U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

     (Mark  One)

     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.

     For    the     quarterly     period     ended     September     30,    2001
                                                       -------------------------
                                       OR

     [ ]  TRANSITION  REPORT  PURSUANT TO SECTION 13 or 15(d) OF THE  SECURITIES
EXCHANGE ACT OF 1934.

For the transition period from                        to
                               -----------------------    ----------------------

                        Commission file number 000-26749

                   NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

        New York                                         11-2581812
--------------------------------------------------------------------------------
(State or Other Jurisdiction of                (IRS Employer Identification No.)
 Incorporation or Organization)

 26 Harbor Park Drive, Port Washington, NY                       11050
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                       (Zip Code)

Registrant's Telephone Number, Including Area Code            (516) 626-0007
                                                   -----------------------------



     Former Name,  Former  Address and Former Fiscal Year, if Changed Since Last
Report.

     Indicate  by check  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

Yes        X                    No
    ----------------               -------------

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

     Indicate by check mark whether the  registrant  has filed all documents and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

Yes                             No
     -------------                 -------------

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     The  number of shares  outstanding  of the  issuer's  Common  Stock,  as of
November 8, 2001 was 7,183,996 shares.

<PAGE>

                                      INDEX

Page

PART I        -   FINANCIAL INFORMATION

ITEM 1        -   CONDENSED FINANCIAL STATEMENTS:                            3

                  CONSOLIDATED BALANCE SHEET as of June 30, 2001             3
                  and September 30, 2001 (unaudited)

                  CONSOLIDATED STATEMENT OF INCOME (unaudited)               4
                  for the three months ended September 30, 2000 and 2001

                  CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)           5
                  for the three months ended September 30, 2000 and 2001

                  CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS       6

ITEM 2        -   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL         13
                  CONDITION AND RESULTS OF OPERATIONS

ITEM 3        -   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT            17
                  MARKET RISK

PART II       -   OTHER INFORMATION                                         18

ITEM 1        -   LEGAL PROCEEDINGS                                         18

ITEM 2        -   CHANGES IN SECURITIES AND USE OF PROCEEDS                 18

ITEM 3        -   DEFAULTS UPON SENIOR SECURITIES                           19

ITEM 4        -   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS       19

ITEM 5        -   OTHER INFORMATION                                         19

ITEM 6        -   EXHIBITS AND REPORTS ON FORM 8-K                          19

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1 - CONDENSED FINANCIAL STATEMENTS

           NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC. AND SUBSIDIARIES


  CONSOLIDATED BALANCE SHEET

<TABLE>
<S>                                                                                 <C>             <C>
                                                                                    June 30         September 30,
                                                                                     2001             2001
                                                                                                    (Unaudited)
Assets
Current:

Cash and cash equivalents (including cash equivalent investments of $1,216,000      $ 12,474,945    $ 5,937,890
     and $1,231,000)
Accounts receivable, less allowance for possible losses of $1,846,827                 30,081,118     33,026,497
     and $2,231,015
Rebates receivable                                                                     7,789,310      7,435,368
Due from affiliates                                                                      986,827        418,111
Deferred tax asset                                                                     1,102,932      1,283,327
Other current assets                                                                   1,003,709        992,837
---------------------------------------------------------------------------------------------------------------
     Total current assets                                                             53,438,841     49,094,030
  Property, equipment and software development costs, net                              8,583,890      9,044,404
  Due from affiliates                                                                  3,831,621      3,496,443
  Customer relationships, net of accumulated amortization of $39,027 and $69,528         265,973        235,472
  Goodwill                                                                            12,943,502     12,943,502
  Deferred tax asset                                                                           -         27,691
  Other Assets                                                                            45,737         45,446
------------------------------------------------------------------------------------------------------------------------------------
     Total Assets                                                                   $ 79,109,564    $74,886,988
------------------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
  Current Liabilities:
  Accounts payable and accrued expenses                                             $ 57,645,563    $53,343,478
  Current portion of capital lease obligations                                           542,094        546,672
  Loans payable-current                                                                  110,426         29,077
  Due to officer/stockholder                                                             541,630        276,633
  Due to affiliates                                                                      343,568         10,318
  Income taxes payable                                                                         -        453,031
  Other current liabilities                                                            1,345,533        398,986
------------------------------------------------------------------------------------------------------------------------------------
     Total current liabilities                                                        60,528,814     55,058,195
  Capital lease obligations, less current portion                                      1,333,349      1,197,697
  Long term loans payable and other liabilities                                           72,712         47,300
  Deferred tax liability                                                               1,702,470      1,876,835
------------------------------------------------------------------------------------------------------------------------------------
     Total liabilities                                                                63,637,345     58,180,027
------------------------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies
Stockholders' equity:
  Preferred stock $.10 par value; 10,000,000 shares authorized, none outstanding               -              -
  Common Stock, $.001 par value, 25,000,000 shares authorized, 7,312,496 and               7,313          7,376
    7,374,996 shares issued and 7,121,496 and 7,183,996 outstanding
  Additional paid-in-capital                                                          13,254,530     13,504,467
  Retained earnings                                                                    3,254,143      4,243,135
  Treasury stock at cost, 191,000 shares                                                (743,767)      (743,767)
  Notes receivable - stockholders                                                       (300,000)      (304,250)
------------------------------------------------------------------------------------------------------------------------------------
     Total stockholders' equity                                                       15,472,219     16,706,961
------------------------------------------------------------------------------------------------------------------------------------
     Total Liabilities and Stockholders' Equity                                     $ 79,109,564    $74,886,988
------------------------------------------------------------------------------------------------------------------------------------

      See accompanying condensed notes to consolidated financial statements
</TABLE>

<PAGE>

           NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENT OF INCOME
                                  (Unaudited)
<TABLE>
<S>                                                    <C>                <C>
                                                       Three months ended
                                                          September 30,
                                                         2000              2001
                                                         ----              ----

Revenues                                               $55,864,164       $80,644,702
Cost of claims                                          51,267,049        73,391,879
----------------------------------------------------------------------------------------------

Gross Profit                                             4,597,115         7,252,823

Selling, general and administrative expenses*            4,303,425         5,982,441
----------------------------------------------------------------------------------------------

Operating income                                           293,690         1,270,382

Other income, net                                          213,640           135,889
----------------------------------------------------------------------------------------------

Income before income taxes                                 507,330         1,406,271
Provision for income taxes                                 266,000           417,279
----------------------------------------------------------------------------------------------

Net Income                                               $ 241,330         $ 988,992
----------------------------------------------------------------------------------------------

Earnings per common share:
    Basic                                                   $ 0.03            $ 0.14
----------------------------------------------------------------------------------------------
    Diluted                                                 $ 0.03            $ 0.13
----------------------------------------------------------------------------------------------

