SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                                -----------------


                                   FORM 10-Q/A
                                  Amendment to

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



(Mark One)

     X     Quarterly report pursuant to Section 13 or 15(d) of the Securities
-----------Exchange Act of 1934



For the quarterly period ended June 30, 2002


                                       OR


             Transition report pursuant to Section 13 or 15 (d) of the
-------------Securities Exchange Act of 1934


Commission File Number:  000-19370


                         Curative Health Services, Inc.

            (Exact name of registrant as specified in its charter)



                 MINNESOTA                                41-1503914
        (State or other jurisdiction of                  (I.R.S. Employer
        incorporation or organization)               Identification Number)


                                150 Motor Parkway
                            Hauppauge, New York 11788
                                 (631) 232-7000

                   (Address of principal executive offices)


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



     Indicate  by check mark  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     X                                No
                ---------                               ---------



As of August 1, 2002, there were 11,659,094 shares of the Registrant's Common
Stock, $.01 par value, outstanding.
==============================================================================






                                      INDEX


Part I     Financial Information                                       Page No.
-------------------------------------------------------------------------------
Item 1     Financial Statements:

           Condensed Consolidated Statements of Operations
                Three and Six Months ended June 30, 2002 and 2001          3

           Condensed Consolidated Balance Sheets
                June 30, 2002 and December 31, 2001                        4

           Condensed Consolidated Statements of Cash Flows
                Six Months ended June 30, 2002 and 2001                    5

           Notes to Condensed Consolidated Financial Statements            6

Item 2     Management's Discussion and Analysis of Financial Condition
                and Results of Operations                                 11

Item 3     Quantitative and Qualitative Disclosures About Market Risk     16



Part II           Other Information                                    Page No.
-------------------------------------------------------------------------------

Item 1            Legal Proceedings                                       17

Item 2            Changes in Securities and Use of Proceeds               17

Item 4            Submission of Matters to a Vote of Security Holders     17

Item 5            Other Information                                       18

Item 6            Exhibits and Reports on Form 8-K                        18

                  Signatures                                              20







Part I.  Financial Information

Item 1. Financial Statements



                 Curative Health Services, Inc. and Subsidiaries
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)




                                                Three Months Ended          Six Months Ended
                                                      June 30,                  June 30,
                                                  2002       2001          2002       2001
                                               ---------------------    ---------------------
                                                                         
  Revenues:
    Services                                   $ 8,964      $12,281      $17,859      $25,798
    Products                                    22,956       11,690       36,825       11,690
                                               -------      -------      -------      -------
       Total revenues                           31,920       23,971       54,684       37,488

  Costs and operating expenses:
    Cost of services                             3,976        7,242        8,434       15,339
    Cost of product sales                       16,468        9,931       26,267        9,931
    Selling, general & administrative            6,610        6,633       11,533       11,762
                                               -------      -------      -------      -------
      Total costs and operating expenses        27,054       23,806       46,234       37,032
                                               -------      -------      -------      -------
  Income from operations                         4,866          165        8,450          456

  Interest income                                   17          154           53          711

  Interest expense                                 145            -          282            -
                                               -------      -------      -------      -------
  Income before taxes                            4,738          319        8,221        1,167
                                               -------      -------      -------      -------
  Income taxes                                   1,907          309        3,340          665
                                               -------      -------      -------      -------
  Net income                                   $ 2,831      $    10      $ 4,881      $   502
                                               =======      =======      =======      =======
  Net income per common share, basic           $  0.25      $  0.00      $  0.46      $  0.07
                                               =======      =======      =======      =======
  Net income per common share, diluted         $  0.23      $  0.00      $  0.42      $  0.07
                                               =======      =======      =======      =======
  Weighted average common shares, basic         11,536        7,116       10,582        7,119
                                               =======      =======      =======      =======
  Weighted average common shares, diluted       12,349        7,545       11,608        7,451
                                               =======      =======      =======      =======
  



                             See accompanying notes







                 Curative Health Services, Inc. and Subsidiaries
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)


                                             June 30, 2002   December 31, 2001
                                            ----------------------------------
                                             (Unaudited)


   ASSETS

      Cash and cash equivalents               $  2,120           $12,264
      Accounts receivable, net                  25,827            13,139
      Deferred tax assets                        6,711             6,265
      Inventory                                 11,581             4,547
      Prepaid and other current assets           2,730               745
                                              --------           -------
          Total current assets                  48,969            36,960

      Property and equipment, net                3,483             3,795
      Goodwill and intangibles                 106,114            34,787
      Other Assets                               6,146             1,385
                                              --------           -------

          Total assets                        $164,712           $76,927
                                              ========           =======

   LIABILITIES AND STOCKHOLDERS' EQUITY
    Accounts payable                          $ 16,500           $ 9,249
    Accrued expenses                            16,957            25,186
    Other current liability                      1,617                 -
                                              --------           -------
        Total current liabilities               35,074            34,435


    Long term liabilities                       26,055             6,000

    Stockholders' equity
      Common stock                                 115                75
      Additional paid in capital                96,188            34,019
      Retained earnings                          7,280             2,398
                                              --------           -------
        Total stockholders' equity             103,583            36,492

        Total liabilities and
        stockholders' equity                  $164,712           $76,927
                                              ========           =======









                             See accompanying notes






                 Curative Health Services, Inc. and Subsidiaries
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)




                                                                                  Six Months Ended June 30,
                                                                                     2002         2001
                                                                                  -------------------------
                                                                                        

    OPERATING ACTIVITIES:
    Net income                                                                   $  4,881     $    502
    Adjustments to reconcile net income to net cash
      used in operating activities
        Equity in operations of investee                                              (45)         242
        Depreciation and amortization                                               1,138        1,680
        Changes in operating assets and liabilities                                (8,654)      (4,953)
                                                                                 --------     --------
    NET CASH USED IN OPERATING ACTIVITIES                                          (2,680)      (2,529)

    INVESTING ACTIVITIES:
    Notes receivable                                                                    -        3,190
    Acquisition of eBiocare.com, Inc.                                                   -      (38,657)
    Acquisition of Hemophilia Access, Inc., net of cash acquired                     (307)           -
    Acquisition of Apex Therapeutics, Inc., net of cash acquired                  (20,870)           -
    Acquisition of Infinity Infusion Care, Ltd., net of cash acquired             (17,923)           -
    Purchase of property and equipment and other                                     (330)        (350)
    Sales of marketable securities                                                      -       26,978
                                                                                  --------     --------
    NET CASH USED IN INVESTING ACTIVITIES                                         (39,430)      (8,839)

    FINANCING ACTIVITIES:
    Proceeds from secondary offering, net of fees                                  16,493            -
    Stock repurchases                                                                   -      (1,118)
    Proceeds from exercise of stock options                                         3,856          518
    Borrowing from credit facilities                                               11,617            -
                                                                                 --------     --------
    NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                            31,966         (600)

    NET DECREASE IN CASH AND CASH EQUIVALENTS                                     (10,144)     (11,968)

    CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                               12,264       19,016
                                                                                 --------     --------
    CASH AND CASH EQUIVALENTS AT END OF PERIOD                                   $  2,120     $  7,048
                                                                                 ========     ========

    SUPPLEMENTAL INFORMATION
    Interest paid                                                                $      7     $      -
    Income taxes paid                                                            $  1,273     $     85

  

                             See accompanying notes




               Curative Health Services, Inc. and Subsidiaries

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 1.     Basis of Presentation

     The condensed  consolidated  financial statements are unaudited and reflect
all adjustments  (consisting only of normal recurring adjustments) which are, in
the opinion of management,  necessary for a fair  presentation  of the financial
position  and  operating   results  for  the  interim  periods.   The  condensed
consolidated  financial  statements  should  be read  in  conjunction  with  the
consolidated financial statements for the year ended December 31, 2001 and notes
thereto  contained in the  Company's  Annual  Report on Form 10-K filed with the
Securities and Exchange Commission.  The results of operations for the three and
six months ended June 30, 2002 are not necessarily  indicative of the results to
be expected for the entire fiscal year ending December 31, 2002.

Note 2.  Net Income per Common Share

     Net income per common share,  basic, is computed by dividing the net income
by the weighted  average  number of common  shares  outstanding.  Net income per
common  share,  diluted,  is  computed by  dividing  net income by the  weighted
average number of shares outstanding plus dilutive common share equivalents. The
following table sets forth the computation of weighted average shares, basic and
diluted,   used  in  determining  basic  and  diluted  earnings  per  share  (in
thousands):
                                     Three Months Ended      Six Months Ended
                                           June 30,               June 30,
                                        2002       2001        2002       2001
                                     --------------------  --------------------
  Weighted average shares,basic        11,536      7,116      10,582      7,119
  Effect of dilutive stock                813        429       1,026        332
                                       ------      -----      ------      -----
  Weighted average shares,diluted      12,349      7,545      11,608      7,451
                                       ======      =====      ======      =====


Note 3.  Purchase of Apex Therapeutic Care, Inc.

     On February 28, 2002, the Company acquired all of the outstanding shares of
Apex Therapeutic Care, Inc.  ("Apex"),  a leading provider of  biopharmaceutical
products,  therapeutic  supplies  and  services  to people with  hemophilia  and
related  bleeding  disorders,  for an aggregate  purchase  price of $60 million.
Approximately  $40  million  of the  purchase  price  was paid in  shares of the
Company's  common  stock  with  the  remainder  paid  in cash  and a $5  million
promissory  note  bearing  interest  at the rate of 4.4  percent  per  annum and
maturing on February 28, 2007.  Payment of the  promissory  note is  contingent
upon certain business performance criteria; therefore, the actual payment amount
may be subject to a reduction.  The Company and the former  shareholders of Apex
amended and restated the  promissory  note on May 30, 2002,  to change the terms
relating to the business  performance criteria and to add a convertible feature.
The  amended  and  restated  promissory  note is  convertible  into a maximum of
250,000 shares of the Company's common stock. The operating  results of Apex are
included in the accompanying  financial statements from the date of acquisition.
Unaudited  pro forma  amounts  for the six months  ended June 30, 2002 and 2001,
assuming the Apex  acquisition  had occurred on January 1, 2001,  are as follows
(in thousands, except per share data):





               Curative Health Services, Inc. and Subsidiaries

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3.  Purchase of Apex Therapeutic Care, Inc. (continued)


                                                Six Months Ended June 30,
                                                    2002         2001
                                                -------------------------
  Revenues                                        $62,834      $72,230
                                                  =======      =======
  Net Income                                      $ 5,852      $ 2,282
                                                  =======      =======
  Net income per share, diluted                   $  0.47      $  0.22
                                                  =======      =======

     The pro forma operating results shown above are not necessarily  indicative
of  operations  in the periods  following  acquisition.  The unaudited pro forma
operating  results  include the results of  eBiocare.com  ("eBiocare") as if the
eBiocare acquisition,  which occurred on March 31, 2001, had occurred on January
1, 2001.

