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                                                                    EXHIBIT 10.3

                                REAFFIRMATION OF
                    SUBORDINATION AND INTERCREDITOR AGREEMENT

To:          NeoPharm, Inc.
             150 Field Drive, Suite 195
             Lake Forest, Illinois 60045
             Attn:  President and Chief Executive Officer

Re:          Subordination and Intercreditor Agreement (as amended, restated,
             renewed or replaced from time to time, the "Kapoor Subordination
             Agreement") dated as of December 20, 2001, executed by John N.
             Kapoor, as Trustee under The John N. Kapoor Trust, dated
             September 20, 1989 (the "Junior Party") in favor of NeoPharm, Inc.
             (the "Lender") (capitalized terms used but not defined herein
             to have the meanings assigned to them in the Kapoor Subordination
             Agreement)


Dear Sir:

This letter is given to Lender to induce Lender to (a) waive certain defaults
existing under that certain Promissory Note of Akorn, Inc. ("Borrower") dated
December 20, 2001 in the principal amount of $3,250,000 in favor of Lender (the
"Original NeoPharm Note"), (b) accept in substitution for the Original NeoPharm
Note an Amended and Restated Promissory Note of Borrower dated of even date
hereof in the principal amount of $3,250,000 in favor of Lender (the "Amended
and Restated NeoPharm Note"), and (c) execute and deliver a certain
Subordination and Intercreditor Agreement dated of even date herewith (the
"LaSalle Subordination Agreement") in favor of LaSalle Bank National
Association, as Administrative Agent for the Senior Lenders under a Credit
Agreement dated of even date herewith (the "Credit Agreement") subordinating
indebtedness of Borrower to Lender to the prior payment in full of all
indebtedness of Borrower under the Credit Agreement.

Without limiting Lender's rights and remedies under or in connection with the
Kapoor Subordination Agreement, the undersigned hereby confirms that:

      (a)   All obligations of the undersigned to Lender under the Kapoor
            Subordination Agreement are hereby reaffirmed; provided that
            Borrower may make to the Junior Party and the Junior Party may
            accept: (i) reimbursement of all costs and expenses incurred by the
            Junior Party in connection with the negotiation, execution, delivery
            and preparation of the Kapoor Guaranty and Related Agreements to
            which it is a party and the consummation of the transactions
            contemplated thereby and (ii) reimbursement of the costs of issuance
            of the unconditional standby letter of credit delivered to the
            Administrative Agent by
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            the Junior Party pursuant to the Kapoor Guaranty; provided, that
            reimbursements pursuant to clauses (i) and (ii) shall not exceed
            $140,000 in the aggregate during the term of this Agreement. Terms
            used but not otherwise defined in the foregoing shall have the
            meanings ascribed to them in the Credit Agreement.

      (b)   The execution and delivery of the Amended and Restated NeoPharm Note
            and/or the LaSalle Subordination Agreement shall in no way diminish,
            affect or modify the undersigned's obligations under the Kapoor
            Subordination Agreement;

      (c)   The definition of "Junior Debt" set forth in the Kapoor
            Subordination Agreement shall include, without limitation, all
            principal, interest, late fees, default interest, future advances
            and all other sums due under that certain Promissory Note of the
            Borrower in favor of the undersigned dated as of October 7, 2003 in
            the principal amount of $2,117,139.03.

The undersigned acknowledges and agrees that you will be relying upon this
letter in waiving outstanding defaults under the Original NeoPharm Note and
subordinating repayment of the Amended and Restated NeoPharm Note to the prior
payment in full of indebtedness of Borrower under the Credit Agreement and
otherwise.

                                                Sincerely,



                                                --------------------------------
                                                John N. Kapoor, as Trustee under
                                                THE JOHN N. KAPOOR TRUST, Dated
                                                September 20, 1989

                                                Address:
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                                                Fax No.:
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Acknowledged and agreed by:

AKORN, INC.


By:
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Name:
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Title:
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