Weighted average number of common shares outstanding:
    Basic                                                7,038,887         7,143,235
--------------------------------------------------------------------------------------------
    Diluted                                              7,038,887         7,473,537
--------------------------------------------------------------------------------------------


* Includes amounts charged by affiliates aggregating:    $ 959,299         $ 830,548
--------------------------------------------------------------------------------------------
</TABLE>
      See accompanying condensed notes to consolidated financial statements

<PAGE>


           NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<S>                                                                                      <C>                        <C>
                                                                                                  Three months ended
                                                                                                    September 30,
                                                                                             2000                     2001
                                                                                             ----                     ----
Cash flows from operating activities:
              Net income                                                                  $  241,330                $ 988,992
              Adjustments to reconcile net income to net cash used in operating
              activities:
              Depreciation and amortization                                                  567,729                  685,225
              Loss on disposal of capital assets                                                   -                    8,709
              Bad debt expense and allowance for possible losses                             181,990                  384,188
              Compensation expense accrued to officer/stockholder                            110,380                 (264,997)
              Deferred income taxes                                                         (130,317)                 (33,721)
              Interest accrued on stockholders' loans                                         (6,375)                  (4,250)
              Changes in assets and liabilities:
                (Increase) decrease in:
                 Accounts receivable                                                      (2,933,428)              (3,329,567)
                 Rebates receivable                                                          (47,113)                 353,942
                 Other current assets                                                        (94,533)                   3,832
                 Due to/from affiliates                                                     (100,290)                 570,643
                 Other assets                                                                 46,998                   (1,929)
                Increase (decrease) in:
                 Accounts payable and accrued expenses                                      (319,637)              (4,302,083)
                 Income taxes payable                                                        265,493                  453,031
                 Other liabilities                                                            45,151                 (696,547)
----------------------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities                                                     (2,172,622)              (5,184,532)
----------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
                Capital expenditures                                                        (850,352)              (1,115,687)
                 Proceeds from disposal of capital assets                                          -                    1,000
                Acquisition of PAI, net of cash acquired                                  (4,487,006)                       -
                Interest received on notes from stockholders                                  39,100                        -
----------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                     (5,298,258)              (1,114,687)
----------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
                Repayment of debt and capital lease obligations                             (120,562)                (237,836)
----------------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities                                                       (120,562)                (237,836)
----------------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents                                                 (7,591,442)              (6,537,055)
Cash and cash equivalents at beginning of period                                          15,724,730               12,474,945
----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period                                               $ 8,133,288               $5,937,890
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

      See accompanying condensed notes to consolidated financial statements
<PAGE>


           NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unadudited)

     1. BASIS OF PRESENTATION

     The unaudited  consolidated  financial  statements  include the accounts of
National Medical Health Card Systems,  Inc. (the "Company") and its wholly owned
subsidiaries,  Pharmacy Associates, Inc. ("PAI"), Interchange PMP, Inc. ("PMP"),
National Medical Health Card IPA, Inc. ("IPA") and Specialty Pharmacy Care, Inc.
("Specialty").  Unless the context otherwise requires,  references herein to the
"Company"  refer  to the  Company  and  its  subsidiaries,  PAI,  PMP,  IPA  and
Specialty,  on a  consolidated  basis.  All material  intercompany  balances and
transactions have been eliminated in the consolidation.

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared  by the  Company  in  accordance  with  generally  accepted  accounting
principles  for interim  financial  information  and  substantially  in the form
prescribed by the Securities  and Exchange  Commission in  instructions  to Form
10-Q and Article 10 of Regulation S-X.  Accordingly,  they do not include all of
the  information  and  footnotes  required  by  generally  accepted   accounting
principles for complete  financial  statements.  In the opinion of the Company's
management,  the  September  30,  2001  and  2000  unaudited  interim  financial
statements include all adjustments,  consisting of normal recurring adjustments,
necessary for a fair  presentation of results for these interim periods.  In the
opinion of the Company's management, the disclosures contained in this Form 10-Q
are  adequate to make the  information  presented  not  misleading  when read in
conjunction with the Notes to Consolidated  Financial Statements included in the
Company's  Form 10-K for the year ended June 30, 2001. The results of operations
for the  three  month  period  ended  September  30,  2001  are not  necessarily
indicative of the operating results to be expected for the full year.

     Certain  amounts in the prior period have been  reclassified  to conform to
the current period  presentation  (See Note 8). For  information  concerning the
Company's  significant  accounting policies,  reference is made to the Company's
Annual  Report on Form  10-K,  for the year  ended  June 30,  2001 (the  "Annual
Report").

     2. BUSINESS ACQUISITIONS

     Pursuant  to the  terms of the  Agreement  and Plan of Merger  between  the
Company and PAI, dated July 20, 2000 (the "PAI Agreement"), the Company acquired
PAI, a regional  pharmacy  benefit  management  company  operating  in Arkansas,
Louisiana,   and  Mississippi.   Under  the  terms  of  the  merger   agreement,
stockholders  of PAI  received  an  aggregate  of $6 million in cash and 400,000
shares of the  Company's  Common  Stock,  which was  valued at  $849,920  on the
acquisition date. The acquisition was accounted for under the purchase method of
accounting and the results of PAI's operations were included in the consolidated
financial  statements  commencing with the  acquisition  date. The excess of the
acquisition  costs over the fair value of  identifiable  net assets acquired was
$6,345,471,   which   consists  of  the  following   components:   (i)  customer
relationships  valued at  $131,000;  which will be amortized  entirely  over the
first  year;  (ii)  non-compete  contracts  valued  at  $44,400,  which  will be
amortized over five (5) years using the  straight-line  method of  amortization;
and (iii) goodwill of $6,170,071.  PAI stockholders may also receive  additional
consideration  of up  to  $2  million  payable  in a  combination  of  cash  and
unregistered Common Stock over a two-year period if certain financial targets of
PAI  are met  which  will be  accounted  for as an  addition  to  goodwill.  The
financial  targets  were  achieved  for the first year,  so $750,000 in cash and
$250,000 in Common Stock (62,500 shares) was paid and issued in August, 2001.

     On March 5, 2001, the Company acquired through its wholly owned subsidiary,
Interchange  PMP,  Inc.  substantially  all of the  assets  and  certain  of the
liabilities of Provider Medical Pharmaceutical, LLC ("PMP"), an Oklahoma limited
liability  company,  pursuant to an Asset Purchase  Agreement among the Company,
PMP and the members of PMP. The assets  acquired from PMP included,  among other
things, PMP's accounts receivable and intellectual property,  PMP's rights under
various contracts and the goodwill value of PMP's business.