Note 4.  Purchase of Infinity Infusion Care, Inc.

     On June 28,  2002,  the Company  purchased  Infinity  Infusion  Care,  Ltd.
("Infinity"),  a Houston, Texas, based distributor of specialty  pharmaceuticals
and a provider of infusion therapy  services.  Infinity focuses on the specialty
infusion market, primarily in immunoglobulin therapy (prescribed for individuals
whose  immune  systems  cannot  function  sufficiently  to fight  infectious  or
inflammatory  diseases).  The aggregate  purchase  price was $24 million,  which
consisted of $18 million in cash and $6 million in promissory notes,  which bear
interest  at a rate of 3 percent  per annum,  mature on June 28,  2007,  and are
convertible  at a price per share of $16.08 into an aggregate of 373,111  shares
of the Company's common stock. The cash portion of the  consideration was funded
in part by cash on hand and in part by borrowing on the  Company's  credit lines
with  Healthcare  Business  Credit  Corporation  ("HBCC").  The  acquisition was
accounted  for using the  purchase  method of  accounting,  and the  accounts of
Infinity  and  related  goodwill  are  included  in the  condensed  consolidated
financial statements at June 30, 2002.

Note 5.  Segment Information

     The Company adheres to the provisions of Statement of Financial  Accounting
Standards  ("SFAS") No. 131,  "Disclosures  about  Segments of an Enterprise and
Related  Information."  The  Company  has  two  reportable  segments:  Specialty
Healthcare Services and Specialty Pharmacy Services. In its Specialty Healthcare
Services   business  unit,  the  Company  contracts  with  hospitals  to  manage
outpatient Wound Care Center(R)  programs.  In its Specialty  Pharmacy  Services
business unit, the Company  contracts with insurance  companies,  government and
other  payors to provide  direct to patient  distribution  of  biopharmaceutical
products.  The  Company  evaluates  segment  performance  based on  income  from
operations.  Management  estimates  that  corporate  general and  administrative
expenses  allocated  to the  reportable  segments  are 60 percent for  Specialty
Health  Services and 40 percent for Specialty  Pharmacy  Services.  Intercompany
transactions are eliminated to arrive at consolidated totals.





               Curative Health Services, Inc. and Subsidiaries

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 5.  Segment Information (continued)

The following tables present the results of operations and total assets of the
reportable segments of the Company for the three months ended June 30, 2002 and
2001 (in thousands):


                                      For the Three Months Ended
                                             June 30, 2002
                            --------------------------------------------------
                            Specialty    Specialty   Eliminating
                             Health      Pharmacy     Entries         Total
                            --------------------------------------------------
 Revenues                    $ 8,964      $ 22,956      $     -      $ 31,920
                             =======      ========      =======      ========
 Income from operations      $ 1,682      $  3,184      $     -      $  4,866
                             =======      ========      =======      ========
 Total assets                $42,741      $118,686      $ 3,285      $164,712
                             =======      ========      =======      ========

                                       For the Three Months Ended
                                               June 30, 2001
                            --------------------------------------------------
                                Specialty   Specialty   Eliminating
                                 Health      Pharmacy     Entries       Total
                            --------------------------------------------------
  Revenues                    $ 12,281       $11,690      $     -       $23,971
                              ========       =======      =======       =======
  Income from operations      $   (360)      $   525      $     -       $   165
                              ========       =======      =======       =======
  Total assets                $ 38,285       $40,505      $(2,456)      $76,334
                              ========       =======      =======       =======

The following tables present the results of operations and total assets of the
reportable segments of the Company for the six months ended June 30, 2002 and
2001 (in thousands):

                                       For the Six Months Ended
                                               June 30, 2002
                            --------------------------------------------------
                                Specialty   Specialty   Eliminating
                                 Health      Pharmacy     Entries       Total
                            --------------------------------------------------
  Revenues                    $17,859      $ 36,825      $      -      $ 54,684
                              =======      ========      ========      ========
  Income from operations      $ 3,885      $  4,565      $      -      $  8,450
                              =======      ========      ========      ========
  Total assets                $42,741      $118,686      $  3,285      $164,712
                              =======      ========      ========      ========

                                          For the Six Months Ended
                                               June 30, 2001
                            --------------------------------------------------
                                Specialty   Specialty   Eliminating
                                 Health      Pharmacy     Entries       Total
                            --------------------------------------------------
  Revenues                    $ 25,798       $11,690      $     -       $37,488
                              ========       =======      =======       =======
  Income from operations      $    (69)      $   525      $     -       $   456
                              ========       =======      =======       =======
  Total assets                $ 38,285       $40,505      $(2,456)      $76,334
                              ========       =======      =======       =======







               Curative Health Services, Inc. and Subsidiaries

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 6.  Goodwill and other intangible assets

     In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business  Combinations,"  and SFAS No.  142,  "Goodwill  and  Other  Intangible
Assets." SFAS No. 141 requires  business  combinations  initiated after June 30,
2001 to be accounted for using the purchase  method of accounting  and specifies
criteria that intangible assets acquired in a business  combination must meet in
order to be recognized and reported  apart from goodwill.  SFAS No. 142 requires
that purchased  goodwill and intangible  assets with indefinite  useful lives no
longer be amortized into results of operations. Instead, goodwill and intangible
assets should be tested,  at least  annually,  for impairment and, if necessary,
written down and charged to results of  operations  only in the periods in which
the recorded value of goodwill and certain  intangibles  exceeds fair value. The
provisions of each statement were adopted by the Company on January 1, 2002.

     The  following  table sets forth the pro forma net income and  earnings per
share for the current and corresponding prior period as if SFAS No. 142 had been
adopted in the prior period (in thousands, except per share data):

                                        Three Months Ended    Six Months Ended
                                             June 30,             June 30,
                                          2002     2001       2002        2001
                                       ------------------    -----------------
  Reported net income                   $2,831      $ 10      $4,881      $502
  Add back:  Goodwill amortization           -       434           -       477
                                        ------      ----      ------      ----
  Adjusted net income                   $2,831      $444      $4,881      $979
                                        ======      ====      ======      ====

  Basic earnings per share:
  Reported net income                   $0.25      $   -      $0.46      $0.07
  Goodwill amortization                     -       0.06          -       0.07
                                        -----      -----      -----      -----
  Adjusted net income                   $0.25      $0.06      $0.46      $0.14
                                        =====      =====      =====      =====

  Diluted earnings per share:
  Reported net income                   $0.23      $   -      $0.42      $0.07
  Goodwill amortization                     -       0.06          -       0.07
                                        -----      -----      -----      -----
  Adjusted net income                   $0.23      $0.06      $0.42      $0.14
                                        =====      =====      =====      =====







               Curative Health Services, Inc. and Subsidiaries

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 6.  Goodwill and other intangible assets (continued)

     As the Company's  acquisitions  were accounted for as stock purchases,  its
goodwill  amortization  is not tax  deductible.  Therefore,  the  impact  of the
adoption  of SFAS No. 142  resulted  in an increase in net income of $.4 million
and an increase in diluted  earnings  per share of  approximately  $0.06 for the
three months ended June 30, 2001. For the first six months of 2001, the adoption
of SFAS No. 142  resulted  in an increase of $.5 million in net income and $0.07
in diluted earnings per share.

     As required  under SFAS No. 142,  the Company  will test its  goodwill  for
impairment.  Although the Company has not yet completed the impairment test, the
Company does not expect to record an impairment charge in 2002.

Note 7.  Changes in Capital Structure

     During  the  first  six  months  of 2002,  the  Company  had the  following
significant changes in capital structure:

     Acquisition  of  Hemophilia  Access,  Inc. On January 8, 2002,  the Company
acquired all of the outstanding  shares of Hemophilia  Access,  Inc. in exchange
for 175,824  shares of its common stock,  which amounted to  approximately  $2.4
million, and approximately $.3 million in cash.

     Private  Placement.  On February 8, 2002,  the Company  completed a private
placement of 1,059,000  shares of common stock to  accredited  investors for net
proceeds of $16.5 million.

     Acquisition of Apex. On February 28, 2002, the Company  acquired all of the
outstanding shares of Apex Therapeutic Care, Inc. for $60 million. Approximately
$40 million of the  purchase  price was paid in shares of the  Company's  common
stock with the remainder paid in cash and a $5 million  promissory  note bearing
interest at the rate of 4.4 percent per annum and maturing on February 28, 2007.
Payment of the promissory note is contingent upon certain  business  performance
criteria;  therefore,  the actual  payment amount may be subject to a reduction.
The  Company  and the former  shareholders  of Apex  amended  and  restated  the
promissory  note on May 30, 2002,  to change the terms  relating to the business
performance  criteria and to add a convertible feature. The amended and restated
promissory note is convertible into a maximum of 250,000 shares of the Company's
common stock.

     Acquisition of Infinity  Infusion Care,  Ltd. On June 28, 2002, the Company
acquired all of the outstanding partnership interests of Infinity Infusion Care,
Ltd.  for $24 million  which  consisted of $18 million in cash and $6 million in
promissory notes,  which bear interest at a rate of 3 percent per annum,  mature
on June 28,  2007,  and are  convertible  at a price per share of $16.08 into an
aggregate of 373,111 shares of the Company's common stock.






Item 2.   Management's Discussion and Analysis of Financial Condition and
Results of Operations

Overview
     Curative Health Services,  Inc.  ("Curative" or the "Company") is a leading
disease  management  company that operates in two business  segments:  Specialty
Pharmacy Services and Specialty Healthcare  Services.  In its Specialty Pharmacy
operations, the Company purchases  biopharmaceutical products from manufacturers
and then  contracts  with  insurance  companies,  government and other payors to
provide direct to patient distribution of and education about, and other support
services  relating to, these  biopharmaceutical  products.  With the purchase of
Infinity,  the Specialty Pharmacy Services business unit offers, under contracts
with  payors,   infusion  therapy  services  for  patients  with  immune  system
disorders.  The Company's Specialty Pharmacy revenues are derived primarily from
fees paid by the payors under these contracts for the purchase and  distribution
of these  biopharmaceuticals and for infusion services provided. In addition, as
part   of   its   Specialty   Pharmacy   operations,    the   Company   provides
biopharmaceutical  product distribution and support services under contract with
retail  pharmacies  for which it receives  service fees.  The  biopharmaceutical
products  distributed and the infusion therapies offered by the Company are used
by patients with chronic conditions, such as hemophilia, hepatitis C, rheumatoid
arthritis,   multiple  sclerosis,  and  immune  system  disorders.  The  Company
contracts with approximately 197 payors and 15 retail pharmacies.

