair                
value.                                                                          
Cash payments for interest were $30,000 in 1994, $64,000 in 1993                
and $355,000 in 1992. Cash payments for income taxes were                       
$27,055,000 in 1994, $21,345,000 in 1993 and $7,667,000 in 1992.                
During fiscal 1993 the Company acquired substantially all of the                
assets of Bertek, Inc. (Bertek) (see note B) for approximately                  
$39,112,000 and assumed liabilities of approximately $10,090,000.               
During the years ended March 31, 1994 and 1993, $20,326,000 and                 
$17,701,000 of the purchase price was satisfied through the                     
issuance of the Company's common stock. At the closing of this                  
transaction, the Company repaid with cash approximately                         
$8,293,000 in long-term debt obligations assumed.                               
During fiscal 1993 the Company declared a 2 for 1 stock split                   
effected in the form of a stock dividend (see note K).                          
Certain stock option transactions result in a reduction of income               
taxes payable and a corresponding increase in additional paid in                
capital. The amount for the years ended March 31, 1994, 1993 and                
1992 were $1,040,000, $3,528,000 and $601,000 respectively.                     
During fiscal 1994 the Company received and recorded into                       
treasury stock 75,658 shares of common stock valued at $2,174,000               
in consideration for the exercise of stock options.                             

A. Summary of Significant Accounting Policies                                   
1. Principles of Consolidation and Business                                     
The consolidated financial statements include the accounts            
of Mylan Laboratories Inc. (the Company) and its wholly-owned                   
subsidiaries, Mylan Pharmaceuticals Inc., Milan Holding Inc.,                   
Mylan Inc., Dow Hickam Pharmaceuticals, Inc. and Bertek, Inc.                   
(see note B). All intercompany accounts and transactions have                   
been eliminated in consolidation. The Company's principal line of               
business is the manufacturing of pharmaceutical products. The                   
Company had sales to one customer which represented 12% and 10%                 
of net sales in 1993 and 1992 and to another customer which                     
represented 12% of net sales in 1992.                                           
No single customer represented more than 10% of net sales in                    
1994.                                                                           

2. Short-Term Investments                                                       
The Company's portfolio of short-term investments is                  
recorded at the lower of aggregate cost or market at the balance                
sheet date and consists of preferred stocks, bonds and other                    
marketable securities. Dividends and interest income are accrued                
as earned. At March 31, 1994, the Company has recorded net                      
unrealizable losses of approximately $800,000, based on quoted                  
market prices. In May of 1993, the Financial Accounting Standards               
Board issued Statement of Financial Accounting Standard No. 115,                
"Accounting for Certain Investments in Debt and Equity                          
Securities". This statement is effective for fiscal year 1995.                  
Management does not believe that the adoption of this statement                 
will have a material impact on the financial position or results                
of operations of the Company.                                                   

3. Accounts Receivable                                                          
Accounts receivable are presented net of allowances which             
amounted to $3,449,000 at March 31, 1994 and $2,999,000 at March                
31, 1993.                                                                       

4. Inventories                                                                  
Inventories are stated at the lower of cost (principally,             
first-in, first-out) or market.                                                 

5. Property, Plant and Equipment                                                
Property, plant and equipment are stated at cost.                     
Depreciation is provided in amounts sufficient to relate cost of                
depreciable assets to operations over the estimated service                     
lives, principally on a straight-line basis.                                    

6. Research and Development                                                     
Research and development expenses are charged to operations           
as incurred.                                                                    

7. Income Taxes                                                                 
Effective April 1, 1993 the Company adopted Statement of              
Financial Accounting Standards (SFAS) No. 109 "Accounting for                   
Income Taxes". The statement requires that deferred income taxes                
reflect the tax consequences on future years of events that have                
already been recognized in the financial statements or tax                      
returns. Prior to April 1, 1993 deferred income taxes were                      
provided for the difference between income and expense                          
recognition for financial reporting purposes and income tax                     
purposes.                                                                       

8. Earnings Per Share                                                           
Earnings per share of common stock are based on the weighted          
average number of shares outstanding during each year. The effect               
on earnings per share, resulting from the assumed exercise of                   
outstanding stock options, is not material.                                     

B. Business CombinationBertek                                                   
On February 25, 1993 a wholly-owned subsidiary of the                 
Company acquired substantially all of the net assets of Bertek,                 
Inc. (Bertek). Bertek, headquartered in St. Albans, Vermont, is a               
manufacturer of transdermal drug delivery systems and also has                  
operations in laminating and label manufacturing.                               
The business combination has been accounted for under the             
purchase method of accounting. Goodwill of approximately                        
$2,686,000 resulting from the acquisition is being amortized on a               
straight-line basis over a 20 year period.                                      

The results of Bertek's operations have been included in the          
Company's Consolidated Statements of Earnings from the date of                  
acquisition. Unaudited proforma information assuming the                        
acquisition had occurred on April 1, 1991 is as follows: (in                    
thousands except per share data)                                                
Year Ended March 31,           1993      1992                                   
Net sales                     $231,480  $153,764                                
Net earnings                  $ 69,049  $ 38,859                                
Earnings per share            $    .88  $    .50                                

C. Inventories                                                                  
Inventories consist of the following components: (in thousands)                 
March 31,                      1994      1993                                   
Raw materials                 $ 26,138  $ 23,115                                
Work in process                 14,978    11,553                                
Finished goods                  16,880    11,281                                
$ 57,996  $ 45,949  

D. Property, Plant and Equipment                                                
Property, plant and equipment consists of the following                         
components: (in thousands)                                                      
March 31,                      1994      1993                                   
Land and land improvements    $  5,088  $  5,088                                
Buildings and improvements      41,705    36,530                                
Machinery and equipment         59,178    45,758                                
Construction in progress         9,143     7,574                                
115,114    94,950 
Less accumulated depreciation   32,600    26,431                                
$ 82,514  $ 68,519  

E. Investment In and Advances to Somerset                                       
On June 21, 1989 the Company acquired 50% of all the                  
outstanding common and preferred stock of Somerset                              
Pharmaceuticals, Inc. (Somerset). On June 5, 1989 Somerset                      
received approval from the Food and Drug Administration to market               
the product EldeprylR. Sales of this product, which is used in                  
the treatment of late stage Parkinson's disease, commenced in                   
late August 1989. The Company uses the equity method of                         
accounting for the investment in Somerset.                                      
Equity in Earnings of Somerset includes the Company's 50%             
portion of Somerset net earnings and expense for amortization of                
intangible assets resulting from the acquisition of Somerset.                   
Such intangible assets are amortized over a 15 year period.                     
Amortization expense amounted to $924,000 in 1994, 1993 and 1992.               
Additionally, the Company's charges to Somerset for management                  
services and product development activities are included in                     
Equity in Earnings of Somerset. These charges have been recorded                
by Somerset as a reduction of its net earnings.                                 