     The purchase  price for the assets  consisted  of: (i)  $4,000,000 in cash,
(ii) the  satisfaction by the Company of PMP's bank  indebtedness of $1,255,035,
and  (iii)  cancellation  of the  $1,500,000  promissory  note  from  PMP to the
Company,  dated January 16, 2001. Part of the cash portion of the purchase price
was paid into an escrow  account to  provide  security  for the  indemnification
obligations  of PMP  and its  members  to the  Purchaser.  The  acquisition  was
accounted for under the purchase  method of accounting  and the results of PMP's
operations were included in the consolidated  financial  statements,  commencing
with the  acquisition  date. The excess of the  acquisition  costs over the fair
value of identifiable net assets acquired was $6,474,659,  which consists of the
following components:  (i) customer relationships valued at $305,000, which will
be amortized over 2.5 years using the straight-line method of amortization;  and
(ii)  goodwill  of  $6,169,659.  The  Company  will  be  required  to  pay up to
$1,000,000  of  additional  cash  consideration  if  certain  financial  targets
relating  to PMP's  business  are met over the next three  years,  which will be
accounted for as an addition to goodwill.

     The  summarized  unaudited pro forma  results of  operations  are set forth
below for the three months  ended  September  30, 2000  assuming the PAI and PMP
acquisitions had occurred as of the beginning of the period.

                                                        Three Months Ended
                                                        September 30, 2000
                                                        ------------------
Revenues                                                $ 65,144,224
Net income                                                 $ 493,826
Net income per common share:
  Basic                                                        $0.07
  Diluted                                                      $0.07
Pro  forma  weighted  average  number  of
common  shares outstanding:
  Basic                                                    7,038,887
  Diluted                                                  7,038,887

     Pro forma adjusted net income per common share, including acquisitions, may
not be  indicative  of actual  results,  primarily  because  pro forma  earnings
include  historical  results of  operations  of the  acquired  entity and do not
reflect any cost  savings or  potential  sales  erosion that may result from the
Company's integration efforts.

     3. STOCK OPTIONS

     During the three  months ended  September  30,  2001,  the Company  granted
30,612 stock options  under the 1999 Stock Option Plan (the  "Plan").  The total
number of shares of common stock  reserved by the Company for issuance under the
Plan is  1,650,000  plus an  indeterminable  number of  shares  of common  stock
issuable upon the exercise of "reload options." There are no options outstanding
that contain the "reload" provision. Shares issuable pursuant to options granted
under the Plan as of September 30, 2001 equal 1,243,838.

     During the three  months  ended  September  30,  2001,  the total number of
incentive  options  granted under the Plan, net of incentive  options  forfeited
during the same  period,  were  21,862.  The options are  exercisable  at prices
ranging  from $3.50 to $7.50 and  terminate  between four and six years from the
grant date.  Of the 1,124,838  incentive  options  granted to date,  561,000 are
currently in the money, with exercise prices lower than the current stock price,
and of these, 111,010 are currently exercisable. None of these options have been
exercised to date. The Company has also granted to date nonstatutory  options to
its outside  Directors  (104,000) and the majority  shareholder  of PMP (15,000)
under the Plan to purchase up to an aggregate of 119,000  shares of Common Stock
at prices ranging from $1.67 to $6.00 per share.  These options  terminate after
five  years.  Of these,  44,000  are  currently  in the  money,  and  35,080 are
currently  exercisable;  the balance are exercisable  over three years after one
year from the grant date. None of the currently exercisable nonstatutory options
have been exercised to date.

     On February 20, 2001, the Company granted  500,000  incentive stock options
to Mr.  Brodsky,  the  Company's  Chairman of the Board,  under the Plan.  These
options are  exercisable at $1.84 per share over a five-year  period starting on
the grant date.  The options  terminate  February  20, 2006.  These  options are
included in the discussion above.


     4. EARNINGS PER SHARE

     A reconciliation  of shares used in calculating  basic and diluted earnings
per share follows:
<TABLE>
<S>                                                                      <C>               <C>
                                                                         Three months ended September 30,
                                                                              2000            2001
                                                                              ----            ----
     Basic weighted average # of shares outstanding                      7,038,887         7,143,235
     Effect of assumed conversion of employee stock options                      -           289,542
     Contingently issuable shares (see Note 2)                                   -            40,760
                                                                         ---------          --------
     Diluted weighted average # of shares outstanding                    7,038,887         7,473,537
                                                                         =========         =========
</TABLE>

<TABLE>
<S>                                                                   <C>             <C>
     5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

     Accounts payable and accrued expenses consist of the following:

                                                                        June 30,         September 30,
                                                                          2001              2001
                                                                          ----              ----
     Claims payable                                                    $46,615,563       $44,267,733
     Rebates payable to sponsors                                         6,479,069         5,500,319
     Other payables                                                      4,550,931         3,575,426
                                                                        ----------       -----------
                                                                       $57,645,563       $53,343,478
                                                                       ===========       ===========
</TABLE>

     6. RELATED PARTY TRANSACTIONS

     Certain costs paid to affiliates were  capitalized as software  development
costs.  For the three months ended  September  30, 2001,  the amount  charged by
affiliates and capitalized was approximately $95,000.

     For the  periods  presented,  certain  general,  administrative  and  other
expenses reflected in the financial  statements  include  allocations of certain
corporate  expenses from  affiliates  which take into  consideration  personnel,
estimates  of the time spent to provide  services  or other  appropriate  bases.
These  allocations   include  services  and  expenses  for  information  systems
maintenance,  financial  consulting,  employee benefits  administration,  legal,
communications and other miscellaneous services.

     Management  believes the  foregoing  allocations  were made on a reasonable
basis.  Although these allocations do not necessarily  represent the costs which
would  have been or may be  incurred  by the  Company  on a  stand-alone  basis,
management believes that any variance in costs would not be material.