     The Specialty Healthcare Services business unit contracts with hospitals to
manage Wound Care Center(R) programs. These Wound Care Center(R) programs offer
a comprehensive range of services that enable the Specialty  Healthcare Services
business unit to provide patient specific wound care diagnosis and treatments on
a cost-effective  basis.  Specialty  Healthcare  Services currently operates two
types of Wound Care Center(R) programs with hospitals: a management model and an
"under arrangement" model.

     In the management model,  Specialty Healthcare Services provides management
and support  services for a chronic wound care  facility  owned or leased by the
hospital and staffed by  employees of the  hospital,  and  generally  receives a
fixed monthly  management fee or a combination of a fixed monthly management fee
and a variable case management fee. In the "under arrangement" model,  Specialty
Healthcare  Services provides  management and support  services,  as well as the
clinical and  administrative  staff,  for a chronic wound care facility owned or
leased by the  hospital,  and  generally  receives  fees  based on the  services
provided  to  each  patient.  In  both  models  physicians  remain  independent.
Specialty  Healthcare  Services  offers  assistance in  recruiting  and provides
training in wound care to the  physicians  and staff  associated  with the Wound
Care Center(R) programs.

Critical Accounting Policies and Estimates

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations discusses the Company's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United  States.  The  preparation  of these  consolidated  financial  statements
requires  management to make estimates and assumptions  that affect the reported
amounts of assets and  liabilities  and the disclosure of contingent  assets and
liabilities  at the  date  of the  consolidated  financial  statements  and  the
reported  amounts of revenues and expenses  during the reporting  period.  On an
on-going  basis,  management  evaluates its estimates and  judgments,  including
those related to bad debts, inventories,  intangibles,  income taxes and revenue
recognition.   Management  bases  its  estimates  and  judgments  on  historical
experience and on various other factors that are believed to be reasonable under
the  circumstances,  the  results of which  form the basis for making  judgments
about the  carrying  values  of  assets  and  liabilities  that are not  readily
apparent  from other  sources.  Actual  results may differ from these  estimates
under  different  assumptions or conditions.  Management  believes the following
critical  accounting  policies,   among  others,  affect  its  more  significant
judgments and estimates used in the  preparation of its  consolidated  financial
statements:

     Trade  receivables:  Considerable  judgment is required  in  assessing  the
ultimate  realization of receivables,  including the current financial condition
of the customer, age of the receivable,  and the relationship with the customer.
The Company  estimates its allowances for doubtful accounts using these factors.
If the  financial  condition of the  Company's  customers  were to  deteriorate,
resulting  in an  impairment  of  their  ability  to make  payments,  additional
allowances  may be required.  In  circumstances  where the Company is aware of a
specific  customer's   inability  to  meet  its  financial   obligations  (e.g.,
bankruptcy  filings),  a  specific  reserve  for bad debts is  recorded  against
amounts  due to reduce  the  receivable  to the amount  the  Company  reasonably
believes will be collected.  For all other  customers,  the Company has reserves
for bad debt based upon the total accounts  receivable  balance.  As of June 30,
2002,  the  Company's  reserves for accounts  receivable  was  approximately  22
percent of total receivables.

     Inventory:  Inventories  are  carried  at the  lower of cost or market on a
first in, first out basis.  Inventory  consists of high cost  biopharmaceuticals
that in many cases require refrigeration or other special handling. As a result,
inventories  are subject to spoilage or  shrinkage.  On a quarterly  basis,  the
Company  performs a physical  inventory and determines  whether any shrinkage or
spoilage  adjustments  are needed.  Although the Company  believes its inventory
balances at June 30, 2002 are  reasonably  accurate,  there can be no assurances
that  spoilage or shrinkage  adjustments  will not be needed in the future.  The
recording  of any such  reserve  may have a  negative  impact  on the  Company's
operating results.

     Deferred tax assets: The Company has approximately $6.7 million in deferred
tax assets as of June 30, 2002 to record against future income. The Company does
not have a  valuation  allowance  against  this asset as it  believes it is more
likely than not that the tax assets will be realized. The Company has considered
future income  expectations and prudent tax strategies in assessing the need for
a valuation  allowance.  In the event that the Company  determines in the future
that it needs to record a valuation  allowance,  an  adjustment  to deferred tax
assets would be charged against income in the period of determination.

     Goodwill and intangibles: Goodwill and intangibles consist of the excess of
purchase  price  over  the fair  value of net  tangible  and  intangible  assets
acquired, and separately identifiable  intangibles such as pharmacy and customer
relationships,  covenants not to compete,  and trademarks.  Effective January 1,
2002, the Company adopted SFAS No. 142, "Goodwill and Other Intangible  Assets,"
and is required to analyze its goodwill for  impairment on an annual  basis.  In
assessing the  recoverability  of the Company's  goodwill and  intangibles,  the
Company must make  assumptions  regarding  estimated future cash flows and other
factors to determine the fair value of the respective assets. If these estimates
or  assumptions  change  in the  future,  the  Company  may  need to  record  an
impairment  charge for these assets. An impairment charge would reduce operating
income in the period it was determined that the charge was needed.

Results of Operations

     Revenues.  The Company's  revenues for the second quarter of 2002 increased
33 percent to $31.9 million  compared to $24.0 million for the second quarter of
the prior fiscal year. For the first six months of 2002,  revenues  increased 46
percent to $54.7 million from $37.5 million for the same period in 2001.

     Service revenues,  attributed entirely to the Specialty Healthcare Services
business  unit,  decreased 27 percent to $9.0  million in the second  quarter of
2002 from $12.3 million in the second  quarter of 2001. For the first six months
of 2002,  service  revenues  decreased 31 percent to $17.9  million  compared to
$25.8  million for the same period in 2001.  The service  revenues  decreases of
$3.3  million  for the second  quarter  2002 and $7.9  million for the first six
months of 2002 are  attributable  to the  operation of 96 Wound Care  Center (R)
programs at the end of the second  quarter of 2002 as compared to 112 at the end
of the  second  quarter  of the prior  fiscal  year as the  result  of  contract
terminations and renegotiation. At any time during any given year, 10 percent to
20 percent of hospital contracts are being renegotiated.  The Company expects to
continue contract renegotiations in 2002. Historically,  some hospital contracts
have expired  without  renewal and others have been terminated by the Company or
the client  hospital for various  reasons prior to their  scheduled  expiration.
Hospitals  are  currently  facing  financial  challenges  associated  with lower
occupancy rates and reduced revenue streams due to pricing  pressures from third
party payors.  Program  terminations by client  hospitals have been effected for
such  reasons  as  reduced  reimbursement,   financial  restructuring,  layoffs,
bankruptcies  or  even  hospital   closings.   Further,   the  Medicare  program
implemented  a new  reimbursement  system  during 2000 for  hospital  outpatient
services which has reduced  reimbursement  rates to hospitals.  The termination,
non-renewal or renegotiations of a material number of management contracts could
result in a continued  decline in the Company's  Specialty  Healthcare  Services
business unit revenue.

     Product revenues increased $11.3 million,  or 96 percent,  to $23.0 million
in the second  quarter of 2002 from $11.7 million in the second quarter of 2001.
The  increase in product  revenues is  primarily  attributable  to the  internal
growth of hemophilia  patient  revenues and the inclusion of the acquisitions of
Hemophilia  Access,  Inc.  ("HAI") and Apex in 2002,  offset by a  reduction  in
Specialty  Healthcare  Services  revenues  of $.9  million  as the result of the
elimination of Procuren product sales and the elimination of Specialty  Pharmacy
Services  sales related to  unprofitable  injectable  contracts.  For the second
quarter of 2002,  product revenues included $21.1 million of hemophilia  related
products and $1.8 million of other injectable products. For the first six months
of 2002,  product  revenues  increased $25.1 million,  or 215 percent,  to $36.8
million  compared to $11.7  million for the same period in 2001.  This  increase
reflects  the  internal  growth of  hemophilia  patient  related  revenues,  the
inclusion of eBiocare  for six months in 2002 versus  three  months in 2001,  as
well as the  inclusion  of the  results  of HAI and  Apex in 2002,  offset  by a
decrease of $1.5 million in eliminated Procuren product sales and a reduction of
$4.2 million in Specialty  Pharmacy  Services  unprofitable  injectable  product
sales. For the first six months of 2002, product revenues included $32.6 million
of hemophilia related products and $4.3 million of other injectable products.

     Cost  of  Services.  The  cost  of  services,  attributed  entirely  to the
Specialty  Healthcare  Services  business unit,  decreased  $3.2 million,  or 44
percent,  to $4.0 million in the second quarter of 2002 from $7.2 million in the
second quarter of 2001.  The decrease is  attributable  to reduced  staffing and
operating  expenses of approximately $1.0 million related to the operation of 96
programs at the end of the second  quarter of 2002 as compared with 112 programs
operating at the end of the second  quarter  2001.  Additionally,  there were 11
fewer  under-arrangement  programs in operation at the end of the second quarter
of 2002 as compared to the same period for 2001, at which the services component
of costs is higher than at the  Company's  other  centers due to the  additional
clinical staffing and expenses that these models require. For the second quarter
of 2002, this reduction in the number of  under-arrangement  programs  accounted
for approximately  $.9 million of the decrease in the cost of services.  For the
first six  months of 2002,  the cost of  services  attributed  to the  Specialty
Healthcare Services business unit decreased $6.9 million, or 45 percent, to $8.4
million  compared to $15.3 million for the same period in 2001.  The decrease is
the result of reduced staffing and operating expenses of $2.3 million related to
the  decrease  in  the  number  of  programs.   Further,  the  reduction  of  11
under-arrangement  programs in  operation  at the end of the first six months of
2002 as compared to the same period for 2001  accounted for  approximately  $2.0
million of the decrease in costs. As a percentage of service revenues,  the cost
of services for the second quarter of 2002 was 44 percent compared to 59 percent
for the same  period  in 2001.  For the first  six  months of 2002,  the cost of
services  as a  percentage  of service  revenues  was 47 percent  compared to 59
percent  for  the  same  period  in  2001.  These   improvements  are  primarily
attributable to the reorganization  done by the Company in the fourth quarter of
2001.