Condensed unaudited balance sheet information of Somerset is as               
follows: (in thousands)                                                         
March 31,                 1994          1993           1992                     
Current assets           $ 27,931      $ 30,409       $ 24,597                  
Non-current assets          6,043         2,760          2,791                  
Current liabilities        14,918        20,675         15,413                  
Payable to owners           1,002         1,796          1,490                  
Other liabilities             642           808            975                  

Condensed unaudited income statement information of Somerset is               
as follows: (in thousands)                                                      
Year Ended March 31,      1994          1993           1992                     
Net sales                $111,970      $108,518       $ 93,513                  
Costs and expenses         50,465        49,872         42,041                  
Income taxes               19,547        21,789         18,806                  
Net earnings             $ 41,958      $ 36,857       $ 32,666                  
The above information represents 100% of Somerset's operations                
of which the Company has a 50% interest.                                        
F. Intangible Assets                                                            
Intangible Assets include $22,324,000 and $23,771,000                 
related to values assigned to acquired patents and technology at                
March 31, 1994 and 1993, respectively, net of accumulated                       
amortization.                                                                   
The remaining amounts consist principally of values assigned          
to licenses, agreements and goodwill.                                           
Amortization is provided on a straight-line basis over                
periods ranging from 14 to 17 years for patents and technology                  
and 2 to 20 years for other intangible assets.                                  
Intangible assets are stated net of accumulated amortization          
of $8,874,000 and $3,888,000 at March 31, 1994 and 1993                         
respectively.                                                                   

G. Other Assets                                                                 
Other assets consist of the following components: (in thousands)      
March 31,                     1994             1993                             
Long-term investments        $30,284          $28,220                           
Cash surrender value          16,254            8,402                           
Captive insurance company      7,712            6,776                           
Other assets                   5,997            5,747                           
  $60,247          $49,145
Long-term investments include fixed income securities and             
notes, carried at cost, and pooled asset funds, carried at the                  
lower of cost or market which consist of common and preferred                   
stocks, bonds, and money market funds. Earnings on these                        
investments included under the caption _"Other Income" amounted                 
to $1,467,000 in 1994, $340,000 in 1993 and $3,175,000 in 1992.                 
At March 31, 1994 and 1993 the carrying amounts of these                        
investments approximated fair value based on quoted market                      
prices.                                                                         
Cash Surrender Value represents insurance policies on                 
certain officers and key employees and the value of a split                     
dollar life insurance arrangement with the estate of                            
the former Chairman and Chief Executive Officer of the Company.                 
(See note N for                                                                 
further discussion.)                                                            

The Company's interest in a captive insurance company is              
accounted for by the equity method of accounting. Earnings from                 
this investment included under the caption _Other Income_                       
amounted to $937,000 in 1994, $940,000 in 1993 and $905,000 in                  
1992.                                                                           

H. Other Current Liabilities                                                    
Other current liabilities includes payroll and employee               
benefit plan accruals which amounted to $5,388,000 at March 31,                 
1994 and $4,459,000 at March 31, 1993, and accruals for Medicaid                
Reimbursements of $1,479,000 at March 31, 1994 and $2,141,000                   
at March 31, 1993.                                                              

I. Long-Term Obligations                                                        
Long-term obligations represent accruals for post-retirement          
compensation pursuant to agreements with certain key employees.                 
Under these agreements, benefits are to be paid over periods of                 
10 to 15 years commencing at retirement.                                        

J. INCOME TAXES                                                                 
Effective April 1, 1993 the Company adopted Statement of              
Financial Accounting Standards (SFAS) No. 109 "Accounting for                   
Income Taxes". Prior years' financial statements have not been                  
restated to apply the provisions of SFAS No. 109. The cumulative                
effect of adopting this standard resulted in an increase in net                 
earnings of $1,124,000 or $.01 per share in the 1994 Consolidated               
Statement of Earnings. There was no cash flow impact.                           
SFAS No. 109 requires an asset and liability approach to              
accounting for income taxes. Deferred income tax assets and                     
liabilities reflect the future tax consequences of events                       
that have already been recognized in the financial statements or                
tax returns. Changes in enacted tax rates or laws will result in                
adjustments to the recorded tax asset or liabilities                            
in the period that the tax law is enacted.                                      

Income taxes consist of the following components: (in thousands)              
Year Ended March 31,            1994        1993        1992                    
Federal                                                                         
Current                       $11,888     $25,325     $10,927                 
Deferred                           61        (888)     (1,336)                
              11,949      24,437       9,591
State                                                                           
Current                     2,766       2,283         437             
Deferred                     (717)        --         --               
               2,049       2,283         437
Income taxes                   $13,998     $26,720     $10,028                  

Pre-tax earnings               $87,065     $97,341     $50,142                  

Effective tax rate                16.1%       27.4%       20.0%                 

A reconciliation of the statutory tax rate to the effective tax               
rate is as follows:                                                             
Year Ended March 31,              1994        1993        1992                  
Statutory tax rate                35.0%       34.0%       34.0%                 
State income taxes--net            1.7%        1.5%        0.6%                 
Tax exempt earnings--                                                           
primarily dividend exclusion (7.7%)      (5.9%)     (10.1%)           
Tax credits                       (7.6%)      (2.2%)     (4.7%)                 
SFAS 109                          (1.3%)        --        --                    
Changes in tax code               (3.7%)        --        --                    
Other items                       (0.3%)        --        0.2%                  
Income taxes                      16.1%       27.4%      20.0%                  
Tax credits result principally from operations in Puerto Rico.                  

The sources of deferred income taxes are summarized as follows:               
(in thousands)                                                                  
Year Ended March 31,                 1993        1992                           
Earnings of Somerset                $ 430       $  (674)                        
Depreciation and amortization         (74)          (73)                        
Asset valuation allowances           (778)         (300)                        
Deferred compensation                (514)         (433)                        
Other items                            48           144                         
            $(888)      $(1,336)
Temporary differences and carryforwards which give rise to the                  
deferred income tax assets and liabilities are as follows: (in                  
thousands)                                                                      
March 31,                                        1994                           
Deferred Tax Assets:                                                            
Employee benefits                          $1,745                     
Deferred revenue                              868                     
Asset allowances                            1,279                     
Inventory                                     829                     
Investments                                 1,022                     
Total Deferred Tax Assets                        5,743                          
Deferred Tax Liabilities:                                                       
Property                                    3,379                     
Investments                                 1,103                     
Total Deferred Tax Liabilities                   4,482                          
Deferred Tax Assets--Net                        $1,261                          
Classification in the Consolidated Balance Sheet:                               
Deferred Income Tax Benefit--Current       $2,082                     
Deferred Income Tax Liability--Non-Current   (821)                    
Deferred Tax Assets--Net                        $1,261                          

In August of 1993, President Clinton signed into law the              
Omnibus Budget Reconciliation Act of 1993 ("the Act"). The Act                  
has several provisions which affect the Company's income tax                    
expense including a change in the federal corporate tax rate and                
significant changes relating to tax credits for operations in                   
Puerto Rico. As a direct result of the changes in the tax code,                 
the Company reassessed its position on the filing alternatives                  
available under the tax code. Based on the new tax code                         
provisions, the Company made a decision which resulted in a                     
reduction of income tax expense of $3,225,000. This amount                      
represents management's estimate of the cumulative effect of this               
change.                                                                         

K. Common Stock                                                                 
During fiscal year 1993 the Company declared a 2 for 1 stock          
split effected in the form of a stock dividend. The par value of                
the new shares issued totaled $19,327,000 and has been                          
transferred from additional paid-in capital and retained earnings               
to the common stock account. Per share amounts and stock options                
have been adjusted for the stock split.                                         
On April 7, 1993, the shareholders of the Company approved            
an increase in the number of shares of common stock authorized to               
300,000,000.                                                                    

L. Stock Option Plans                                                           
On December 1, 1986 the Board of Directors adopted the                
"Mylan Laboratories Inc. 1986 Incentive Stock Option Plan" ("the                
Plan") which was approved by the Shareholders on June 24, 1987. A               
total of 6,000,000 shares of the Company's common stock are                     
reserved for issuance upon exercise of stock options. Options,                  
which may be granted at not less than fair market value on the                  
date of the grant may be exercised within ten years from                        
the date of grant. As of March 31, 1994, options for 2,770,300                  
shares have been granted pursuant to the Plan.                                  
In connection with the October 30, 1991 business combination                  
with Hickam, all unexercised options granted pursuant to various                
Hickam option plans were converted to options to acquire the                    
Company's common stock at a conversion rate of .85524 Mylan                     
option shares for each Hickam option outstanding. A total of                    
535,124 shares of the Company's common stock were reserved for                  
issuance pursuant to the Hickam plans as of the October 30, 1991                
(date of conversion).                                                           