     General and administrative expenses related to transactions with affiliates
included in the statement of income are:
<TABLE>
<S>                                                             <C>                 <C>

                                                                Three months ended September 30,
                                                                        2000            2001
                                                                        ----            ----
     Software maintenance and related services                    $    335,892      $   253,958
     Management and consulting fees                                    306,623          207,883
     Administrative and bookkeeping services and supplies              206,909          205,424
     Rent and utilities                                                109,875          163,283
                                                                   ------------         --------
                                                                  $    959,299      $   830,548
                                                                  ============         ========
</TABLE>
     The  Company  has accrued  approximately  $73,000 of  interest  income from
affiliates,  arising from two loans,  for the three months ended  September  30,
2001.  This  compares  to  approximately  $94,000  for the  three  months  ended
September  30,  2000.  The two  loans  are as  follows:  (i)  Sandata,  Inc.,  a
corporation of which Mr.  Brodsky is the Chairman of the Board,  Treasurer and a
principal  stockholder  ("Sandata"),  owed the Company  $500,000  principal plus
interest  pursuant to a  promissory  note dated May 31,  2000,  made  payable by
Sandata to the order of the Company.  The Note was paid off in August 2001; (ii)
A non-recourse promissory note dated July 31, 2000, made payable to the order of
the Company by P.W. Capital,  LLC, a company affiliated with Mr. Brodsky, in the
amount of $3,890,940.  Such note is payable in annual  installments of $400,000,
consisting  of principal and interest at the rate of 8-1/2% per annum on each of
the first and second  anniversary  dates,  with the total  remaining  balance of
principal  and  interest  due  and  payable  on  July  31,  2003.  The  note  is
collateralized  by  1,000,000  shares  of $.001 par  value  Common  Stock of the
Company  registered  in the name of Mr.  Brodsky and is subject to his  personal
guarantee. The first $400,000 payment due under the Note as of July 31, 2001 was
satisfied  by  offsetting  an equal  amount owed to Mr.  Brodsky by the Company.
Effective  July 31, 2001, the interest rate on the Note was changed to the prime
rate in effect from time to time.

     The Company currently occupies  approximately  26,500 square feet of office
space  located at 26 Harbor Park  Drive,  Port  Washington,  New York 11050 (the
"Facility").  The  Company  subleases  the  Facility  from BFS  Realty,  LLC, an
affiliate of the Company's chairman (the "Affiliate").  The Affiliate leases the
Facility from the Nassau County  Industrial  Development  Agency,  pursuant to a
lease (the  "Lease")  which was entered into by that agency and the Affiliate in
July 1994.  The Lease  expires in March  2005.  The  Affiliate  has the right to
become the owner of the Facility  upon  expiration  of the Lease.  The Affiliate
subleases a portion of the Facility to the Company.  The Company  currently pays
base rent to the  Affiliate  in the amount of $336,780  per year,  plus  monthly
expenses  for  maintenance,  real estate  taxes,  utilities  and the like to the
providers of these services.  The base rent increases 5% annually. The Affiliate
also receives rent from other companies that occupy space in the Facility,  some
of which are affiliated with the Company's  chairman.  The Company believes that
the Facility is adequate for current  purposes.  Leasehold  improvements made to
this space during the three months ended  September 30, 2001, was  approximately
$20,000.

     7. MAJOR CUSTOMERS AND PHARMACIES

     For the three months ended  September  30, 2000,  approximately  19% of the
consolidated  revenues of the Company were from one plan  sponsor  administering
multiple plans. For the three months ended September 30, 2001, approximately 14%
of  the  consolidated  revenues  of the  Company  were  from  one  plan  sponsor
administering  multiple  plans.  Amounts due from this sponsor at September  30,
2001 approximated $1,762,000.

     For the three months ended September 30, 2000 and 2001,  approximately  34%
and 26% of the cost of  claims  were  from two  pharmacy  chains,  respectively.
Amounts  payable  to these  two  pharmacy  chains  at  September  30,  2001 were
approximately $9,744,000.

     8. RECENTLY ISSUED ACCOUNTING STANDARDS

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
Nos. 141 and 142,  Business  Combinations  and  Goodwill and Other  Intangibles,
respectively.  FASB 141 requires all business combinations  initiated after June
30, 2001 to be accounted for using the purchase method. Under FASB 142, goodwill
is no longer subject to  amortization  over its estimated  useful life.  Rather,
goodwill is subject to at least an annual  assessment for impairment by applying
a fair-value based test.  Additionally,  an acquired  intangible asset should be
separately recognized if the benefit of the intangible asset is obtained through
contractual  or other  legal  rights,  or if the  intangible  asset can be sold,
transferred,  licensed, rented or exchanged, regardless of the acquirer's intent
to do so. The Company has adopted  these FASB's as of July 1, 2001 and has until
December 31, 2001 to fully  implement the impairment  testing.  The Company does
not believe the adoption of FASB 142 will require an  impairment to the goodwill
recorded on the accompanying balance sheet.

     The consolidated  financial  statements reflect, for all periods presented,
the adoption of the classification requirements pursuant to Emerging Issues Task
Force ("EITF") 00-14, Accounting for Certain Sales  Incentives-Coupons,  Rebates
and  Discounts,  which was  effective in the  Company's  third  quarter of 2001.
Accordingly,  the Company  reduced cost of claims for the periods  presented for
rebates received from pharmaceutical  manufacturers and reduced revenues for the
rebates which are shared with the Company's customers. Historically, the Company
recorded  the net  difference  between  the rebates  received  and paid out as a
reduction to cost of claims.

     9. SUPPLEMENTAL CASH FLOW INFORMATION

     During the three months ended  September  30, 2000 and  September 30, 2001,
the Company  paid  $59,368 and $60,255 in interest  and  $130,826 and $42,871 in
income taxes, respectively. During the three months ended September 30, 2000, in
a non-cash  transaction,  the Company issued 400,000 shares of its  unregistered
Common  Stock,  valued at $849,920,  as part of the  acquisition  of PAI in July
2000.  During the three months ended  September 30, 2001,  in a second  non-cash
transaction,  the Company issued 62,500 shares of its unregistered Common Stock,
valued at $250,000,  as additional  consideration  to the stockholders of PAI in
August  2001.  (See  Note 2  above  for  additional  information  about  the PAI
agreement).
<PAGE>


           NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC. AND SUBSIDIARIES

ITEM 2  - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS


Results of Operations


Three  Months  Ended  September  30, 2001  Compared to Three  Months  Ended
September 30, 2000

     Revenues increased $24.8 million,  or approximately 44%, from $55.8 million
for the three months ended  September  30, 2000,  to $80.6 million for the three
months ended September 30, 2001. Of the increase,  $6.7 million, or 27%, was due
to the inclusion of revenues  from PMP in the quarter ended  September 30, 2001.
$1.8 million of the increase was due to revenues  related to new sponsors or new
services  offered  during the quarter ended  September 30, 2001. The majority of
the balance of the increase,  or $16.3  million,  was due primarily to increased
revenues from other existing  sponsors as a result of several factors  including
higher charges relating to increased cost of  pharmaceuticals,  new drugs,  plan
participant  growth and an  increase  in the  average  number of claims per plan
participant.