     Cost of product sales. The cost of product sales increased $6.6 million, or
67 percent to $16.5 million from $9.9 million in the second quarter of 2001. The
increase is attributable to the internal growth of hemophilia  patient  revenues
and the HAI and Apex  acquisitions in 2002,  offset by the reduction in Procuren
related costs of $.8 million as the result of the elimination of Procuren sales,
and a reduction in sales of Specialty Pharmacy Services unprofitable  injectable
products.  For the first six months of 2002, the cost of product sales increased
$16.4 million, or 166 percent, to $26.3 million compared to $9.9 million for the
same period in 2001. This increase is due to the Specialty Pharmacy acquisitions
in 2002 and the six months of costs  related to eBiocare  in 2002  versus  three
months in 2001, offset by the eliminated Procuren related costs of $1.8 million,
and a reduction in sales of Specialty Pharmacy Services unprofitable  injectable
products.  As a percentage of product  sales,  the cost of product sales for the
second  quarter  was 72 percent  compared  to 85 percent  for the same period in
2001.  For the  first  six  months  of  2002,  the  cost of  product  sales as a
percentage  of product  revenues  was 71 percent  compared to 85 percent for the
first six months of 2001.  This  improvement is  attributable to a higher mix of
hemophilia  related product sales in the Specialty  Pharmacy  Services  business
unit and the elimination of Procuren sales.

     Selling,  General and Administrative.  Selling,  general and administrative
expenses  were flat at $6.6  million for the second  quarter 2002 as compared to
the same period of 2001. For the first six months of 2002, selling,  general and
administrative  expenses totaled $11.5 million compared to $11.8 million for the
same period in 2001, a decrease of $.3 million, or 2 percent.  The reduction for
the  six-month  period is  attributable  to a decrease  in  expenses  related to
Specialty Health Services of $1.8 million, offset by an increase of $2.0 million
of Specialty  Pharmacy  Services  expenses  attributable to the acquisitions and
increased  costs  related to  additional  corporate  staff.  As a percentage  of
revenues,  selling,  general and administrative  expenses were 21 percent in the
second quarter of 2002,  compared to 28 percent for 2001, and 21 percent for the
first six months of 2002  compared  to 31 percent  for the same period for 2001.
The  improvement  is due to the  increased  revenue  base  and  lower  Specialty
Healthcare Services expenses in 2002.

     Net Income.  Net income was $2.8 million or $0.23 per diluted  share in the
second quarter of 2002 compared to $.01 million, or breakeven per diluted share,
in the second  quarter of 2001. For the first six months of 2002, net income was
$4.9 million, or $0.42 per diluted share compared to net income of $0.5 million,
or $0.07  per  diluted  share  for the same  period in 2001.  The  increases  in
earnings of $2.8 million for the second quarter of 2002 and $4.4 million for the
first six months of 2002 are  primarily  attributable  to the  inclusion  of the
Specialty  Pharmacy  Services  business unit results in 2002, the elimination of
Procuren  product  sales and the  reduction  of  Specialty  Healthcare  Services
selling general and administrative costs.

Liquidity and Capital Resources.

     Working capital was $13.9 million at June 30, 2002 compared to $2.5 million
at December 31, 2001.  Total cash and cash  equivalents  as of June 30, 2002 was
$2.1 million and was invested primarily in highly liquid money market funds. The
ratio of current  assets to current  liabilities  was 1.4:1 at June 30, 2002 and
1.1:1 at December 31, 2001. The improvement in the Company's working capital and
current ratio is primarily  attributable to the  acquisitions of Apex and HAI in
the first quarter of 2002 and the  acquisition of Infinity in the second quarter
of 2002.

     Cash flows used in operating  activities  for the six months ended June 30,
2002  totaled  $2.7 million  primarily  attributable  to an increase in accounts
receivable, a reduction in accounts payable and accrued expenses, including $9.5
million in  payments  made  during  the first six months of 2002  related to the
settlement of the  Department of Justice  lawsuit.  Cash flows used in investing
activities totaled $39.4 million primarily attributable to the purchases of HAI,
Apex and Infinity.  Cash flows  provided by financing  activities  totaled $32.0
million,  attributable  to net proceeds of $16.5 million from the Company's sale
of shares in a private placement transaction,  $3.9 million in proceeds from the
exercise of stock  options,  and $11.6 million in borrowings  from the Company's
credit facilities.

     For the first six months of 2002, the Company experienced a net increase in
accounts receivable of $12.7 million, primarily attributable to the purchases of
Apex, HAI and Infinity. Days sales outstanding were 68 days as of June 30, 2002,
as  compared to 58 days at  December  31,  2001.  At June 30,  2002,  days sales
outstanding for the Specialty  Healthcare  Services  business was 61 days and 70
days for the Specialty Pharmacy Services business.

     The Company's longer term cash requirements include working capital for the
expansion of its Specialty  Pharmacy Services business and Specialty  Healthcare
Services business, and for acquisitions. Other cash requirements are anticipated
for  capital  expenditures  in the  normal  course of  business,  including  the
acquisition  of  software,  computers  and  equipment  related to the  Company's
management information systems.  Additionally,  as of June 30, 2002, the Company
has a $7.0 million  obligation,  payable over  approximately  four years, to the
Department of Justice  related to the  settlement of its  litigation  and a $6.5
million  obligation related to the settlement of its Shareholder  lawsuit.  (See
Legal Proceedings, Part II Item 1). In January of 2002, the Company entered into
$25 million line of credit with HBCC,  and, in February  2002,  the Company sold
1,059,000 shares of common stock in a private  placement  transaction  raising a
net total of $16.5 million.  In addition,  in May of 2002, the Company secured a
4-year,  $10 million term loan facility with HBCC.  These  transactions  were to
provide liquidity for both working capital and acquisitions. The Company paid $9
million in January 2002 to the  Department  of Justice as part of the  Company's
settlement  agreement,  used  approximately  $21 million in cash  related to the
purchase of Apex in February  2002,  and paid $18 million in cash in  connection
with the acquisition of Infinity in June 2002. The Company  expects that,  based
on its  current  business  plan,  its  existing  cash and cash  equivalents  and
available  credit will be  sufficient  to satisfy its working  capital  needs at
least  through  June 30,  2003.  The  effect  of  inflation  risk is  considered
immaterial.

Health Insurance Portability and Accountability Act

     During 2000, final  regulations  regarding the protection of the privacy of
personal health  information,  promulgated by the Department of Health and Human
Services,  were published in the Federal  Register.  These  regulations  set the
standards for securing  patient records and generally  prohibit covered entities
from using or  disclosing  protected  health  information.  As a result of these
regulations,  the Company anticipates expenditures in ensuring patient data kept
on computer networks maintained at the Specialty  Healthcare Services Wound Care
Center(R) programs, Specialty Pharmacy Services operations and corporate offices
are in compliance  with these  regulations.  While the Company  believes that it
will be in compliance by the February 2003 deadline,  there can be no assurances
that the cost of  reaching  compliance  will not have a  material  impact on the
financial condition of the Company.

Cautionary Statement

     This  report  contains  forward-looking  statements  within the  meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements include statements
regarding  intent,  belief  or  current  expectations  of the  Company  and  its
management.  These  forward-looking  statements  are not  guarantees  of  future
performance and involve a number of risks and  uncertainties  that may cause the
Company's  actual  results to differ  materially  from the results  discussed in
these statements. Factors that might cause such differences include, but are not
limited to, those described under the heading, "Critical Accounting Policies and
Estimates" herein, or those described in Exhibit 99 to this Form 10-Q, and other
factors described in the Company's future filings with the SEC.





Item 3. Quantitative and Qualitative Disclosures About Market Risk

     The Company does not have operations  subject to risks of material  foreign
currency  fluctuations,  nor does it use derivative financial instruments in its
operations or  investment  portfolios.  The Company  places its  investments  in
instruments  that  meet high  credit  quality  standards,  as  specified  in the
Company's investment policy guidelines. The Company does not expect any material
loss with  respect to its  investment  portfolio  or  exposure  to market  risks
associated with interest rates.








Curative Health Services, Inc. and Subsidiaries

Part II.    Other Information

Item 1. Legal Proceedings

     With  respect to the  Company's  legal  proceedings  previously  disclosed,
except  as  described  in  the  next  sentence,  there  have  been  no  material
developments  since the disclosure  provided in Item 3 - "Legal  Proceedings" in
the  Company's  Annual Report on Form 10-K filed with the SEC for the year ended
December 31, 2001. With respect to the eBioCare indemnification  litigation,  on
or  about  May 2,  2002,  the  court  stayed  the  litigation  with  respect  to
substantially all such claims, pending arbitration of such matters.

     With respect to the shareholder lawsuit previously disclosed,  on July 11,
2002,  the United  States  District  Court for the Eastern  District of New York
ordered a final judgment approving the settlement.  Pursuant to the terms of the
settlement,  even though the Company  maintained that there was no basis for the
imposition of  liability,  in order to avoid the delay and expense of protracted
litigation,  the Company made the final  payment of $6.5 million in an aggregate
of 421,044 shares of the Company's  common stock on August 2, 2002 and August 5,
2002. The remaining $4 million was previously paid from insurance proceeds.

Item 2.

Changes in  Securities  and Use of Proceeds

(c)

     Acquisition  of  Hemophilia  Access,  Inc.  On January  8,  2002,  Curative
acquired all of the outstanding  shares of Hemophilia  Access,  Inc. in exchange
for 175,824  shares of its common stock,  which amounted to  approximately  $2.4
million, and approximately $.3 million in cash.

     Private  Placement.  On  February  8, 2002,  Curative  completed  a private
placement of 1,059,000  shares of common stock to  accredited  investors for net
proceeds of $16.5 million.  U.S.  Bancorp Piper Jaffray acted as placement agent
for the shares and received a placement fee of approximately $.4 million.

     Acquisition  of Apex.  On February 28, 2002,  Curative  acquired all of the
outstanding shares of Apex Therapeutic Care, Inc. for $60 million. Approximately
$40 million of the  purchase  price was paid in shares of the  Company's  common
stock with the remainder paid in cash and a $5 million  promissory  note bearing
interest at the rate of 4.4 percent per annum and maturing on February 28, 2007.
Payment of the promissory note is contingent upon certain business  performance
criteria;  therefore,  the actual  payment amount may be subject to a reduction.
The  Company  and the former  shareholders  of Apex  amended  and  restated  the
promissory  note on May 30, 2002,  to change the terms  relating to the business
performance  criteria and to add a convertible feature. The amended and restated
promissory note is convertible into a maximum of 250,000 shares of the Company's
common stock.