On June 23, 1992 the Board of Directors adopted the "1992             
Nonemployee Director Stock Option Plan"(the"Directors' Plan")                   
subject to shareholder approval, which was obtained on April 7,                 
1993. A total of 400,000 shares of the Company's common stock are               
reserved for issuance upon exercise of stock options which may be               
granted at not less than fair market value on the date of grant.                
Shares are granted, based on a formula as described in the                      
Directors' Plan, upon the nonemployee director's initial and                    
subsequent election to the Board of Directors. Options may be                   
exercised within ten years from the date of grant. As of March                  
31, 1994, 166,000 shares have been granted pursuant to the                      
Directors' Plan.                                                                
As of March 31, 1994 options for 1,311,179 shares are                 
exercisable under all plans at option prices ranging from $4.24                 
to $28.125 per share.                                                           
A summary of the activity resulting from all plans adjusted for               
the stock split  is as follows:                                                 
Number of shares under option     Option price per share      
Outstanding                                                                     
April 1, 1991                       1,362,660   $   4.125--8.915                
Options granted                  254,460       5.555--16.00           
Options exercised               (496,616)      4.125--8.915           
Outstanding                                                                     
March 31, 1992                      1,120,504   $   4.125--16.00                
Options granted                1,778,000      18.00                   
Options exercised               (713,857)      4.125--18.00           
Options cancelled or surrendered (64,398)      4.75--16.00            
Outstanding                                                                     
March 31, 1993                      2,120,249   $   4.125--18.00                
Options granted                    6,000      26.125--28.125          
Options exercised               (347,747)      4.125--18.00           
Options cancelled or surrendered  (6,875)             16.00           
Outstanding                                                                     
March 31, 1994                      1,771,627   $   4.24--28.125                

M. Profit Sharing and 401(k) Plans                                              
The Company has a noncontributory trusteed profit sharing             
plan covering essentially all employees who are not covered by                  
401(k) plans, a 401(k) plan covering essentially all Hickam                     
employees; a profit sharing plan with a 401(k) provision covering               
all employees of Bertek; and a  401(k) plan covering all                        
employees of the bargaining unit.                                               
Contributions to the profit sharing plan and the Bertek plan          
are made at the discretion of the Board of Directors.                           
Contributions to the Hickam plan are based upon a formula                       
matching the employees salary deferral. Contributions to the                    
bargaining unit plan are based upon the union agreement. Total                  
contributions to all plans for the years ended March 31, 1994,                  
1993 and 1992 were $2,300,000, $1,860,000 and $1,315,000                        
respectively.                                                                   

N. Related Party Transactions                                                   
Pursuant to a salary continuation agreement between Mr.               
McKnight, former Chairman and Chief Executive Officer, and the                  
Company, a one time payment of $4,306,000 was made on March 31,                 
1994 of which $2,861,000 was expensed during 1994. The Company                  
also purchased aircraft, which it previously leased on a flight                 
by flight basis, from the estate of Mr. McKnight for $5,900,000.                
In addition, the Company will continue to fund life insurance                   
premiums pursuant to a split-dollar life insurance agreement                    
whereby the Company has rights to the cash surrender value of the               
insurance policies.                                                             

O. Legal Matters                                                                
The Company is involved in various claims, principally                
intellectual property and product liability cases, that are                     
considered normal to its business. While it is not feasible to                  
predict the ultimate outcome of such proceedings it is the                      
opinion of management that the outcome will have no material                    
adverse effect on the Company's operations or financial position.               
During fiscal 1994 the Company settled certain legal matters          
relating to the Company's suit filed under the Federal Antitrust                
Laws and the Racketeer Influence and Corrupt Organization Act                   
(RICO), and received approximately $3,375,000. Additionally                     
during fiscal 1994 the jury in the Company's lawsuit against                    
American Cyanamid ruled in favor of Cyanamid on the Company's                   
complaint and in favor of the Company on Cyanamid's                             
counterclaims. No money damages were awarded to either party.                   
Each party has given notice of appeal to the U.S. Court of                      
Appeals for the Fourth Circuit.                                                 

(auditor's report40)                                                            

Independent Auditors' Report                                                    

Board of Directors and Shareholders                                             
Mylan Laboratories Inc.                                                         
Pittsburgh, Pennsylvania                                                        

We have audited the accompanying consolidated balance sheets of                 
Mylan Laboratories Inc. and subsidiaries as of March 31, 1994 and               
1993, and the related consolidated statements of earnings,                      
shareholders' equity, and cash flows for each of the three years                
in the period ended March 31, 1994, appearing on pages 28 through               
39. These financial statements are the responsibility of the                    
Company's management. Our responsibility is to express an opinion               
on these financial statements based on our audits.                              
We conducted our audits in accordance with generally accepted                   
auditing standards. Those standards require that we plan and                    
perform the audit to obtain reasonable assurance about whether                  
the financial statements are free of material misstatement. An                  
audit includes examining, on a test basis, evidence supporting                  
the amounts and disclosures in the financial statements. An audit               
also includes assessing the accounting principles used and                      
significant estimates made by management, as well as evaluating                 
the overall financial statement presentation. We believe that our               
audits provide a reasonable basis for our opinion.                              
In our opinion, such consolidated financial statements present                  
fairly, in all material respects, the financial position of Mylan               
Laboratories Inc. and subsidiaries as of March 31, 1994 and 1993,               
and the results of their operations and their cash flows for each               
of the three years in the period ended March 31, 1994, in                       
conformity with generally accepted accounting principles.                       

Pittsburgh, Pennsylvania                                                        
April 22, 1994                                                                  

Market Prices                                                                   
Fiscal 1994              High           Low                                     
First Quarter            30 3/4         23 5/8                                  
Second Quarter           30 3/8         19 5/8                                  
Third Quarter            33 1/4         23 1/2                                  
Fourth Quarter           25 1/8         15 7/8                                  
Fiscal 1993              High           Low                                     
First Quarter            19 3/4         16 7/8                                  
Second Quarter           27 1/2         19 3/8                                  
Third Quarter            31 7/8         24                                      
Fourth Quarter           37 5/8         23 3/4                                  
New York Stock Exchange Symbol: MYL                                             
On April 30, 1994 the Company had approximately 83,637                          
shareholders.                                                                   

Quarterly Financial Data                                                        
(Amounts in thousands, except per share amounts)                                
1st Quarter              1994           1993                                    
Net sales                $  58,507      $  38,838                               
Gross profit                29,952         19,573                               
Net earnings                16,108         11,353                               
Earnings per share             .21            .14                               

2nd Quarter                                                                     
Net sales                $  57,756      $  51,020                               
Gross profit                27,848         29,854                               
Net earnings                17,442         16,707                               
Earnings per share             .22            .22                               

3rd Quarter                                                                     
Net sales                $  66,436      $  61,108                               
Gross profit                34,271         36,619                               
Net earnings                22,123         21,175                               
Earnings per share             .28            .28                               

4th Quarter                                                                     
Net sales                $  69,074      $  60,998                               
Gross profit                34,071         36,518                               
Net earnings                17,394         21,386                               
Earnings per share             .22            .28                               

Year                                                                            
Net sales                 $251,773      $ 211,964                               
Gross profit               126,142        122,564                               
Net earnings                73,067         70,621                               
Earnings per share             .93            .92                               

Notice of Annual Meeting                                                        
The annual meeting of shareholders of the Company will be held on               
Wednesday, June 29, 1994 at 10:30 AM at the Lakeview Resort &                   
Conference Center, Morgantown, West Virginia. A formal notice                   
together with a proxy statement and form of proxy will be mailed                
to shareholders entitled to vote in advance of the meeting.                     