     Revenues for the quarter for both years were adjusted  based on EITF 00-14,
Accounting  for Certain Sales  Incentives - Coupons,  Rebates and Discounts (See
Note 8). The  financial  impact of this is to reduce  revenues  by the amount of
rebates to be paid to customers and reduce cost of claims by the gross amount of
rebates received by the Company. Previously the net difference between the gross
amount received by the Company and the amount paid to customers was treated as a
reduction in cost of claims with no effect on revenue. The impact of this change
was to reduce  revenue and cost of claims by $1.1  million and $1.4  million for
the quarters ended September 30, 2000 and 2001, respectively.

     Cost of claims increased $22.1 million,  or  approximately  43%, from $51.3
million for the three months ended  September 30, 2000, to $73.4 million for the
three months ended September 30, 2001. PMP accounted for $6.0 million, or 27% of
the increase. The balance of the increase is related to the increased revenue as
described  above.  As a percentage of revenues,  cost of claims  decreased  from
91.8% to 91.0% for the three months ended  September  30, 2000 and September 30,
2001,  respectively.  The decrease relates primarily to the lower cost of claims
achieved  by PAI and PMP which were  approximately  89% during the three  months
ended September 30, 2001, and a $0.4 million increase in gross rebates received.

     Gross  profit  increased  from $4.6  million,  for the three  months  ended
September  30, 2000,  to $7.3 million for the three months ended  September  30,
2001;  a $2.7  million,  or 58%  increase.  In addition  to the  revenue  volume
increase,  PMP  accounted for $0.8  million,  or 17%, of the  increase,  and the
increase in rebates  accounted for another 9%. Gross profit,  as a percentage of
revenue,  increased  from 8.2% to 9.0% for the three months ended  September 30,
2000 and  September  30,  2001,  respectively.  The increase  year-over-year  is
principally  related  to the  greater  margins  achieved  by PAI  and PMP in the
quarter.  These  increases  were partially  offset by declines  elsewhere in the
Company due to competitive pressures.

     Selling,  general,  and  administrative  expenses,  which  include  amounts
charged by affiliates,  increased $1.7 million,  or approximately  39% from $4.3
million for the three  months ended  September  30, 2000 to $6.0 million for the
three months ended  September 30, 2001.  Approximately  17% of the increase,  or
$0.3 million,  was related to the inclusion of PMP in the consolidated  numbers.
The  balance of the growth in these  expenses  was  principally  related to four
areas: (i) an approximate $589,000 increase in expenditures related to increases
in compensation and benefits,  primarily associated with new employees including
senior  management;  (ii) an approximate  $161,000  increase in depreciation and
amortization  expenses  related to increased  hardware  procurement and software
development in prior periods;  (iii) an approximate $325,000 increase in the use
of outside consultants to primarily update the Company's information  technology
infrastructure;  and (iv) an  approximate  $123,000  reduction  in the amount of
internal salaries that were capitalized related to enhancements to the Company's
reporting system.

     General  and  administrative   expenses  charged  by  affiliates  decreased
approximately $129,000, or 13%, year-over-year from $959,000 to $831,000 for the
three months ended September 30, 2000 and September 30, 2001, respectively.  The
majority of the decrease related to reduced information  technology services and
management and consulting  fees procured from affiliated  companies.  The use of
outside  consultants for the most part replaced the use of affiliated  companies
to update the information technology infrastructure.

     Other  income,  net,  decreased  by  approximately  $78,000,  or 36%,  from
approximately  $214,000  for the three  months  ended  September  30,  2000,  to
approximately $136,000 for the three months ended September 30, 2001. The reason
for the net decrease was a $75,000  decrease in interest income related to lower
cash  balances  due to the  acquisitions  of PAI and PMP,  as well as due to the
lower interest rates in effect as of September 30, 2001 as compared to September
30, 2000.

     Income before income taxes increased  approximately $899,000, or 177%, from
approximately  $507,000  for the three  months  ended  September  30,  2000,  to
approximately  $1,406,000  for the three months ended  September  30, 2001.  The
primary  reason for the increase  was the  increased  gross margin  generated as
described  above.  EBITDA (earnings  before  interest,  taxes,  depreciation and
amortization)  for  these  same  periods  showed  a  increase  of  approximately
$1,094,000,  or 127%,  from  approximately  $861,000  for the three months ended
September  30,  2000 to  approximately  $1,956,000  for the three  months  ended
September  30,  2001.  The  majority of the  increase is due to the $1.0 million
increase in operating  income from  September  30, 2001 as compared to September
30,  2000.  The  balance of the  increase is due to an  approximate  $165,000 of
incremental  depreciation  related to new assets procured during the year, which
was partially  offset by $47,000 of intangibles  amortization  of PAI and PMP in
the  quarter  ended  September  30,  2000.  Per FASB 142,  the Company no longer
amortizes goodwill as of July 1, 2001 (see Note 8).

     The  effective  tax rate  decreased  from 52% for the  three  months  ended
September  30, 2000 to 30% for the three months ended  September  30, 2001.  The
decrease stemmed primarily from the non-deductibility,  for tax purposes, of the
goodwill  amortization  related to the  acquisition  of PAI in the three  months
ended  September  30,  2000.  Effective  July 1, 2001 the  Company  is no longer
amortizing goodwill pursuant to FASB 142 which results in lowering the effective
rate due to the  fact  that  the  goodwill  related  to the PMP  acquisition  is
deductible for tax purposes (See Note 8).

Liquidity and Capital Resources

     The Company's  primary cash  requirements are for capital  expenditures and
operating  expenses,  including cost of  pharmaceuticals,  software and hardware
upgrades and the funding of accounts receivable.  The Company also requires cash
for potential  acquisitions of other pharmacy benefit management companies or of
companies providing related services.  As of September 30, 2001, the Company had
a working  capital  deficit of $6.0  million,  as compared to a working  capital
deficit  of $7.1  million  as of June  30,  2001.  The  primary  reason  for the
improvement  in  working  capital  was the  profitability  generated  during the
quarter ended September 30, 2001.

     Net cash used in operating activities was $2.2 million for the three months
ended September 30, 2000, as compared to $5.2 million for the three months ended
September  30, 2001.  For the three months ended  September  30, 2001,  accounts
payable  decreased  by $4.3  million as the Company  made  payments to bring its
vendors more current, as well as a settlement payment to one of its former major
sponsors.  At the same time, accounts receivable increased by $3.3 million, thus
the  combination  of these two factors used cash by $7.6  million.  This differs
from the three  months  ended  September  30,  2000  where  accounts  receivable
increased by $2.9 million,  but accounts payable only decreased by $0.3 million,
a difference in the use of cash of $4.4 million during the two periods.