      Acquisition of Infinity Infusion Care, Ltd. On June 28, 2002, Curative
acquired all of the outstanding partnership interests of Infinity Infusion Care,
Ltd. for $24 million which consisted of $18 million in cash and $6 million in
promissory notes, which bear interest at a rate of 3 percent per annum, mature
on June 28, 2007, and are convertible at a price per share of $16.08 into an
aggregate of 373,111 shares of the Company's common stock.

Each of the issuances and sales of shares of common stock  described  above were
deemed to be exempt from  registration  under the Securities Act of 1933 in
reliance on Section 4(2) of the Act or  Regulation D  promulgated  thereunder as
transactions by the issuer not involving a public offering, where the purchasers
represented their intention to acquire  securities for investment  purposes only
and not with a view to or for sale in connection with any distribution  thereof,
and  received  or had  access to  adequate  information  about  Curative  Health
Services, Inc.

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

     The Company held its 2002 annual meeting of  stockholders  on May 30, 2002.
Proxies for the meeting were solicited  pursuant to Section 14 of the Securities
Exchange Act of 1934, as amended, and there was no solicitation in opposition to
management's  nominees as listed in the proxy  statement.  There were present at
the Annual Meeting in person or by proxy the holders of 9,103,823  votes. At the
meeting,  the  stockholders  elected all seven members of the Company's Board of
Directors to serve for a term of one year.

Elected  members  of the Board of  Directors:  (Shares  voted  affirmative  in
parenthesis)

                                Affirmative         Withheld/Against

         Paul Auerbach          (9,058,546)              45,277
         Daniel Berce           (9,051,262)              52,561
         Lawrence P. English    (9,051,135)              52,688
         Joseph Feshbach        (9,049,387)              54,436
         Timothy I. Maudlin     (9,051,035)              52,788
         Gerard Moufflet        (9,057,469)              46,354
         John C. Prior          (9,051,142)              52,681

The stockholders approved of the following:

(a) The proposed  amendments  to the Curative  Health  Services,  Inc.  2000
    Stock  Incentive  Plan.  Number  of  votes  for  were  6,853,857,  against
    2,230,489, and 19,477 abstained.

(b) The  proposed   amendments  to  the  Curative  Health   Services,   Inc.
    Non-Employee  Director  Stock  Option  Plan.  Number  of  votes  for  were
    7,209,452, against 1,876,309, and 18,062 abstained.

(c) The ratification of the appointment of Ernst & Young LLP as the Company's
    independent auditors. Number of votes for were 9,084,712, against 14,924,
    and 4,187 abstained.

Item 5.     Other Information

The Chairman and Chief Executive Officer of the Company, Joseph Feshbach,
withdrew his Rule 10b5-1 plan on May 20, 2002.

Lawrence English resigned from the Compensation and Stock Option Committee of
the Board of Directors of the Company on June 21, 2002, and was replaced by
Dr.Paul Auerbach.

Item 6.     Exhibits and Reports on Form 8-K

(a) Exhibits

    Exhibit 2.1 Purchase Agreement, dated as of June 10, 2002, by and among
                Curative Health Services, Inc., Infinity Infusion, LLC and
                Infinity Infusion II, LLC, and IIC GP, LLC, Azar I. Delpassand,
                Dr. Ebrahim Delpassand, Tara Imani, Maryam Panahi and Yassamin
                Norouzian (incorporated by reference to Exhibit 99.2 to the
                Company's Current Report on Form 8-K dated June 10, 2002)

   Exhibit 2.2 Amendment No. 1 to Purchase Agreement, dated June 28, 2002,
               by and among Curative Health Services, Inc., Infinity Infusion,
               LLC and Infinity Infusion II, LLC and Bijan Imani, as Sellers'
               Representative on behalf of the Sellers (incorporated by
               reference to Exhibit 2.2 to the Company's Current Report on Form
               8-K dated June 28, 2002)

   Exhibit 10.1 Amended  and  Restated  Loan and  Security  Agreement  by and
                among  Curative  Health  Services,  Inc.,  eBioCare.com,  Inc.,
                Hemophilia  Access,  Inc.,  Apex  Therapeutic  Care,  Inc.  and
                Healthcare  Business  Credit  Corporation,  dated as of May 17,
                2002   (incorporated  by  reference  to  Exhibit  99.3  to  the
                Company's Current Report on Form 8-K dated June 10, 2002)

   Exhibit 99.1  Cautionary Statements

   Exhibit 99.2  Certification of Chief Executive Officer pursuant to 18 U.S.C.
   ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
   2002.

   Exhibit 99.3  Certification of Chief Financial Officer pursuant to 18 U.S.C.
   ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
   2002.

   The Company has excluded from the exhibits filed with this report instruments
   defining the rights of holders of long-term convertible debt of the Company
   where the total amount of the securities authorized under such instruments
   does not exceed 10 percent of its total assets. The Company hereby agrees
   to furnish a copy of any of these instruments to the SEC upon request.


(b)Form 8-K

   Form 8-K/A dated February 28, 2002 (and filed May 3, 2002), reporting under
   Item 7 on the financial statements of the business acquired. This Form 8-K/A
   amends the Form 8-K filed with the Securities and Exchange Commission on
   March 11, 2002.

   Form 8-K dated May 20, 2002, reporting under Item 5 on the securing of a 4
   year, $10 million term loan facility with Healthcare Business Credit
   Corporation. This loan facility is in addition to the $25 million line of
   credit which was established with Healthcare Business Credit Corporation in
   January 2002, giving the Company an aggregate $35 million in credit
   facilities to fund its acquisition strategy and for general operating
   purposes.

   Form 8-K dated June 10, 2002, reporting under Item 2 on the entering into an
   agreement to acquire Infinity Infusion Care, Ltd., and reporting under Item 5
   on the entering into an Amended and Restated Loan and Security Agreement with
   Healthcare Business Credit Corporation, consisting of a $25 million revolving
   credit and a 4 year, $10 million term loan facility.

   Form 8-K dated June 28, 2002, reporting under Item 2 on the acquisition of
   Infinity Infusion Care, Ltd.







SIGNATURES

Pursuant to the requirements 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.

Dated:  August 14, 2002

                                Curative Health Services, Inc.
                               (Registrant)

                               /s/ Joseph Feshbach
                               -------------------
                               Joseph Feshbach
                               Chief Executive Officer and Chairman



                               /s/  Thomas Axmacher
                               --------------------
                               Thomas Axmacher
                               Chief Financial Officer
                               (Principal Financial and Accounting Officer)



                                                                   Exhibit 99.1

CAUTIONARY STATEMENTS

RISK RELATED TO OUR BUSINESS

     If we fail to comply with the terms of our  settlement  agreement  with the
government,  we could be subject to additional  litigation or other governmental
actions which would be harmful to our business.

     On December 28, 2001, we entered into a settlement  with the  Department of
Justice,  the United States Attorney for the Southern  District of New York, the
United  States  Attorney  for the  Middle  District  of  Florida  and  the  U.S.
Department of Health and Human  Services,  Office of the Inspector  General,  in
connection with all federal  investigations and legal proceedings related to the
whistleblower  lawsuits  previously  pending  against  us in the  United  States
District  Court for the  Southern  District  of New York and the  United  States
District  Court  for the  District  of  Columbia.  The  focus of the  government
investigation  and resolution was the allegation  that we improperly  caused our
hospital  customers to seek  reimbursement  for a portion of our management fees
that included  costs  related to  advertising  and  marketing  activities by our
personnel.  Under the terms of the  settlement,  we were  released  from  claims
associated  with  services we provided  to  hospitals  and, we agreed to pay the
United States a $9 million initial  payment,  with an additional $7.5 million to
be paid  over  the next  four  years.  Pursuant  to the  settlement,  we will be
required  to fulfill  certain  additional  obligations,  including  abiding by a
five-year Corporate Integrity Agreement (which incorporates much of our existing
compliance   program),   avoiding   violations  of  law  and  providing  certain
information  to the Department of Justice from time to time. If we fail or if we
are  accused of failing to comply  with the terms of the  settlement,  we may be
subject to additional  litigation or other governmental actions. In addition, as
part of the settlement,  we consented to the entry of a judgment for $28 million
against us if we fail to comply with the terms of the settlement.

We are involved in litigation which may harm the value of our business.

     We are  currently  in  dispute  with  some of the  former  shareholders  of
eBioCare.com,  Inc. over claims by us for indemnification in connection with our
acquisition of  eBioCare.com,  Inc. These claims are for  indemnification  in an
aggregate amount in excess of $3 million, which is currently held in escrow, for
a  breach  of  certain  representations  and  warranties  made  by  such  former
shareholders. In response to our indemnification claims, the former shareholders
filed a lawsuit in Superior  Court of California,  County of Santa Clara,  on or
about January 18, 2002 against us seeking a declaratory  judgment in their favor
with  respect  to  certain  of our  claims,  and other  remedies  including  the
rescission of our acquisition of eBioCare.com, Inc. On or about May 2, 2002, the
court  stayed the  litigation  with  respect to  substantially  all such claims,
pending  arbitration  of such  matters.  Although  we  believe  this  lawsuit is
groundless and we intend to defend these claims vigorously, an adverse result in
this dispute could harm our business.

     In addition,  in the ordinary course of our business, we are the subject of
or party to  various  lawsuits,  including  those  arising  out of  services  or
products  provided  by or to our  operations,  personal  injury  and  employment
disputes,  the outcome of which,  in the opinion of management,  will not have a
material adverse effect on our financial position or results of operations.

If we are unable to manage our growth effectively, our business will be harmed.

     Our growth strategy will likely place a strain on our resources,  and if we
cannot effectively manage our growth, our business will be harmed. In connection
with our growth  strategy,  we will likely  experience  a large  increase in the
number  of our  employees,  the  size  of our  programs  and  the  scope  of our
operations.  Our ability to manage this growth and be  successful  in the future
will  depend  partly on our  ability to retain  skilled  employees,  enhance our
management  team and improve our management  information  and financial  control
systems.

     As part  of our  growth  strategy,  we  continue  to  evaluate  acquisition
opportunities. Acquisitions involve many risks, including:

o     the specialty pharmacy industry is undergoing consolidation; therefore, we
      may experience difficulty in identifying suitable candidates and
      negotiating and consummating acquisitions on attractive terms;

o     in the industry in which our Specialty Pharmacy Services division
      operates, customers have a strong affiliation with their community-based
      representatives; it is sometimes difficult to retain and assimilate the
      community-based representatives of companies we acquire;

o     because of the relationships between community-based representatives and
      customers, the loss of a single community-based representative may entail
      the loss of a significant number of customers, and we are, therefore,
      subject to a significant potential for loss of customers, especially
      during the periods in which we attempt to integrate newly-acquired
      businesses;

o     a growth strategy that involves  significant  acquisitions  results in a
      diversion of our management's attention from existing operations;

o     intangible assets typically represent a significant portion of the value
      of specialty pharmacy businesses; therefore, any future acquisition may
      involve increased amortization expense related to such assets and any such
      increase would decrease our earnings.