Shareholder Information                                                         
A copy of the Mylan Laboratories Inc. Annual Report to the                      
Securities and Exchange Commission on Form 10-K is available to                 
shareholders on request. For a copy of Form 10-K, please write                  
to:                                                                             
Mylan Laboratories Inc.                                                         
1030 Century Building                                                           
130 Seventh Street                                                              
Pittsburgh, Pennsylvania 15222                                                  
Shareholder Contact                                                             
Patricia Sunseri                                                                
(412) 232-0100                                                                  

Directors                                                                       
Milan Puskar                                                                    
Chairman of the Board, C.E.O. and                                               
President of the Company                                                        

Dana G. Barnett                                                                 
Executive Vice President of the Company                                         

Laurence S. DeLynn                                                              
Retail Consultant                                                               
Morgantown, West Virginia                                                       

John C. Gaisford, M.D.                                                          
Director of Burn Research                                                       
West Penn Hospital                                                              
Pittsburgh, Pennsylvania                                                        

Richard A. Graciano                                                             
Associate/Partner                                                               
Graciano Enterprises                                                            
Pittsburgh, Pennsylvania                                                        

Robert W. Smiley, Esq.                                                          
Doepken, Keevican, Weiss & Medved                                               
Attorneys-At-Law                                                                
Pittsburgh, Pennsylvania                                                        

C. B. Todd                                                                      
Senior Vice President of the Company                                            

Officers                                                                        
Milan Puskar                                                                    
Chairman, C.E.O. and President                                                  

Dana G. Barnett                                                                 
Executive Vice President                                                        

Louis J. DeBone                                                                 
Vice President--Operations                                                      

Roderick P. Jackson                                                             
Senior Vice President                                                           

Joseph J. Krivulka                                                              
Vice President                                                                  

Dr. John P. O'Donnell                                                           
Vice President--Research and                                                    
Quality Control                                                                 

Robert W. Smiley, Esq.                                                          
Secretary                                                                       

Patricia Sunseri                                                                
Vice President--Investor and Public Relations                                   

C. B. Todd                                                                      
Senior Vice President                                                           

Corporate Directory                                                             

Mylan Laboratories Inc.                                                         
1030 Century Building                                                           
130 Seventh Street                                                              
Pittsburgh, Pennsylvania 15222                                                  
(412) 232-0100                                                                  

Registrar and Transfer Agent                                                    
American Stock Transfer Co.                                                     
New York, New York                                                              

Certified Public Accountants                                                    
Deloitte & Touche                                                               
Pittsburgh, Pennsylvania                                                        

Financial Consultants                                                           
PDA Associates, Inc.                                                            
Ironia, NJ                                                                      

Securities Traded                                                               
New York Stock Exchange                                                         
Mylan Laboratories Inc.                                                         
Common Stock                                                                    
MYL                                                                             

Mylan Laboratories Inc.                                                         
1030 Century Building                                                           
130 Seventh Street                                                              
Pittsburgh, Pennsylvania 15222                                                  

(22) Subsidiaries of the registrant, filed herewith.                  

EXHIBIT 22

Subsidiaries

Name                                 State of Incorporation                     
----                                 ----------------------                     

Milan Holding, Inc.                         Delaware                            

Mylan Inc.                                  Delaware                            

Mylan Pharmaceuticals Inc.                  West Virginia                       

Dow Hickam Pharmaceuticals, Inc.            Texas                               

Bertek, Inc.                                West Virginia                       

(24) Consents of Independent Auditors', filed herewith.               

EXHIBIT 24      

Independent Auditors' Consent     

We consent to the incorporation by reference in Registration                    
Statement No. 33-65916 and No. 33-65918 of Mylan Laboratories                   
Inc. on Form S-8 of our reports dated April 22, 1994,                           
incorporated by reference of appearing in this Annual Report on                 
Form 10-K of Mylan Laboratories Inc. for the year ended March 31,               
1994.                                                                           

Deloitte & Touche                                                               

Pittsburgh, Pennsylvania                                                        
June 7, 1994                                                                    

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EXHIBIT 24      

Independent Auditors' Consent     

We consent to the incorporation by reference in Registration                    
Statement No. 33-65916 and No. 33-65918 of Mylan Laboratories                   
Inc. on Form S-8 of our report dated February 4, 1994, on the                   
audit of the consolidated financial statements of Somerset                      
Pharmaceuticals, Inc. and subsidiaries for the three years in the               
period ended December 31, 1993, included as an exhibit to the                   
Annual Report on Form 10-K of Mylan Laboratories Inc. for the                   
year ended March 31, 1994.                                                      

Deloitte & Touche                                                               

Pittsburgh, Pennsylvania                                                        

(28) Consolidated financial statements of Somerset                    
Pharmaceuticals, Inc. for Years ended December 31, 1993, 1992 and               
1991, filed herewith.                                                           

SOMERSET PHARMACEUTICALS, INC. AND SUBSIDIARIES                                 

Consolidated Financial Statements for the                                       
Years Ended December 31, 1993, 1992 and 1991, and                               
Independent Auditors' Report                                                    

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INDEPENDENT AUDITORS' REPORT                                                    
To the Board of Directors of                                                    
Somerset Pharmaceuticals, Inc.:                                       

We have audited the accompanying consolidated balance sheets of                 
Somerset Pharmaceuticals, Inc. and subsidiaries as of December                  
31, 1993 and 1992, and the related consolidated statements of                   
income, stockholders' equity, and cash flows for each of the                    
three years in the period ended December 31, 1993.  These                       
financial statements are the responsibility of the Company's                    
management.  Our responsibility is to express an opinion on these               
financial statements based on our audits.                                       

We conducted our audits in accordance with generally accepted                   
auditing standards.  Those standards require that we plan and                   
perform the audit to obtain reasonable assurance about whether                  
the financial statements are free of material misstatement.  An                 
audit includes examining, on a test basis, evidence supporting                  
the amounts and disclosures in the financial statements.  An                    
audit also includes assessing the accounting principles used and                
significant estimates made by management, as well as evaluating                 
the overall financial statement presentation.  We believe that                  
our audits provide a reasonable basis for our opinion.                          