     During the three month periods  ended  September 30, 2000 and September 30,
2001,  net cash was used in operating  activities,  however,  historically,  the
timing of the Company's  accounts  receivable and accounts payable has generally
been a net source of cash from operating  activities.  This is the result of the
terms of trade in place with plan  sponsors,  on the one hand, and the Company's
pharmacy network, on the other hand. These terms generally lead to the Company's
payments  to  participating  pharmacies  being  slower  than  its  corresponding
collections from plan sponsors.  The Company believes that this situation is not
unusual in the pharmacy  benefit  management  industry and expects to operate on
similar terms for the  foreseeable  future.  However,  there can be no assurance
that such terms of trade will continue in the future; and if they were to change
materially,  the Company could require  additional  working  capital  financing.
There can be no assurance that such  financing  could be obtained at rates or on
terms  acceptable  to the  Company,  if at all.  If such  terms of trade were to
change  materially,  and/or if the  Company  were  unable  to obtain  additional
working  capital  financing,  there  could be a material  adverse  effect on the
Company's business, financial condition or results of operations.

     Net cash used in investing activities was $5.3 million for the three months
ended  September 30, 2000 as compared to $1.1 million for the three months ended
September 30, 2001. The primary difference in the two periods is the acquisition
of PAI in the period ended  September 30, 2000.  The net cash outlay for PAI was
$4.5 million, representing the initial payment of $6.0 million plus $0.2 million
of related expenses, less PAI's cash balance at July 20, 2000 of $1.7 million.

     Net cash used in financing activities increased from approximately $121,000
for the three months ended September 30, 2000 to approximately  $238,000 for the
three months ended  September 30, 2001.  The increase  relates to certain leases
that were acquired with the acquisitions of PAI and PMP.

     During  fiscal year 2000,  the Company  entered  into three  capital  lease
transactions  for hardware and  software.  The purchase  price of these  capital
assets was  $2,537,730.  One  hardware  lease is for a term of 57  months,  with
monthly payments of $40,322.  Another hardware lease is for a term of 60 months,
with monthly payments of $3,245.  The software lease is for a term of 33 months,
with monthly payments of $13,662.  The principal  balance of these three capital
leases as of September 30, 2001 was $1,744,369.

     PAI  stockholders  were  eligible to receive up to $1,000,000 in additional
consideration  payable  in  combination  of cash and  Common  Stock  if  certain
financial targets of PAI were met for the fiscal year ended June 30, 2001. These
targets were  achieved,  and $750,000 in cash was paid, and 62,500 shares of the
Company's  Common  Stock  valued  at $4.00  per  share  were  issued  to the PAI
stockholders  at the end of August 2001.  The PAI  stockholders  are eligible to
receive one more payment of up to $1 million if certain financial targets of PAI
are met for the fiscal year ended June 30, 2002.

     The members of PMP are eligible to receive  additional  consideration of up
to $1,000,000 if certain  financial  targets  related to PMP's  business are met
over the next three years.

     In  February  1998,   the  Company   entered  into  an  agreement  with  an
unaffiliated  third  party  for  computer  software  products  and  professional
services.  The agreement  required the Company to pay an initial license fee. In
addition, if certain milestones are met, based on the number of processed claims
as defined in the  agreement,  the initial  license fee  increases  in specified
increments.  To date,  three such milestones  have been met,  resulting in a 75%
increase in the license fee. The agreement  also provides for the annual payment
of a fee for  maintenance  and  updating  services  equal to 18% of the  initial
license fee, as defined.  It is anticipated  that,  based on internal growth and
the PAI and PMP  acquisitions,  at least one  additional  milestone  will be met
during calendar year 2001. If the two remaining milestones are reached, the cash
outlay by the Company would be $200,000.

     The Company anticipates that current cash positions,  after the PAI and PMP
acquisitions  and the  repayment  of certain  affiliate  and  shareholder  debt,
together  with  anticipated  cash flow from  operations,  will be  sufficient to
satisfy the Company's  contemplated  cash  requirements  for at least 24 months.
This is based  upon  current  levels of  capital  expenditures  and  anticipated
operating  results for the next 24 months.  However,  it is one of the Company's
stated goals to acquire other pharmacy benefit management  companies,  evidenced
by the two  already  acquired.  This  will  require  cash and  depending  on the
Company's  evaluation of future  acquisitions,  additional cash may be required.
Therefore,  the  Company has  obtained a  $4,000,000  revolving  credit line for
acquisitions with its bank. The Company has no current  borrowings  against this
credit line. The Company is also currently negotiating a larger revolving credit
line, to meet  anticipated  future needs.  In the event that the Company's plans
change  or its  assumptions  prove  to be  inaccurate,  or that  the  additional
financing  is not  consummated,  or the  proceeds of the  financing  prove to be
insufficient to fund operations and acquisitions,  the Company could be required
to seek additional financing sooner than anticipated.  There can be no assurance
that such  financing  could be obtained at rates or on terms  acceptable  to the
Company, if at all.

Inflation

     Management  does not  believe  that  inflation  has had a material  adverse
impact on the Company's net income.

Forward-Looking Statements

     This report  contains  forward-looking  statements  which involve known and
unknown risks and  uncertainties or other factors that may cause actual results,
performance or achievements to be materially  different from any future results,
performance  or  achievements  expressed  or  implied  by  such  forward-looking
statements. When used herein, the words "may", "could", "estimate",  "believes",
"anticipates",   "thinks",   "intends",   "will  be",  "expects",   and  similar
expressions  identify  forward-looking  statements  within  the  meaning  of the
Private Securities Litigation Reform Act of 1995. For a discussion of such risks
and  uncertainties,  including  but not  limited  to risks  relating  to demand,
pricing,  government regulation,  acquisitions and affiliations,  the market for
PBM  services,  competition  and other  factors,  readers are urged to carefully
review and consider  various  disclosures  made by the Company in the  Company's
Annual Report for the most recently ended fiscal year, and other  Securities and
Exchange Commission filings.

For more information, visit the Company's website at www.NMHC.com.

Item 3     -      Quantitative and Qualitative Disclosures
                  about Market Risk

Not applicable.


<PAGE>


           NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION


ITEM 1 - LEGAL PROCEEDINGS

     An action was commenced against the Company on December 8, 1998 by the West
Contra Costa Unified School  District (the "School  District") and an individual
plaintiff in the State of California. The case was subsequently moved to Federal
court. The complaint alleged,  among other things, that the parties entered into
a contract in November  1996, and that the Company  unilaterally  terminated the
contract  on  December  16,  1996.  The  complaint   further  alleged  that  the
termination resulted in the School District incurring  approximately $150,000 in
costs and  $867,000 in  expenses to obtain  coverage  from  December  1996 until
October  1997.  The  complaint  also sought  treble  damages.  While  settlement
documents are currently being  finalized,  the parties have reached an agreement
that  contemplates  the  Company  paying to the  plaintiffs  an  amount  that is
significantly lower than the amount of costs and expenses claimed, and funding a
part of the plaintiffs'  litigation against another  defendant.  The proceeds of
any settlement  with or verdict  against such defendant will be divided  between
the Company and the School District.  Although,  the settlement  papers have not
been  finalized,  the Company  believes that these terms will be the crux of the
agreement.