 We could also be exposed to  unknown or  contingent  liabilities  resulting
from  the  pre-acquisition  operations  of the  entities  we  acquire,  such  as
liability for failure to comply with health care or reimbursement laws.

We may need additional capital to finance our growth and capital requirements,
which could prevent us from fully pursuing our growth strategy.

In order to implement our present growth strategy, we will need substantial
capital  resources  and will  incur,  from time to time,  short-  and  long-term
indebtedness, the terms of which will depend on market and other conditions. Due
to uncertainties inherent in the capital markets (e.g., availability of capital,
fluctuation  of interest  rates,  etc.),  we cannot be certain that  existing or
additional  financing will be available to us on acceptable terms, if at all. As
a result,  we could be unable to fully  pursue  our  growth  strategy.  Further,
additional  financing may involve the issuance of equity  securities  that would
reduce the percentage ownership of our then current shareholders.

We could be adversely affected by an impairment of the significant amount of
goodwill on our financial statements.

     Our acquisitions of the Specialty Pharmacy companies,  eBioCare.com,  Inc.,
Hemophilia  Access,  Inc., Apex Therapeutic  Care,  Inc., and Infinity  Infusion
Care, Ltd. resulted in the recording of a significant  amount of goodwill on our
financial  statements.  The goodwill was recorded  because the fair value of the
net assets  acquired  was less than the purchase  price.  We may not realize the
full value of this  goodwill.  As such,  we evaluate on at least an annual basis
whether events and circumstances indicate that all or some of the carrying value
of  goodwill  is no longer  recoverable,  in which  case we would  write off the
unrecoverable goodwill as a charge to our earnings.

     Since our growth  strategy  will likely  involve the  acquisition  of other
companies,  we may  record  additional  goodwill  in the  future.  The  possible
write-off of this goodwill could negatively impact our future earnings.  We will
also be required to allocate a portion of the purchase price of any  acquisition
to the value of any  intangible  assets that meet the criteria  specified in the
Statement of Financial Accounting Standards No. 141 such as marketing,  customer
or contract-based  intangibles.  The amount allocated to these intangible assets
could be amortized over a fairly short period. As a result, our earnings and the
market price of our common stock could be negatively affected.

We are highly dependent on our relationships with a limited number of
biopharmaceutical and other suppliers, and the loss of any of these
relationships could significantly affect our ability to sustain or grow our
revenues.

     The biopharmaceutical industry is susceptible to product shortages. Some of
the products that we distribute,  such as intra-venous  immunoglobulin and blood
or blood plasma-related products, are collected and processed from human donors.
Accordingly,  the supply of these products is highly  dependent on human donors,
and their availability has been constrained from time to time. The industry wide
recombinant  factor VIII  product  shortage  has  lessened and while supply will
increase  significantly  this  year,  demand  will  continue  to grow.  In 2001,
approximately 42 percent,  or $15 million, of our revenues derived from our sale
of  factor  VIII.  In  2001,  we  purchased  our  supplies  of blood  and  blood
plasma-related  products from five  manufacturers,  including Baxter  Healthcare
Corp., Novo Nordisk Pharmaceuticals,  Inc., and Wyeth. The Company believes that
these five manufacturers  represent substantially all of the production capacity
for recombinant  factor VIII. In the event that one of these suppliers is unable
to continue to supply us with  products,  it is uncertain  whether the remaining
suppliers would be able to make up any shortfall  resulting from such inability.
Our  ability  to take on  additional  customers  or to acquire  other  specialty
pharmacy businesses with significant hemophilia customer bases could be affected
negatively  in the  event we are  unable  to  secure  adequate  supplies  of our
products from these manufacturers.  If these products, or any of the other drugs
or products  that we  distribute,  are in short supply for long periods of time,
our business could be harmed.

If additional providers obtain access to favorably priced products we handle,
our business could be harmed.

Because we do not receive  federal  grants under the Public Health  Service
Act, we are not eligible to participate  directly in a federal  pricing  program
administered  by the Federal  Health  Resources  and  Services  Administration's
Public Health Service,  which allows certain entities with such grants,  such as
certain  hospitals and  hemophilia  treatment  centers,  to obtain  discounts on
drugs, including certain  biopharmaceutical  products (e.g., hemophilia clotting
factor) which  products  represented  23 percent of our revenues in 2001. To the
best of our  information,  these  entities  benefit  by being  able to  acquire,
pursuant to this federal program, products competitive with ours at prices lower
than our cost for the same products. Our customers, where eligible, may elect to
obtain  hemophilia  clotting  factor,  or other  products,  from such lower-cost
entities and this would result in a loss of revenue.

Recent investigations into reporting of average wholesale prices could reduce
our pricing and margins.

     Many government payors,  including  Medicare and Medicaid,  as well as some
private  payors,  pay us directly or  indirectly  based upon the drug's  average
wholesale  price. If a drug's average  wholesale  price declines,  and if we are
unable to recoup the full amount of such  decline  from our  customers,  we will
lose revenues.  Biopharmaceutical  products,  including  hemophilia  factor, are
included as part of this drug reimbursement methodology.  In 2001, 43 percent of
our revenues resulted from  reimbursements  based on the average wholesale price
of our  products.  Average  wholesale  price  for  most  drugs is  compiled  and
published by private companies such as First DataBank,  Inc. Various federal and
state government  agencies have been investigating  whether the reported average
wholesale price of many drugs, including some that we sell, is an appropriate or
accurate  measure of the  market  price of the drugs.  As  reported  in the Wall
Street Journal,  there are also several  whistleblower  lawsuits pending against
various  drug  manufacturers  in  connection  with  the  appropriateness  of the
manufacturer's  average  wholesale price for a particular drug. These government
investigations  and lawsuits  involve  allegations that  manufacturers  reported
artificially  inflated  average  wholesale  prices  of  various  drugs  to First
DataBank,  which in turn reported these prices to its subscribers including many
state Medicaid  agencies who then included these average wholesale prices in the
state's  reimbursement  policies.  In 2001,  Bayer  Corporation,  an  occasional
supplier of  hemophilia  factor to us, agreed to pay $14 million in a settlement
with the  federal  government  and 45 states in order to close an  investigation
regarding these charges. Bayer also entered into a five-year corporate integrity
agreement with the government,  in which Bayer agreed to provide  information on
the average sale price of its drugs to the government.  In February 2000,  First
DataBank  published a Market Price Survey of 437 drugs,  which was significantly
lower than the  historic  average  wholesale  price for a number of the clotting
factor and intra-venous immunoglobulin products that we sell.  Consequently,  a
number of state  Medicaid  agencies have revised their payment  methodology as a
result of the Market  Price  Survey.  Although  the  Centers  for  Medicare  and
Medicaid  Services  had  also  announced  that  Medicare  fiscal  agents  should
calculate  the amount that they pay for  Medicare  claims for  certain  drugs by
using the lower prices on the First DataBank  Market Price Survey,  the proposal
to include  clotting  factor in the lower Medicare  pricing was  withdrawn.  The
Centers for  Medicare  and Medicaid  Services  has  announced  that it will seek
legislation that would establish payments to cover the  administrative  costs of
suppliers of clotting factor as a supplement to a lower average  wholesale price
pricing for hemophilia factor.

     On September 21, 2001, the United States House  Subcommittees on Health and
Oversight &  Investigations  held  hearings to examine how  Medicare  reimburses
providers for the cost of drugs.  In conjunction  with that hearing,  the United
States  General  Accounting  Office  issued its Draft Report  recommending  that
Medicare  establish  payment  levels  for  part-B  prescription  drugs and their
delivery and  administration  that are more closely related to their costs,  and
that payments for drugs be set at levels that reflect actual market  transaction
prices and the likely  acquisition costs to providers.  More recently,  on March
14, 2002,  the Senate Finance  Committee's  Subcommittee  on Health  conducted a
hearing on Medicare  drug  reimbursement  issues,  including  average  wholesale
price. This hearing reflects  Congress' interest in possibly changing the manner
in which the government reimburses providers for drugs.

     The government investigations and the changes occurring in the reporting of
average  wholesale  price and its effects on Medicare and Medicaid  prices could
have a negative  effect on our  business.  For example,  if the reduced  average
wholesale  prices  published  by First  DataBank  for the drugs that we sell are
ultimately  adopted as the standard by which we are paid by government payors or
private  payors,  this could have an adverse  effect on our business,  including
reducing the pricing and margins on certain of our products.

Our business would be harmed if demand for our products and services is reduced.

Reduced demand for our products and services, in either our Specialty Pharmacy
Services or Specialty Healthcare Services businesses, could be caused by a
number of circumstances, including:

o     customer shifts to treatment regimens other than those we offer;

o     new  treatments  or methods of delivery  of  existing  drugs that do not
      require our specialty products and services;

o     the recall of a drug;

o     adverse reactions caused by a drug;

o     the expiration or challenge of a drug patent;

o     competing  treatment  from a new drug, a new use of an existing  drug or
      genetic therapy;

o     drug companies  cease to develop,  supply and generate  demand for drugs
      that are compatible with the services we provide;

o     drug  companies  stop  outsourcing  the  services  we provide or fail to
      support existing drugs or develop new drugs;

o     governmental or private initiatives that would alter how drug
      manufacturers, health care providers or pharmacies promote or sell
      products and services;

o     the  loss of a  managed  care or other  payor  relationship  covering  a
      number of high revenue customers;

o     the cure of a disease we service; or

o     the death of a high-revenue customer.

Our business involves risks of professional, product and hazardous substance
liability, and any inability to obtain adequate insurance may adversely affect
our business.

     The provision of health  services  entails an inherent risk of professional
malpractice,  regulatory  violations and other similar claims.  Claims, suits or
complaints  relating to health  services  and products  provided by  physicians,
pharmacists or nurses in connection with our Specialty  Healthcare  Services and
Specialty Pharmacy Services programs may be asserted against us in the future.

     Our  operations  involve  the  handling  of  bio-hazardous  materials.  Our
employees,  like those of all companies that provide services dealing with human
blood specimens,  may be exposed to risks of infection from AIDS,  hepatitis and
other blood-borne diseases if appropriate laboratory practices are not followed.
Although we believe that our safety  procedures  for  handling and  disposing of
such  materials  comply  with the  standards  prescribed  by state  and  federal
regulations,  the risk of  accidental  infection or injury from these  materials
cannot be completely  eliminated.  In the event of such an accident, we could be
held liable for any  damages  that  result,  and such  liability  could harm our
business.