In our opinion, such consolidated financial statements present                  
fairly, in all material respects, the financial position of                     
Somerset Pharmaceuticals, Inc. and subsidiaries as of December                  
31, 1993 and 1992, and the results of their operations and their                
cash flows for each of the three years in the period ended                      
December 31, 1993 in conformity with generally accepted                         
accounting principles.                                                          

February 4, 1994                                                                

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SOMERSET PHARMACEUTICALS, INC. AND SUBSIDIARIES                                 

CONSOLIDATED BALANCE SHEETS                                                     
DECEMBER 31, 1993 AND 1992                                                      

                                                                [Download Table]


ASSETS                                       1993           1992       

                                                                       
CURRENT ASSETS:                                                        
 Cash and cash equivalents                   $10,281,000    $6,141,000 
 Investment securities                         3,470,000     5,476,000 

Accounts receivable (net of allowance for doubtful                     
 accounts of $100,000)                        16,095,000    14,223,000 
Inventory                                      3,820,000     2,242,000 
Prepaid expenses and other current assets      1,582,000     1,934,000 
                                              ----------    ---------- 
Total Current Assets                          35,248,000    30,016,000 

PROPERTY AND EQUIPMENT -Net                    2,762,000       164,000 

Intangible Assets-Net                          1,987,000     2,180,000 

OTHER ASSETS                                   1,416,000       348,000 
                                             $41,413,000   $32,708,000 
                                             ===========   =========== 

LIABILITIES AND STOCKHOLDERS' EQUITY         1993           1992       

CURRENT LIABILITIES                                                    
 Accounts Payable                            $   205,000    $  432,000 
 Note payable                                    253,000        -      
 Royalty Payable                               4,780,000     4,590,000 
 Accrued Marketing Costs                       9,100,000     7,714,000 
 Other accrued expenses                        4,116,000     2,934,000 
 Income Taxes Payable                          2,900,000     2,330,000 
 Amounts due to related parties                2,063,000    10,585,000 
                                             -----------   ----------- 
  Total Current Liabilities                   23,417,000    28,585,000 

DEFERRED REVENUE                                 458,000       625,000 

REDEEMABLE PREFERRED STOCK:                                            
 CLASS A                                          -            556,000 
 CLASS B                                          -            754,000 

STOCKHOLDERS' EQUITY                                                   
 Common Stock, $.01 par value, 13,719                                  
 shares authorized, 11,297  shares issued         -               -    
 Retained Earnings                            17,990,000     2,640,000 
 Less treasury stock, 644 shares at cost        (452,000)     (452,000)
                                             -----------   ------------
  Total Stockholders' Equity                  17,538,000     2,188,000 
                                             -----------   ------------
                                             $41,413,000   $32,708,000 
                                             ===========   =========== 


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                  

SOMERSET PHARMACEUTICALS, INC. AND SUBSIDIARIES                                 

CONSOLIDATED STATEMENTS OF INCOME                                               
YEARS ENDED DECEMBER 31,1993,1992 AND 1991                                      

                                                                [Download Table]

                                   1993           1992          1991        

                                                                            
NET SALES                          $118,998,000   $104,071,000  $ 85,057,000
                                   ------------   ------------  ------------

COST AND EXPENSES:                                                          
 Cost of sales                       13,991,000     12,552,000    11,603,000
 Marketing and Administrative        33,826,000     30,151,000    22,786,000
 Research and Development             9,134,000      5,580,000     2,851,000
 Interest Expense                         5,000         -            -      
                                   ------------   ------------  ------------

                                     56,956,000     48,283,000    37,240,000
                                   ------------   ------------  ------------
                                     62,042,000     55,788,000    47,817,000

OTHER INCOME                          1,131,000      1,017,000     1,128,000
                                   ------------   ------------  ------------
INCOME BEFORE INCOME TAXES           63,173,000     56,805,000    48,945,000

PROVISION FOR INCOME TAXES           21,408,000     20,736,000    17,865,000
                                   ------------   ------------  ------------
NET INCOME                         $ 41,765,000   $ 36,069,000  $ 31,080,000


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                  

SOMERSET PHARMACEUTICALS, INC. AND SUBSIDIARIES                                 

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY                                  
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991                                   

                                                        [Enlarge/Download Table]


                               COMMON STOCK    TREASURY STOCK                                
   RETAINED       STOCKHOLDERS'                                                              
                              SHARES  AMOUNT    SHARES   AMOUNT    EARNINGS         EQUITY   
                                                                                             
BALANCE, DECEMBER 31,1990     11,297   $ -     644     $(452,000)  $ 6,392,000   $ 5,940,000 

Accretion of the carrying                                                                    
value of the redeemable                                                                      
preferred stock                 -        -      -          -          (365,000)    (365,000) 
Dividends                       -        -      -          -       (29,207,000)  (29,207,000)
Net Income                      -        -      -          -        31,080,000    31,080,000 
                              --------  ---  -------  -----------  ------------  ------------

BALANCE, DECEMBER 31,1991     11,297     -     644      (452,000)    7,900,000      7,448,000

Accretion of the carrying                                                                    
value of the redeemable                                                                      
preferred stock                 -        -      -          -          (122,000)    (122,000) 
Dividends                       -        -      -          -       (41,207,000)  (41,207,000)
Net Income                      -        -      -          -        36,069,000    36,069,000 
                              --------  ---  -------  -----------  ------------  ------------

BALANCE, DECEMBER 31,1992     11,297     -     644      (452,000)    2,640,000     2,188,000 

Accretion of the carrying                                                                    
value of the redeemable                                                                      
preferred stock                 -        -      -          -           (15,000)      (15,000)
Dividends                       -        -      -          -       (26,400,000)  (26,400,000)
Net Income                      -        -      -          -        41,765,000    41,765,000 
                              --------  ---  -------  -----------  ------------  ------------

BALANCE, DECEMBER 31,1993     11,297   $ -     644    $ (452,000)  $17,990,000   $17,538,000 
                              ========  ===  =======  ===========  ============  ============


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.                                 

SOMERSET PHARMACEUTICALS, INC. AND SUBSIDIARIES                                 

CONSOLIDATED STATEMENTS OF CASH FLOWS                                           
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991                                    

                                                        [Enlarge/Download Table]

                                                1993         1992        1991        

                                                                                     
CASH FLOWS FROM OPERATING ACTIVITIES:                                                
 Net income                                     $41,765,000  $36,069,000 $31,080,000 
 Adjustments to reconsile net income to net cash                                     
 provided by operating activities:                                                   
  Depreciation and amortization                     285,000      229,000     217,000 
  Deferred tax expense (benefit)                   (800,000)      20,000      14,000 
  Deferred revenue                                 (167,000)   (166,000)    (167,000)
 Changes in Operating assets and liabilities:                                        
  Accounts receivable                            (1,872,000) (3,989,000)  (3,177,000)
  Inventory                                      (1,578,000)    614,000   (1,025,000)
  Prepaid expenses and other current assets         352,000    (249,000)     743,000 
  Accounts Payable                                 (227,000) (1,121,000)    (133,000)
  Royalty Payment                                   190,000      901,000     528,000 
  Accrued Marketing costs                         1,386,000    2,074,000   3,204,000 
  Other accrued expenses                          1,182,000    1,338,000     854,000 
  Income taxes payable                              570,000    (177,000)   3,397,000 
  Amounts due to related parties                    278,000      542,000  (5,860,000)
                                                 ----------   ----------  ---------- 
Net cash provided by operating activities        41,364,000   36,085,000  29,675,000 

CASH FLOWS FROM INVESTING ACTIVITIES:                                                
 Net (increase) decrease in investment securities                                    
                                                  2,006,000  (1,685,000)   5,585,000 
 Purchase of property and equipment              (2,690,000)   (127,000)     (14,000)
 Purchase of intangible assets                        -              -      (150,000)
 (Increase) decrease in other assets               (268,000)     23,000      (16,000)
                                                  ----------    ---------   ---------
Net cash (used in) provided by investing activities                                  
                                                   (952,000) (1,789,000)   5,405,000 
                                                  ----------    ---------   ---------


SOMERSET PHARMACEUTICALS, INC. AND SUBSIDIARIES                                 

CONSOLIDATED STATEMENTS OF CASH FLOWS                                           
YEARS ENDED DECEMBER 31, 1993,1992 AND 1991                                     

                                                                [Download Table]