     An action has been  commenced by a former  executive  of the Company,  Mary
Casale,  who alleges that employees of the Company engaged in sex discrimination
in  violation  of Title  VII of the  Civil  Rights  Act of 1964.  The  matter is
presently  pending before the New York District  Office of the Equal  Employment
Opportunity  Commission  ("EEOC").  The  EEOC  has  made no  findings  or  other
determinations as to the merits of the parties' claims or defenses.  The Company
is being  defended  pursuant  to an  employment  practices  liability  insurance
policy,  the  coverage  of which is subject to various  terms,  conditions,  and
exclusions.   Only  a  preliminary  investigation  into  this  matter  has  been
conducted,  and discovery has not commenced. Ms. Casale has yet to bring suit in
state or federal court, and, thus, could conceivably  assert additional  claims.
The Company denies the material  allegations  Ms. Casale has brought  against it
and intends to defend itself vigorously.

ITEM   2   -    CHANGES    IN    SECURITIES    AND    USE    OF    PROCEEDS

     During the three  months ended  September  30,  2001,  the Company  granted
30,612 stock options  under the 1999 Stock Option Plan (the  "Plan").  The total
number of shares of common stock  reserved by the Company for issuance under the
Plan is  1,650,000  plus an  indeterminable  number of  shares  of common  stock
issuable upon the exercise of "reload options." There are no options outstanding
that contain the "reload" provision. Shares issuable pursuant to options granted
under the Plan as of September 30, 2001 equal 1,243,838.

     During the three  months  ended  September  30,  2001,  the total number of
incentive  options  granted under the Plan, net of incentive  options  forfeited
during the same  period,  were  21,862.  The options are  exercisable  at prices
ranging  from $3.50 to $7.50 and  terminate  between four and six years from the
grant date.  Of the 1,124,838  incentive  options  granted to date,  561,000 are
currently in the money, with exercise prices lower than the current stock price,
and of these, 111,010 are currently exercisable. None of these options have been
exercised to date. The Company has also granted to date nonstatutory  options to
its outside  Directors  (104,000) and the majority  shareholder  of PMP (15,000)
under the Plan to purchase up to an aggregate of 119,000  shares of Common Stock
at prices ranging from $1.67 to $6.00 per share.  These options  terminate after
five  years.  Of these,  44,000  are  currently  in the  money,  and  35,080 are
currently  exercisable;  the balances are exercisable over three years after one
year from the grant date. None of the currently exercisable nonstatutory options
have been exercised to date.

     On February 20, 2001, the Company granted  500,000  incentive stock options
to Mr. Brodsky under the Plan.  These options are exercisable at $1.84 per share
over a  five-year  period  starting on the grant  date.  The  options  terminate
February 20, 2006. These options are included in the discussion above.

     Pursuant  to the terms of the PAI  Agreement,  the Company  issued  400,000
shares of unregistered  Common Stock of the Company to certain PAI  stockholders
at the time of the  acquisition.  The stock issued to the PAI  stockholders  was
valued  at  $849,920.  In August  2001,  the  Company  issued  62,500  shares of
unregistered  Common Stock of the Company to the PAI  stockholders as additional
consideration.  These shares were valued at $250,000. Information concerning the
PAI Agreement,  including the type and amount of  consideration  received by the
Company, is provided in Note 2 of the Condensed Notes to Consolidated  Financial
Statements  in Part I hereof.  The Company was advised that the issuance of such
shares  was  exempt  from  registration  under the  Securities  Act by virtue of
Section 4(2) thereof.

Item 3 - Defaults Upon Senior Securities

None.

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

None.

Item 5 - Other Information

None.

Item 6 - Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit
Number  Description of Exhibit