     Our operations  expose us to product and professional  liability risks that
are inherent in managing the delivery of wound care  services and the  provision
and marketing of biopharmaceutical  products. We currently maintain professional
and  product  liability  insurance  coverage  of $25  million in the  aggregate.
Because we cannot  predict the nature of future  claims that may be made, we can
not assure you that the coverage  limits of our  insurance  would be adequate to
protect  us  against  any  potential  claims,  including  claims  based upon the
transmission  of  infectious  disease,  contaminated  product or  otherwise.  In
addition,  we may not be able to obtain or  maintain  professional  and  product
liability  insurance in the future on acceptable terms or with adequate coverage
against potential liabilities.

We rely on key community-based representatives whose absence or loss could harm
our business.

     The success of our Special  Pharmacy  Services  division  depends  upon our
ability to retain key employees known as  community-based  representatives,  and
the loss of their  services could  adversely  affect our business and prospects.
Our  community-based  representatives  are our chief  contact and  maintain  the
primary relationship with our customers and the loss of a single community-based
representative could result in the loss of a significant number of customers. We
do not have key man insurance on any of our community-based representatives.  In
addition,  our success  will depend,  among other  things,  upon the  successful
recruitment  and  retention  of qualified  personnel,  and we may not be able to
retain  all of our key  management  personnel  or be  successful  in  recruiting
additional replacements should that become necessary.

Our inability to maintain a number of important contractual relationships could
adversely affect our operations.

     Substantially  all of the  revenues of our  Specialty  Healthcare  Services
operations are derived from management  contracts with acute care hospitals.  At
present, we have approximately 100 management contracts. The contracts generally
have initial terms of three to five years, and many have automatic renewal terms
unless  specifically  terminated.  During the year ending December 31, 2002, the
contract  terms of 32 of our  management  contracts  will  expire,  including 14
contracts  which provide for automatic  one-year  renewals.  The contracts often
provide  for  early  termination  either by the  client  hospital  if  specified
performance   criteria  are  not  satisfied,   or  by  us  under  various  other
circumstances.  Historically,  some contracts have expired without renewal,  and
others have been  terminated  by us or the client  hospital for various  reasons
prior to their scheduled expiration. During 2001, nine contracts expired without
renewal, and an additional 31 contracts were terminated prior to their scheduled
expiration.  Generally,  these contracts were terminated by hospitals because of
the Specialty Healthcare Services legal action,  hospital financial difficulties
and  Medicare   reimbursement  changes  which  reduced  hospital  revenues.  Our
continued  success  is  subject  to our  ability  to  renew or  extend  existing
management  contracts  and obtain new  management  contracts.  Any  hospital may
decide not to  continue  to do  business  with us  following  expiration  of its
management contract,  or earlier if such management contract is terminable prior
to expiration.  In addition,  any changes in the Medicare program or third-party
reimbursement  levels  which  generally  have the effect of limiting or reducing
reimbursement  levels for health  services  provided by  programs  managed by us
could result in the early termination of existing management contracts and could
adversely  affect our ability to renew or extend existing  management  contracts
and to obtain new  management  contracts.  The  termination  or non-renewal of a
material number of management contracts could harm our business.

In addition, a portion of the revenues of our Specialty Pharmacy Services
operations is derived from contractual relationships with retail pharmacies. Our
success is subject to the continuation of these relationships, and termination
of one or more of these relationships could harm our business.

Our business will suffer if we lose relationships with payors.

     We are highly dependent on reimbursement from non-governmental  payors. For
the  fiscal  years  ended   December  31,  2001,   2000  and  1999,  we  derived
approximately 74 percent,  100 percent,  and 100 percent,  respectively,  of our
gross  patient  service  revenue  from  non-governmental  payors,  none of which
individually  accounted  for more than 10  percent of our total  revenues.  Many
payors  seek to  limit  the  number  of  providers  that  supply  drugs to their
enrollees.  From time to time,  payors with whom we have  relationships  require
that we and our competitors bid to keep their business,  and, therefore,  due to
the uncertainties involved in any bidding process, we may either not be retained
or our margins may be adversely  affected.  The loss of a significant  number of
payor  relationships,  or an  adverse  change in the  financial  condition  of a
significant number of payors could result in the loss of a significant number of
patients and harm our business.

Changes in reimbursement rates may cause reductions in the revenues of our
operations.

     As a result of the  Balanced  Budget Act of 1997,  the Centers for Medicare
and Medicaid Services implemented the Outpatient  Prospective Payment System for
all hospital  outpatient  department  services  furnished  to Medicare  patients
beginning  August  2000.  Under  the  system,  a  predetermined  rate is paid to
hospitals for clinic services  rendered,  regardless of the hospital's cost. The
new payment  system does not provide  comparable  reimbursement  for  previously
reimbursed  services,  and the payment rates for many services are  insufficient
for many of our hospital  customers,  resulting in revenue and income shortfalls
for the Wound Care Center(R)  programs managed by us on behalf of the hospitals.
As a result,  during 2001 and 2000,  we  renegotiated  and modified  many of our
management  contracts,  which has  resulted in reduced  revenue and income to us
from the modified contracts and, in numerous cases, contract termination.  These
renegotiations  resulted in reduced revenues of approximately  $8.5 million.  In
addition,  we lost  approximately  $28  million  in  revenues  as the  result of
contract  terminations.  At any time  during  any given  year,  10 percent to 20
percent of hospital  contracts are being  renegotiated.  We expect that contract
renegotiation  and  modification  with  many  of  our  hospital  customers  will
continue,  and this could  result in further  reduced  revenues and income to us
from those  contracts and even contract  terminations.  These results could harm
our business.

     The Wound Care Center(R) programs managed by Specialty  Healthcare Services
on behalf of acute care  hospitals  are  generally  treated as  "provider  based
entities" for Medicare reimbursement  purposes. This designation is required for
the  hospital  based  program  to  be  covered  under  the  Medicare  outpatient
reimbursement system. With the Outpatient  Prospective Payment System,  Medicare
published  criteria for  determining  when programs may be designated  "provider
based entities." Although the implementation date for Provider Based Designation
Regulations for our managed outpatient programs is October 2002, the regulations
continue to be subject to change and further clarification. Specialty Healthcare
Services' 10 managed "under  arrangement"  models,  where we employ the clinical
and  administrative  staff that work in the center,  are potentially at risk for
not meeting the criteria for a "provider  based  entity."  Specialty  Healthcare
Services has been in discussions with its "under arrangement" hospital customers
to  convert  the  programs  to  a  management  model.  The   interpretation  and
application of these criteria are not entirely  clear,  and there is a risk that
some of the programs, in particular the 10 under arrangement models,  managed by
Specialty  Healthcare  Services  could  be  found  not  to  be  "provider  based
entities."  Although we believe that the programs it manages  substantially meet
the current  criteria to be designated  "provider based  entities," a widespread
denial of such designation would harm our business.

The profitability of our Specialty Pharmacy Services operations depends in large
part on the reimbursement we receive from third-party payors. In recent years,
competition for patients, efforts by traditional third-party payors to contain
or reduce healthcare costs, and the increasing influence of managed care payors,
such as health maintenance organizations, have resulted in reduced rates of
reimbursement. If these trends continue, they could harm our business. The
profitability of our specialty pharmacy operations also depends, indirectly, on
reimbursement from third-party payors because our customers seek reimbursement
from third-party payors for the cost of drugs and related medical supplies that
we distribute. Changes in reimbursement policies of private and governmental
third-party payors, including policies relating to the Medicare, Medicaid and
other federally funded programs, could reduce the amounts reimbursed to these
customers for our products and, in turn, the amount these customers would be
willing to pay for our products and services. In addition, where we have direct
relationships with payors, changes in their reimbursement policies may reduce
amounts payable directly to us by such payors. Changes in those reimbursement
policies could affect our customers, which in turn could harm our business.

We are subject to pricing pressures and other risks involved with commercial
payors.

Commercial  payors,  such as managed  care  organizations  and  traditional
indemnity  insurers,  increasingly  are  requesting  fee  structures  and  other
arrangements  providing for health care  providers to assume all or a portion of
the  financial  risk of providing  care.  The lowering of  reimbursement  rates,
increasing  medical  review of bills for  services and  negotiating  for reduced
contract rates could harm our business.  Pricing  pressures by commercial payors
may continue, and our business may be adversely affected by these trends.

Also, continued growth in managed care and capitated plans have pressured health
care providers to find ways of becoming more cost competitive. Managed care
organizations have grown substantially in terms of the percentage of the
population they cover and in terms of the portion of the health care economy
they control. Managed care organizations have continued to consolidate to
enhance their ability to influence the delivery of health care services and to
exert pressure to control health care costs. A rapid increase in the percentage
of revenue derived from managed care payors or under capitated arrangements
without a corresponding decrease in our operating costs could harm our business.

There is substantial competition in our industry, and we may not be able to
compete successfully.

     The principal  competition with our Specialty  Healthcare Services business
consists of specialty  clinics that have been  established  by some hospitals or
physicians.  Additionally,  there are some private companies which provide wound
care services through a hyperbaric  oxygen therapy program format.  In addition,
recently  developed  technologies,  or technologies that may be developed in the
future,  are or may be the basis for  products  which  compete  with our chronic
wound care services. We may not be able to enter into co-marketing  arrangements
with respect to these  products,  and we may not be able to compete  effectively
against such companies in the future.  Our Specialty  Pharmacy Services business
faces competition from other disease  management  entities,  general health care
facilities and service providers,  pharmaceutical  companies,  biopharmaceutical
companies  as  well  as  other   competitors.   Many  of  these  companies  have
substantially  greater  capital  resources  and  marketing  staffs  and  greater
experience in commercializing products and services than we have.

If we are unable to effectively adapt to changes in the healthcare industry, our
business will be harmed.