                                          1993         1992          1991       
                                                                                
CASH FLOWS FROM FINANCING ACTIVITIES:                                           
 Redemption of preferred stock         $(1,149,000)  $(1,149,000)  $(1,241,000) 
 Dividends paid on preferred stock        (176,000)      (85,000)     (183,000) 
 Dividends paid on note payable        (35,200,000)  (36,300,000)   (29,000,000)
 Borrowings on note payable                253,000         -             -      
                                       -----------    -----------  -----------  
Net cash used in financing activities  (36,272,000)  (37,534,000)   (30,424,000)

NET INCREASE (DECREASE) IN CASH                                                 
AND CASH EQUIVALENTS                     4,140,000    (3,238,000)     4,656,000 

CASH AND CASH EQUIVALENTS,                                                      
BEGINNING OF YEAR                        6,141,000     9,379,000      4,723,000 
                                       -----------     ----------   ----------- 

CASH AND CASH EQUIVALENTS,                                                      
END OF YEAR                            $10,281,000   $ 6,141,000    $ 9,379,000 
                                       ===========   ===========    =========== 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW                                           
INFORMATION                                                                     
  Cash paid during the year for:                                                
  Interest                             $     5,000   $     -        $     -     
                                       ===========   ===========    =========== 

  Income taxes                         $21,259,000   $20,992,000    $14,454,000 


SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:                        

During 1992 and 1991, the Company recorded $8,800,000 and $4,000,000 of         
dividends payable on common stock which had not been paid as of                 
the end of the respective years.                                                

see notes to consolidated financial statements.                                 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                      
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991                                    

1.   PRINCIPLES OF CONSOLIDATION AND OPERATIONS                                 

The consolidated financial statements include the accounts            
of Somerset Pharmaceuticals, Inc. (the Company) and its wholly owned            
subsidiaries, Somerset Pharmaceuticals Holding Company and Somerset Caribe, Inc.
The Company is jointly owned by Mylan Laboratories, Inc. and Circa              
Pharmaceuticals, Inc., with each owning 50% of all the outstanding capital stock
of the Company.                                                                 
Significant intercompany accounts and transactions have been                    
eliminated in consolidation.  The Company, incorporated in February 1986, is    
engaged in the development, testing and marketing of drugs to be used in the    
treatment of various human disorders.  Currently, the Company markets and       
sells Eldepryl, which is used as a treatment for Parkinson's Disease.           

The Company is party to an exclusive 14-year agreement                
(through November 22, 2003) with Chinoin Pharmaceutical Company (Chinoin) of    
Budapest, Hungary under which Eldepryl and other new potential drugs            
resulting from Chinoin research are made available for licensing by the         
Company.  The license agreement requires the Company to pay royalties equal to  
7% of net sales of Eldepryl including sub-license revenues.  The Company        
incurred royalty expense of approximately $9,224,000, $8,105,000 and $5,843,000 
for the years ended December 31, 1993, 1992 and 1991, respectively.             

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                 

a.   Cash and Cash Equivalents -The Company generally considers                 
debt instruments purchased with a maturity of three months or less to           
be cash equivalents.  Included in cash and cash equivalents at December         
31, 1993 is approximately $1.5 million that is held as collateral against the   
Company's line of credit (see Note 7).                                          

b.   Investment Securities -Investment securities include both                  
long and short-term debt and equity instruments.  These securities are          
classified as current and are valued at the lower of cost or market.  At        
December 31, 1993 and 1992, cost approximated market.                           

In May 1993, the Financial Accounting Standards Board issued          
Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for     
Certain Investments in Debt and Equity Securities".  The Company will be        
required to adopt this new standard in 1994.  Management believes that the      
adoption of this new accounting standard will not have a material effect on the 
Company's financial position or results of operations.                          

c.   Inventory - Inventory is stated at the lower of cost or                    
market, with cost determined on a first-in, first-out basis.                    

d.   Property and Equipment -Property and equipment are stated at               
cost. Depreciation is provided over the estimated useful lives of the           
assets by thestraight-line method.  Estimated useful lives are five to seven    
years for machinery and equipment and thirty-five years for the building.       

e.   Intangible Assets -Intangible assets are amortized on a                    
straight-line basis over 14 years.                                              

f.   Research and Development -Research and development costs are               
expensed as incurred.                                                           

3.   INVENTORY                                                                  

Inventory consists of the following at December 31:                   

                            1993              1992

Raw material                           $ 2,864,000       $     -                
Work in process                            470,000             -                
Finished goods                             486,000        2,242,000             
                            -----------       ------------
Total                                  $ 3,820,000       $2,242,000             
                           ===========       ===========

4.   PROPERTY AND EQUIPMENT                                                     

Property and equipment consists of the following at December 31:      

                            1993              1992

Land                                   $   300,000       $     -                
Building                                 1,638,000             -                
Machinery and Equipment                    963,000           58,000             
Furniture and Fixtures                      65,000          218,000             
                          -----------      -----------
                        2,966,000      276,000
Less accumulated depreciation             (204,000)     (112,000)               
                          -----------      -----------

Property and equipment - net           $ 2,762,000       $  164,000             

5.   SUB-LICENSE OF RIGHTS                                                      

On February 9, 1988, the Company granted a sub-license to             
its exclusiveright and license to use its technology to Deprenyl Research       
Limited (Deprenyl) to commercialize certain drugs in Canada for 15 years.  The  
Company receives a royalty of 11% of Deprenyl's net sales over the license      
period.                                                                         

Royalty income, less related royalty expense to Chinoin,              
included in other income for the years ended December 31, 1993, 1992 and 1991   
wasapproximately $357,000, $414,000 and $484,000, respectively.                 

6.   INTANGIBLE ASSETS                                                          

Intangible assets primarily represent the cost of a                   
modification to the terms of the Chinoin Agreement, less accumulated            
amortization of $868,000 and $704,000 at December 31, 1993 and 1992,            
respectively.                                                                   

7.   NOTE PAYABLE                                                               

On June 30, 1993, the Company entered into a one-year                 
$1,500,000 line of credit agreement with a bank in conjunction with the         
renovationof the Company's research facility.  Interest on amounts drawn on the 
line of credit is payable monthly at the bank's prime rate less 0.25%.  The     
bank's prime rate was 6.0% at December 31, 1993.  Principal is due in full at   
maturity.  The line of credit is collateralized by $1,500,000 of cash and cash  
equivalents held by the bank.  At December 31, 1993, the outstanding balance    
on the line of credit was $253,000.                                           

8.   CO-PROMOTIONAL AGREEMENT                                                   

Effective October 1, 1990, the Company entered into an                
agreement with Sandoz Pharmaceuticals Corporation (Sandoz) to co-promote the    
product Eldepryl.                                                               
Under the terms of the agreement, the Company is required to make               
certain payments to Sandoz in the event sales of Eldepryl exceed certain        
predefined minimums.  The agreement requires Sandoz, among other things, to     
expend, at a minimum, a predetermined amount for advertising during each year   
of the agreement.  Once the predetermined levels of sales are exceeded,         
the Company is required to pay Sandoz for advertising expenditures made on      
behalf of the Company.  After Sandoz's advertising expenses are reimbursed, any 
additional amounts are shared by Sandoz and the Company based upon the terms    
of the agreement.  During 1993, 1992 and 1991, the Company expensed             
approximately $24,260,000, $22,321,000 and $15,600,000, respectively, pursuant  
to the agreement.  Additionally, certain co-promotional fees paid by            
Sandoz at the commencement of the agreement are being recognized ratably by the 
Company during the term of the agreement (six years), and certain costs         
associated with the procurement, negotiation and execution of the agreement by  
the owners of the Company are being incurred by the Company in approximately    
the same amount.                                                                

9.   REDEEMABLE PREFERRED STOCK                                                 

The Class A and B redeemable preferred stock were fully               
redeemed during1993.                                                            

The Class A stock, ($.10 par value, 1,950 shares authorized           
and 488 shares outstanding at December 31, 1992) was carried at redemption value
plus undeclared dividends.  Undeclared dividends in arrears on the              
cumulative Class A stock outstanding totaled approximately $68,000 or $139 per  
share at December 31, 1992.                                                     

The Class B stock ($.10 par value, 2,850 shares authorized            
and issued and 661 shares outstanding at December 31, 1992) was convertible into
common stock based on a conversion price set by the Board of Directors and      
subject to adjustment from time to time.  Undeclared dividends in arrears on    
the cumulative Class B stock outstanding totaled approximately                  
$92,000 or $139 pershare at December 31, 1992.                                  