3.1     Restated Certificate of Incorporation of Health Card (1)
3.2     Certificate of Amendment, filed May 25, 1999, to Certificate of
        Incorporation of Health Card (1)
3.3     Restated Certificate of Incorporation of Health Card, as amended (2)
3.4     Amended and Restated By-Laws of Health Card (1)
4.1     Form of Specimen Common Stock Certificate (1)
4.2     Form of Warrant Agreement, including form of
        Representatives' Warrants (1)
10.1    Mail Service Provider Agreement, dated July 1, 1996, between Health Card
        and Thrift Drug, Inc. d/b/a Express Pharmacy Services (1)
10.2    Amendment to Mail Service Provider Agreement, dated January 1, 1997,
        between Health Card and Thrift Drug, Inc. d/b/a Express Pharmacy
        Services (1)
10.3    Software License Agreement and Professional Service Agreement, dated
        February 18, 1998, between Health Card and Prospective Health, Inc. (1)
10.4    1999 Stock Option Plan (1)
10.5    Letter, dated January 31, 1996, from Health Card to Mary Casale (1)
10.6    Employee Covenant Agreement, dated June 15, 1998, between Health Card
        and Mary Casale (1)
10.7    Stock Option Agreement, dated July 1, 1997, between Bert Brodsky and
        Mary Casale (1)
10.8    Letter, dated February 1, 2000, from Mary Casale to Bert E. Brodsky (4)
10.9    Stock Option Agreement, dated February 1, 2000, between Health Card and
        Mary Casale (4)
10.10   Letter, dated November 30, 1998, from Health Card to Marjorie O'Malley
        (1)
10.11   Employee Covenant Agreement, dated December 7, 1998, between Health
        Card and Marjorie O'Malley (1)
10.12   Stock Option Agreement, dated December 7, 1998, between Bert Brodsky and
        Marjorie O'Malley (1)
10.13   Letter, dated February 1, 2000, from Marjorie O'Malley to Bert E.
        Brodsky (4)
10.14   Stock Option Agreement, dated February 1, 2000, between Health Card and
        Marjorie O'Malley (4)
10.15   Letter, dated November 3, 1998, from Health Card to John Ciufo (1)
10.16   Confidentiality and Non-Disclosure Agreement, dated November 19, 1998,
        between Health Card and John Ciufo (1)
10.17   Stock Option Agreement, dated December 7, 1998, between Bert Brodsky and
        John Ciufo (1)
10.18   Stock Option Agreement, dated August 3, 1999, between Health Card and
        John Ciufo (4)
10.19   Letter, dated February 1, 2000, from John Ciufo to Bert E. Brodsky (4)
10.20   Stock Option Agreement, dated February 1, 2000, between Health Card and
        John Ciufo (4)
10.21   Employee Covenant Agreement, dated June 16, 1998, between Health Card
        and Ken Hammond (1)
10.22   Stock Option Agreement, dated August 3, 1999, between Health Card and
        Ken Hammond (4)
10.23   Employee Covenant Agreement, dated June 1, 1998, between Health Card and
        Linda Portney (1)
10.24   Employment Agreement, dated March 27, 2000, between Health Card and
        David Gershen (4)
10.25   Stock Option Agreement, dated May 1, 2000, between Health Card and David
        Gershen (4)
10.26   Employment Agreement, dated May 3, 2000, between Health Card and James
        Bigl (4)
10.27   Stock Option Agreement, dated June 12, 2000, between Health Card and
        James Bigl (4)
10.28   Stock Option Agreement, dated August 3, 1999, between Health Card and
        Kenneth J. Daley (4)
10.29   Stock Option Agreement, dated August 3, 1999, between Health Card and
        Gerald Angowitz (4)
10.31   Lease, dated January 1, 1996, between Sandata, Inc. and Health Card (1)
10.32   Assignment, dated November 1, 1996, from Sandata, Inc., to BFS Realty,
        LLC (1)
10.33   First Amendment to BFS Realty, LLC Lease, dated June 1, 1998,
        between BFS Realty, LLC and Health Card (1)
10.34   Second Amendment to BFS Realty, LLC Lease, dated April 1, 1999,
        between BFS Realty, LLC and Health Card (1)
10.35   Lease, dated August 10, 1998, between 61 Manorhaven Boulevard, LLC and
        Health Card (1)
10.36   Promissory Note, dated July 1, 1997, made payable by Bert Brodsky to the
        order of Health Card in the original principal amount of $1,000,000 (1)
10.37   Letter, dated June 3, 1999, from Bert Brodsky to Health Card (1)
10.38   Promissory Note, dated July 1, 1997, made payable by Gerald Shapiro to
        the order of Health Card in the original principal amount of $300,000
        (1)
10.39   Letter, dated June 3, 1999, from Gerald Shapiro to Health Card (1)
10.40   Promissory Note, dated June 1, 1998, made payable by P.W. Capital, LLC
        to the Order of Health Card in the original principal amount of
        $4,254,785 (1)
10.41   Agreement of Guaranty, dated June 1, 1998, by Bert E. Brodsky in favor
        of Health Card (1)
10.42   Demand Promissory Note, dated January 2, 1999, made payable by
        P.W. Capital, LLC to the order of Health Card, in the original principal
        amount of $90,100 (1)
10.43   Promissory Note, dated July 31, 2000, made payable by P.W. Capital, LLC
        to the order of Health Card, in the amount of $3,890,940 (4)
10.44   Consulting Agreement, dated April 14, 1994, between P.W. Medical
        Management, Inc. and Health Card (1)
10.45   Assignment, dated July 1, 1996, between P.W. Medical Management, Inc.
        and P.W. Capital Corp. (1)
10.46   Letter, dated June 8, 1999, from P.W. Capital Corp. to Health Card (1)
10.47   Letter, dated June 9, 1999, from Bert E. Brodsky to Health Card (1)
10.48   Letter, dated June 8, 1999, from the Bert E. Brodsky Revocable Trust to
        Health Card (1)
10.49   Letter Agreement, dated June 30, 1999, between the Bert E. Brodsky
        Revocable Trust and Health Card (1)
10.50   Employment Agreement, dated July 1, 1999, between Health Card and
        Bert E. Brodsky (1)
10.51   Letter, dated June 8, 1999, from Bert E. Brodsky to Health Card (1)
10.52   Form of Lock-Up Agreement (1)
10.53   Acquisition and Merger Agreement, dated as of June 27, 2000, between
        Health Card and Pharmacy Associates, Inc. (3)
10.54   Lease Agreement, dated March 4, 1996, between Pharmacy Associates, Inc.
        and Executive Park Partnership (4)
10.55   Amendment to Lease, dated November 2, 1998, between Pharmacy Associates,
        Inc. and Executive Park Partnership (4)
10.56   Amendment to Lease, dated November 19, 1998, between
        Pharmacy Associates, Inc. and Executive Park Partnership (4)
10.57   Lease Agreement, dated July 8, 1999, between Pharmacy Associates, Inc.
        and Executive Park Partnership (4)
10.58   Asset Purchase Agreement dated as of March 5, 2001 among National
        Medical Health Card Systems, Inc., PMP Acquisition Corp., Provider
        Medical Pharmaceutical, LLC and members of PMP (5)
10.59   Master Grid Note made by National Medical Health Card Systems, Inc. in
        favor of The Chase Manhattan Bank (5)
10.60   Lease Agreement dated as of August 1, 2001, between National Medical
        Health Card Systems, Inc. and BFS Realty, LLC (6)
10.61   Employment Agreement, dated June 4, 2001, between National Medical
        Health Card Systems, Inc. and Tery Baskin (6)
10.62   Stock Option Agreement, dated June 4, 2001, between National Medical
        Health Card Systems, Inc. and Tery Baskin (6)
10.63   Stock Option Agreement, dated June 12, 2001, between National Medical
        Health Card Systems, Inc. and James Bigl (6)
21      Subsidiaries of Health Card

(1)     Denotes document filed as an Exhibit to Health Card's Registration
        Statement on Form S-1 (Registration Number:  333-72209) and incorporated
        herein by reference.
(2)     Denotes documentation filed as an Exhibit to Health Card's Report on
        Form 10-K for the fiscal year ended June 30, 1999.
(3)     Denotes document filed as an Exhibit to Health Card's Form 8-K for an
        event dated July 20, 2000 and incorporated herein by reference.
(4)     Denotes documentation filed as an Exhibit to Health Card's Report on
        Form 10-K for the year ended June 30, 2000.
(5)     Denotes document filed as an Exhibit to Health Card's Form 8-K for an
        event dated March 5, 2001.
(6)     Denotes document filed as an Exhibit to Health Card's Report on
        Form 10-K for the year ended June 30, 2001.


<PAGE>

                                   SIGNATURES


     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended,  the  Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.



                   NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.
                                  (Registrant)



Date:November 12, 2001                     By:      /s/ Bert E. Brodsky
     -----------------                          --------------------------------
                                                    Bert E. Brodsky
                                                    Chairman of the Board
                                                    and Chief Executive Officer



                                            By:      /s/David J. Gershen
                                                --------------------------------
                                                      David J. Gershen
                                                      Chief Financial Officer
                                                      and Treasurer