     Political,  economic and  regulatory  influences  are subjecting the health
care industry in the United States to fundamental change.  Although Congress has
failed to pass  comprehensive  health  care  reform  legislation  thus  far,  we
anticipate  that  Congress and state  legislatures  will  continue to review and
assess  alternative  health care  delivery  and  payment  systems and may in the
future propose and adopt legislation effecting fundamental changes in the health
care delivery system as well as changes to the Medicare  Program's  coverage and
payments  of the drugs and  services  we  provide.  It is  possible  that future
legislation  enacted by Congress or state  legislatures will contain  provisions
that may harm our  business,  or may change the  operating  environment  for our
targeted customers (including hospitals and managed care organizations).  Health
care industry  participants  may react to such  legislation  or the  uncertainty
surrounding  related  proposals  by  curtailing  or deferring  expenditures  and
initiatives,  including those relating to our programs and services.  It is also
possible that future  legislation  either could result in  modifications  to the
nation's  public and private  health care  insurance  systems,  or coverage  for
biopharmaceutical  products,  which  could  affect  reimbursement  policies in a
manner adverse to us, or could encourage  integration or  reorganization  of the
health care  delivery  system in a manner that could  materially  and  adversely
affect our ability to compete or to continue our operations without  substantial
changes.  Other  legislation  relating  to our  business  or to the health  care
industry  may  be  enacted,   including   legislation  relating  to  third-party
reimbursement, and such legislation may have a negative effect on our business.

Our industry is subject to extensive government regulation, and noncompliance by
us or our suppliers, our customers or our referral sources could harm our
business.

     The marketing,  labeling,  dispensing,  storage,  provision and purchase of
drugs,  health  supplies and health  services  including  the  biopharmaceutical
products we provide, are extensively regulated by federal and state governments,
and if we fail or are  accused of failing to comply  with laws and  regulations,
our  business  could  be  harmed.  Our  business  could  also be  harmed  if the
suppliers,  customers or referral  sources we work with are accused of violating
laws or regulations.  The applicable  regulatory  framework is complex,  and the
laws are very broad in scope.  Many of these laws remain open to  interpretation
and have  not  been  addressed  by  substantive  court  decisions.  The  federal
government,  or states in which we operate,  could,  in the  future,  enact more
restrictive  legislation or interpret  existing laws and regulations in a manner
that could  limit the manner in which we can  operate  our  business  and have a
negative impact on our business.

There are a number of state and federal laws and regulations that apply to our
operations including, but not limited to:

o     The federal  "anti-kickback  law" prohibits the offer or solicitation of
      remuneration  in return for the  referral of patients  covered by almost
      all governmental  programs,  or the arrangement or recommendation of the
      purchase  of any item,  facility or service  covered by those  programs.
      The Health  Insurance  Portability  and  Accountability  Act of 1996, or
      HIPAA,  created new  violations for  fraudulent  activity  applicable to
      both  public and private  health care  benefit  programs  and  prohibits
      inducements  to Medicare or Medicaid  eligible  patients.  The potential
      sanctions  for  violations  of these  laws  include  significant  fines,
      exclusion from  participation in the Medicare and Medicaid  programs and
      criminal  sanctions.  Although some "safe harbor" regulations attempt to
      clarify when an arrangement will not violate the anti-kickback  law, our
      business  arrangements  and the  services  we provide may not fit within
      these safe harbors.  Failure to satisfy a safe harbor  requires  further
      analysis of whether  the  parties  violated  the  anti-kickback  law. In
      addition to the  anti-kickback  law,  many states have  adopted  similar
      kickback  and/or  fee-splitting  laws,  which can affect  the  financial
      relationships  we  may  have  with  physicians,  vendors,  other  retail
      pharmacies  and  patients.  The finding of a violation of the federal or
      one of these state laws could harm our business.

o     In 2000,  the  Department  of Health  and Human  Services  issued  final
      regulations implementing the Administrative  Simplification provision of
      HIPAA   concerning  the   maintenance,   transmission  and  security  of
      electronic health information,  particularly  individually  identifiable
      information.   The  regulations,   when  effective,   will  require  the
      development and  implementation  of security and  transaction  standards
      for all electronic  health  information  and impose  significant use and
      disclosure  obligations  on entities  that send or receive  individually
      identifiable  electronic  health  information.  As  a  result  of  these
      regulations,  we anticipate  new  expenditures  in ensuring that patient
      data  kept  on our  computer  networks  are  in  compliance  with  these
      regulations.  While  we  believe  that we will be in  compliance  by the
      current  February 2003  deadline,  the cost of reaching  compliance  may
      harm our business.  Also,  failure to comply with these  regulations  or
      wrongful disclosure of confidential  patient information could result in
      the  imposition  of  administrative  or  criminal  sanctions,  including
      exclusion  from the Medicare and state Medicaid  programs.  In addition,
      if we choose to distribute drugs through new distribution  channels such
      as the  Internet,  we will have to comply  with  government  regulations
      that  apply  to  those  distribution  channels,  which  could  harm  our
      business.

o     The Ethics in Patient Referrals Act of 1989, as amended, commonly referred
      to as the "Stark Law," prohibits physician referrals to entities with
      which the physician or their immediate family members have a "financial
      relationship." A violation of the Stark Law is punishable by civil
      sanctions, including significant fines and exclusion from participation in
      Medicare and Medicaid.

o     State laws  prohibit  the  practice of  medicine,  pharmacy  and nursing
      without a license.  To the extent that we assist  patients and providers
      with  prescribed   treatment  programs,   a  state  could  consider  our
      activities  to  constitute  the  practice of medicine.  In addition,  in
      some  states,  coordination  of  nursing  services  for  patients  could
      necessitate  licensure as a home health agency and/or could  necessitate
      the need to use  licensed  nurses to provide  certain  patient  directed
      services.  If we are found to have  violated  those laws,  we could face
      civil and criminal  penalties and be required to reduce,  restructure or
      even cease our business in that state.

o     Pharmacies  (retail,  mail-order  and  wholesale) as well as pharmacists
      often  must  obtain  state  licenses  to  operate  and  dispense  drugs.
      Pharmacies  must also obtain licenses in some states in order to operate
      and provide goods and services to residents of those  states.  If we are
      unable  to  maintain  our  licenses,   or  if  states  place  burdensome
      restrictions  or  limitations  on  non-resident  pharmacies,  this could
      limit or affect our ability to operate in some  states  which could harm
      our business.

o     Federal and state investigations and enforcement actions continue to focus
      on the health care industry, scrutinizing a wide range of items such as
      joint venture arrangements, referral and billing practices, product
      discount arrangements, home health care services, dissemination of
      confidential patient information, clinical drug research trials and gifts
      for patients or referral sources.

o     The federal False Claims Act encourages private individuals to file suits
      on behalf of the government against health care providers such as us. Such
      suits could result in significant financial sanctions or exclusion from
      participation in the Medicare and Medicaid programs.

There is a delay between our performance of services and our reimbursement.

The health care industry is  characterized  by delays that typically  range
from three to nine  months  between  when  services  are  provided  and when the
reimbursement  or payment for these  services is  received.  This makes  working
capital  management,  including prompt and diligent  billing and collection,  an
important  factor in our  results of  operations  and  liquidity.  Trends in the
industry  may  further  extend the  collection  period  and  impact our  working
capital.

We rely heavily on a limited number of shipping providers, and our business
would be harmed if our rates are increased or our providers are unavailable.

     A  significant  portion of our  revenues  result  from the sale of drugs we
deliver to our patients, and a significant amount of our products are shipped by
mail,   overnight   courier   or  in  person   through   our   community   based
representatives.  The  costs  incurred  in  shipping  are not  passed  on to our
customers and, therefore, changes in these costs directly impact our margins. We
depend  heavily  on these  outsourced  shipping  services  for  efficient,  cost
effective  delivery of our product.  The risks  associated  with this dependence
include:

o     any significant increase in shipping rates;

o     strikes or other service interruptions by these carriers; and

o      spoilage of high cost drugs during shipment, since our drugs often
       require special handling, such as refrigeration.




RISK RELATED TO OUR COMMON STOCK

Possible volatility of stock price in the public market.

The market price of our common stock has  experienced,  and may continue to
experience,  substantial  volatility.  Over the past eight quarters,  the market
price of our common  stock has ranged from a low of $5.06 per share in the third
quarter of 2000 to a high of $22.75 in the first  quarter of 2002.  Many factors
have  influenced the common stock price in the past,  including  fluctuations in
our earnings and changes in our  financial  position,  management  changes,  low
trading volume, and negative publicity and uncertainty  resulting from the legal
actions brought against us. In addition,  the securities markets have, from time
to time, experienced significant broad price and volume fluctuations that may be
unrelated to the operating  performance  of particular  companies.  All of these
factors could adversely affect the market price of our common stock.

Provisions of our articles of incorporation and Minnesota law may make it more
difficult for you to receive a change-in-control premium.

Our  Board's  ability to  designate  and issue up to 10  million  shares of
preferred  stock  and  issue up to 50  million  shares  of  common  stock  could
adversely affect the voting power of the holders of common stock, and could have
the  effect of  making  it more  difficult  for a person  to  acquire,  or could
discourage  a person from seeking to acquire,  control of our  company.  If this
occurred,  you could  lose the  opportunity  to receive a premium on the sale of
your  shares in a change of control  transaction.

     In addition,  the Minnesota  Business  Corporation Act contains  provisions
that would have the effect of  restricting,  delaying or  preventing  altogether
certain  business  combinations  with  any  person  who  becomes  an  interested
stockholder.  Interested  stockholders  include,  among others,  any person who,
together  with  affiliates  and  associates,  acquires  10  percent or more of a
corporation's  voting  stock in a  transaction  which is not  approved by a duly
constituted  committee of the Board of the  corporation.  These provisions could
also limit your ability to receive a premium in a change of control transaction.



                                                                Exhibit 99.2



                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss.1350,
                             AS ADOPTED PURSUANT TO
                SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Curative Health Services, Inc. (the
"Company") on Form 10-Q for the period ended June 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Joseph
Feshbach, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:

      1.    The Report fully complies with the requirements of Section 13(a)
            or 15(d) of the Securities Exchange Act of 1934; and

      2.    The information contained in the Report fairly presents, in all
            material respects, the financial condition and results of operations
            of the Company.



                                 /s/Joseph Feshbach
                                 -----------------------------------------------
                                    Joseph Feshbach
                                    Chief Executive Officer
                                    August 13, 2002





                                                                  Exhibit 99.3

                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss.1350,
                             AS ADOPTED PURSUANT TO
                SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Curative Health Services, Inc. (the
"Company") on Form 10-Q for the period ended June 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas
Axmacher, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:

      1.    The Report fully complies with the requirements of Section 13(a)
            or 15(d) of the Securities Exchange Act of 1934; and

      2.    The information contained in the Report fairly presents, in all
            material respects, the financial condition and results of operations
            of the Company.



                                 /s/Thomas Axmacher
                                 -----------------------------------------------
                                    Thomas Axmacher
                                    Chief Financial Officer
                                    August 13, 2002