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10.  INCOME TAXES                                                               

The Company adopted Statement of Financial Accounting                 
Standards (SFAS) No.109, "Accounting for Income Taxes" effective January 1,     
1993.  As permitted by SFAS No. 109, prior-year financial statements have not   
been restated to reflect the change in accounting method.  The cumulative       
effect ofadopting SFAS No.109 on the Company's financial statements was not     
material.                                                                       

The income tax provision consists of the following for the            
years ended December 31:                                                        

                                                                [Download Table]

                                   1993          1992         1991       
                                                                         
Current tax expense:                                                     
     Federal                       $17,938,000   $18,540,000  $14,897,000
     State                           4,124,000     2,050,000    2,850,000
     Foreign                           146,000       126,000      104,000
                                   -----------   -----------  -----------
                                    22,208,000    20,716,000   17,851,000

Deferred tax expense (benefit):                                          
     Federal                          (700,000)       20,000       12,000
     State                            (100,000)        -            2,000
                                   -----------   -----------  -----------

                                      (800,000)       20,000       14,000
                                   -----------   -----------  -----------

Total provision for income taxes   $21,408,000   $20,736,000  $17,865,000
                                   ===========   ===========  ===========

Deferred income taxes reflect the net tax effects of                  
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.      
The taxeffects of significant items comprising the Company's deferred taxes     
(which are included in "Other Assets" in the balance sheet) as of December 31,  
1993 are as follows:                                                            

                                                1993

Deferred Tax Assets:                                                            
Deferred revenue                                          $  172,000  
Tax basis inventory adjustment                               871,000  
Chargeback allowance                                         229,000  
Capitalization of overhead cost to inventory                  53,000  
Other                                                         37,000  
                                                       -----------
                                                     1,362,000
                                                       -----------
Deferred Tax Liabilities:                                                       
Excess of tax amortization over reporting amortization      (133,000) 
                                                       -----------
   Net Deferred Tax Asset                               $1,229,000
                                                       ===========

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The statutory federal income tax rate is reconciled to the            
effective taxrate as follows for the years ended December 31:                   

                             1993       1992    1991

Tax at statutory rate                      35.0%      34.0%   34.0%             
State income tax (net of federal benefit)   4.1        2.4    3.8               
Tax credit                                 (7.2)       (.2)   (.2)              
Research and development credit              -          -     (.6)              
Other                                       2.0         .3    (.5)              
                              -----      -----   -----
Effective tax rate                         33.9%      36.5%   36.5%             

Tax credits result principally from operations in Puerto Rico.                  

11.  RELATED PARTY TRANSACTIONS                                                 

The Company incurs expenses for ongoing management services           
and over asix-year period for specific services related to the procurement,     
negotiation and execution of the co-promotion agreement by the owners of the    
Company.  Such expenses amounted to approximately $5,950,000, $5,204,000 and    
$4,253,000  forthe years ended December 31, 1993, 1992 and 1991, respectively.  
Additionally, the owners of the Company are also owners of a captive insurance  
company which provides product liability insurance to the Company.  Product     
liability insurance expense for the years ended December 31, 1993, 1992 and     
1991 was $675,000, $675,000 and $669,000, respectively.  The Company also       
incurs an inventory handling and distribution fee, payable to one of its        
owners.  Total handling and distribution fee expense for the years ended        
December 31, 1993, 1992 and 1991 was $750,000, $331,000 and $951,000,           
respectively. During 1993, the Company purchased $696,000 of equipment from and 
paid $647,000 in rent to one of the owners.  During 1993, 1992 and 1991, the    
Company incurred $835,000, $239,000 and $940,000, respectively, in expenses     
related to research and development activities performed by its owners.         

At December 31, 1993 and 1992, the balance of amounts due to          
related parties represents rent, research and development, distribution         
and management fees payable to the owners of the Company.  Additionally, the    
1992 balance included dividends.                                                

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12.  SIGNIFICANT CUSTOMERS                                                      

The Company had sales to certain customers which                      
individually exceeded 10% of net sales.  Two customers represented 45%, 41% and 
38% of net sales for the years ended December 31, 1993, 1992 and 1991,          
respectively.                                                                   

13.  COMMITMENTS                                                                

As of December 31, 1993, the Company is committed to fund             
approximately $3,800,000 for various research and development studies through   
1995.                                                                           

* * * * * *                           

SIGNATURES

Pursuant to the requirements of section 13 or 15(d) of the            
Securities Exchange Act of 1934, the registrant has duly caused                 
this Report to be signed on its behalf by the undersigned,                      
thereunto duly authorized.                                                      

Date:     June 7, 1994                  MYLAN LABORATORIES INC.                 

by  /s/ Milan Puskar                              
-------------------------                         
Milan Puskar                                      
Chairman, Chief Executive Officer and President   

Pursuant to the requirements of the Securities Exchange Act           
of 1934, this Report has been signed below by the following                     
persons on behalf of the registrant and in the capacities and on                
the dates indicated.                                                            

                                                        [Enlarge/Download Table]

                                                                                      
/s/ Milan Puskar June 7,1994                           /s/ Dana G. Barnett June 7,1994
-----------------------------          -------------------------------                
     Milan Puskar                          Dana G. Barnett                            
Chairman, Chief Executive Officer          Executive Vice President                   
and President                              and Director                               

/s/ Laurence S. DeLynn June 7,1994     /s/ Robert W. Smiley June 7,1994               
-----------------------------                                                         
    Laurence S. DeLynn                     Robert W. Smiley                           
    Director                               Secretary and Director                     

/s/ Richard A. Graciano June 7,1994   /s/ John C. Gaisford, M.D. June 7, 1994         
------------------------------        ---------------------------------------         
    Richard A. Graciano                   John C. Gaisford, M.D.                      
    Director                              Director                                    

/s/ C.B. Todd June 7,1994            /s/ Frank A. DeGeorge June 7,1994                
------------------------------       ---------------------------------                
    C.B. Todd                            Frank A. DeGeorge                            
    Senior Vice President                Director of Accounting and                   
    and Director                         and Taxation                                 


INDEPENDENT AUDITORS' REPORT      

Board of Directors and Shareholders                                             
Mylan Laboratories Inc.                                                         
Pittsburgh, Pennsylvania                                                        

We have audited the consolidated financial statements of Mylan                  
Laboratories Inc. and subsidiaries as of March 31, 1994 and 1993,               
and for each of the three years in the period ended March 31,                   
1994, and have issued our report thereon dated April 22, 1994;                  
such financial statements and report are included in your 1994                  
Annual Report to Shareholders and are incorporated herein by                    
reference.  Our audits also included the financial statement                    
schedules of Mylan Laboratories Inc. and subsidiaries, listed in                
the accompanying index at Item 14A.  These financial statement                  
schedules are the responsibility of the Company's management.                   
Our responsibility is to express an opinion based on our audits.                
In our opinion, such financial statement schedules, when                        
considered in relation to the basic consolidated financial                      
statements taken as a whole, present fairly in all material                     
respects the information set forth therein.                                     

Deloitte & Touche                                                               

Pittsburgh, Pennsylvania                                                        
April 22, 1994                                                                  

SCHEDULE I                                                                

                        MYLAN LABORATORIES INC. AND SUBSIDIARIES
                        MARKETABLE SECURITIES--OTHER INVESTMENTS

                                                        [Enlarge/Download Table]


  Column A                               Column B            Column C      Column D        Column E            

  --------                               --------            --------      --------        --------            

                                                                                           Amount at Which     
                                              Number                                       Each Portfolio of   
                                            of Shares                        Market Value   Equity Security    
                                            or Units,                        of Each         Issue and Each    
    Name of Issuer                          Principal                        Issue at      Other Security Issue
    and Title of                            Amount of         Cost of      BalanceSheet     Carried in the     
     Each Issue                            Bonds and Notes    Each Issue       Date          Balance Sheet     
     ----------                           ---------------     ----------        ----         -------------     
     March 31, 1994                                                                                            

                                                                                                               

Short Term Investments:                                                                                        
 Pharmaceutical Resources, Inc.                                                                                
  Common Stock . . . . . . . .                  111,111     $ 2,000,000   $   958,000       $   958,000        

Preferred Stock Closed-end Municipal Bond Funds:                                                               
 InterCapital. . . . . . . . .                       90       4,510,000     4,510,000         4,510,000        
 Van Kampen  . . . . . . . . .                       64       3,208,000     3,208,000         3,208,000        
 MuniVest  . . . . . . . . . .                       40       2,007,000     2,007,000         2,007,000        
 MuniYield . . . . . . . . . .                       40       2,000,000     2,000,000         2,000,000        
Other Assets:                                                                                                  
 American Triumvirate Insurance Co.                                                                            
  Common Stock . . . . . . . .                      150       3,333,000     7,713,000(1)      7,713,000        

Somerset Pharmaceuticals, Inc.                                                                                 
  Common Stock . . . . . . . . .                   5327      16,231,000    17,763,000(2)     17,763,000        
  Managed Funds (3) . .  . . . .                    N/A      10,104,000     8,904,000        10,104,000        

Government Development Bank for Puerto Rico                                                                    
Promissory Notes 1989 Series C                10,000,000     10,025,000    10,484,000        10,000,000        

Akers Laboratories Inc.                                                                                        
 Common Stock . . . . . .                      2,825,925      4,000,000     4,000,000         4,000,000        

Glenmark Associates Inc.                                                                                       
 Series B Preferred Stock  . .                       200      1,000,000     1,000,000         1,000,000        

Preferred Stock Closed-end Municipal Bond Funds:                                                               
 MuniYield. . . . . . . . . . . .                     40      2,000,000     2,000,000         2,000,000        


(1)  Represents Company's portion of investee's net worth.                      
(2)  Represents Company's portion of investee's net worth and unamortized       
intangible assets.                                                    
(3)  Represents primarily investments in pooled asset funds.                    

SCHEDULE II                                                                 

                       MYLAN LABORATORIES INC.AND SUBSIDIARIES
                         AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
                        UNDERWRITERS, PROMOTERS, AND EMPLOYEES
                        OTHER THAN RELATED PARTIES

                                                        [Enlarge/Download Table]


                                                                           Column E - Balance        
       Column A              Column B    Column C    Column D -Deductions       at end of period     
       --------              --------    --------    ---------------------      ----------------     
                             Balance at              Amounts     Amounts                   Not       
    Name of Debtor           of period    Additions   collected  written off      Current  Current   
    --------------           ---------    ---------   ---------  -----------      -------  -------   
                                                                                                     

March 31, 1994:                                                                                      

  McKnight Irrevocable Trust $854,000     $1,308,000      0          0                $0   $2,162,000

March 31, 1993:                                                                                      
McKnight Irrevocable Trust     -0-          $854,000      0          0             $854,000    0     


Note:  The amount above represents an unsecured advance issued in               
connection with a split dollar arrangement.                                     

SCHEDULE X                                                                

                        MYLAN LABORATORIES INC. AND SUBSIDIARIES

                        SUPPLEMENTARY INCOME STATEMENT INFORMATION

                                                        [Enlarge/Download Table]


             Column A                                          Column B                
            --------                                           --------                
                                                          Charged to Costs and Expenses
                                                             Year ended March 31,      
                                                            --------------------       
              Item                                                                     
              ----                                1994           1993           1992   
                                                  ----           ----           ----   
                                                                                       
Maintenance and Repairs ..............        $ 5,525,000    $3,339,000     $2,953,000 
Depreciation and Amortization of Intangibles  $11,318,000    $6,261,000     $5,060,000 
Advertising Costs.....................        $ 2,621,000        *              *      

        NOTE:  Other captions called for under Rule 12-11 did notexceed 1%             
               of net sales and accordingly, are not applicable.                       

            *  Less than 1% of Net Sales                                               

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                                   EXHIBIT 22                                          

                                  Subsidiaries                                         

Name                                 State of Incorporation                            
----                                 ----------------------                            

Milan Holding, Inc.                         Delaware                                   

Mylan Inc.                                  Delaware                                   

Mylan Pharmaceuticals Inc.                  West Virginia                              

Dow Hickam Pharmaceuticals, Inc.            Texas                                      

Bertek, Inc.                                West Virginia                              

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                                EXHIBIT 24                                             

                       Independent Auditors' Consent                                   

We consent to the incorporation by reference in Registration                           
Statement No. 33-65916 and No. 33-65918 of Mylan Laboratories Inc. on Form S-8         
of our reports dated April 22, 1994, incorporated by reference of appearing in         
this Annual Report on Form 10-K of Mylan Laboratories Inc. for the year ended          
March 31, 1994.                                                                        

Deloitte & Touche                                                                      

Pittsburgh, Pennsylvania                                                               
June 7, 1994                                                                           

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                                EXHIBIT 24                                             

                       Independent Auditors' Consent                                   

We consent to the incorporation by reference in Registration                           
Statement No. 33-65916 and No. 33-65918 of Mylan Laboratories Inc. on Form S-8         
of our report dated February 4, 1994, on the audit of the consolidated                 
financial statements of Somerset Pharmaceuticals, Inc. and subsidiaries for the        
three years in the period ended December 31, 1993, included as an exhibit to           
the Annual Report on Form 10-K of Mylan Laboratories Inc. for the year ended           
March 31, 1994.                                                                        

Deloitte & Touche                                                                      

Pittsburgh, Pennsylvania                                                               
June 7, 1994                                                                           

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 10-K Filing		Date		First		Last			Other Filings
		3/31/92		2		9
		4/1/92		5
		6/23/92		9
		6/30/92		5
		8/1/92		9
		10/1/92		5
		11/24/92		5
		12/10/92		5
		12/31/92		10		15
		1/1/93		13
		2/25/93		2		9
		3/31/93		2		15
		4/1/93		9
		4/7/93		9
		6/30/93		12
		11/6/93		9
		11/9/93		9
		11/16/93		9
		12/31/93		10		18			10-Q
		2/4/94		10		18
		2/7/94		9					10-Q
		3/28/94		9
For The Period Ended		3/31/94		1		18			DEF 14A
		4/22/94		9		17
		4/30/94		1		9
		6/7/94		9		18
Filed On / Filed As Of		6/14/94
		6/29/94		9
		4/1/99		5
		11/22/03		12
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