EXHIBIT 4.14

                           POLYMEDICA INDUSTRIES, INC.
                    POLYMEDICA PHARMACEUTICALS (U.S.A.), INC.
                 POLYMEDICA PHARMACEUTICALS (PUERTO RICO), INC.
                                 11 State Street
                           Woburn, Massachusetts 01801

                                January 23, 1997

JOHN HANCOCK MUTUAL LIFE
   INSURANCE COMPANY
John Hancock Place
P. O. Box 111
Boston, Massachusetts 02117

Ladies and Gentlemen:

         POLYMEDICA   INDUSTRIES,   INC.,  a  Massachusetts   corporation   (the
"Parent"),  and  POLYMEDICA  PHARMACEUTICALS  (U.S.A.),  INC.,  a  Massachusetts
corporation  and a Wholly-Owned  Subsidiary of the Parent (the  "Company"),  and
POLYMEDICA  PHARMACEUTICALS (PUERTO RICO), INC., a Massachusetts corporation and
a  Wholly-Owned  Subsidiary  of the  Company  ("PPR")  (the  Company and PPR are
sometimes collectively referred to as the "Borrowers" and each as a "Borrower"),
agree with you as follows:

         1.  Definitions.  Reference  is hereby  made to that  certain  Note and
Warrant  Agreement dated January 26, 1993, as amended and supplemented by twelve
letter  agreements dated April 27, 1993, June 15, 1993, March 29, 1994, June 17,
1994, June 30, 1994,  October 27, 1994, June 26, 1995, October 18, 1995, January
1, 1996,  June 19,  1996,  August 2, 1996 and  October  30,  1996 (the "Note and
Warrant  Agreement").  Capitalized terms used herein without definition have the
meanings ascribed to them in the Note and Warrant Agreement.

         2.  Waiver  of  Default  under  Section  14.7 of the Note  and  Warrant
Agreement.  The  Parent  and the  Borrowers  hereby  request  that you waive any
Default or Event of Default  arising  solely  from the failure of the Company to
comply with the  provisions of sections 14.7 (a) and (b) of the Note and Warrant
Agreement for the period of four (4) consecutive  quarterly  accounting  periods
ended December 31, 1996. In consideration of the representations, warranties and
agreements  of the Parent  and the  Borrowers  set forth  herein,  you,  by your
signature  below,  hereby grant such waiver,  solely with respect to such period
four (4) consecutive quarterly accounting periods.


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         3.  No Default, Representations and Warranties, etc.

                  (a) The Parent and the  Borrowers  represent  and warrant that
the representations  and warranties  contained in the Note and Warrant Agreement
and the other  Operative  Agreements are correct on and as of the date hereof as
if made on such date  (except  to the extent  affected  by the  consummation  of
transactions permitted by the Note and Warrant Agreement) and that no Default or
Event of Default exists.

                  (b) The Parent and the  Borrowers  each ratify and confirm the
Note and Warrant  Agreement and each of the other Operative  Agreements to which
each is a party and agree that each such  agreement,  document and instrument is
in full force and effect, that its obligations  thereunder and under this Letter
Agreement are its legal, valid and binding obligations enforceable against it in
accordance with the terms thereof and hereof and that it has no defense, whether
legal or equitable,  set off or  counterclaim  to the payment and performance of
such obligations.

                  (c) The Parent and the Borrowers agree that (i) if any default
shall be made in the  performance  or observance  of any covenant,  agreement of
condition  contained in this Letter  Agreement or in any agreement,  document or
instrument  executed in  connection  herewith or pursuant  hereto or (ii) if any
representation or warranty made by the Parent or the Borrowers herein or therein
shall prove to have been false or  incorrect  on the date as of which made,  the
same shall  constitute an Event of Default under the Note and Warrant  Agreement
and the other Operative Agreements and, in such event, you and each other holder
of any of the Notes  shall have all rights and  remedies  provided by law and/or
provided  or  referred  to in the  Note  and  Warrant  Agreement  and the  other
Operative  Agreements.  The Parent  and the  Borrowers  further  agree that this
Letter  Agreement is an Operative  Agreement and all  references in the Note and
Warrant Agreement and in any other of the other Operative Agreements referred to
therein shall include this Letter Agreement.

         4.  Payment of Transaction  Costs.  Concurrently  with the execution of
this Letter  Agreement,  the Parent and the Borrowers  shall pay all  reasonable
fees and  disbursements  incurred  by you at or prior to such  time,  including,
without  limitation,  the reasonable  fees,  expenses and  disbursements of your
special counsel.



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         5.  Governing Law. This Letter Agreement, including the validity hereof
and the rights and obligations of the parties  hereunder,  shall be construed in
accordance  with  and  governed  by  the  domestic   substantive   laws  of  The
Commonwealth  of  Massachusetts  without  giving  effect to any choice of law or
conflicts  of law  provision  or rule that would  cause the  application  of the
domestic substantive laws of any other jurisdiction.

         6.  Miscellaneous.  The  headings  in  this  Letter  Agreement  are for
purposes of reference  only and shall not limit or otherwise  affect the meaning
hereof.  This Letter Agreement  embodies the entire agreement and  understanding
among the parties hereto and supersedes all prior agreements and  understandings
relating to the subject  matter  hereof.  In case any  provision  in this Letter
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability  of the remaining  provisions shall not in any way be affected or
impaired  thereby.  This  Letter  Agreement  may be  executed  in any  number of
counterparts  and by the parties  hereto on separate  counterparts  but all such
counterparts shall together constitute but one and the same instrument.



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         If you are in  agreement  with the  foregoing,  please sign the form of
agreement  on  the  accompanying   counterpart  hereof,  whereupon  this  Letter
Agreement shall become a binding  agreement under seal among the parties hereto.
Please then return one of such counterparts to the Company.

                                                     Very truly yours,

                                                     POLYMEDICA INDUSTRIES, INC.

                                                     By: /s/ Steven James Lee
                                                             Steven James Lee
                                                             Chairman and Chief
                                                             Executive Officer

                                                     POLYMEDICA PHARMACEUTICALS
                                                       (U.S.A.), INC.

                                                     By: /s/ Steven James Lee
                                                             Steven James Lee
                                                             Chief Executive 
                                                             Officer

                                                     POLYMEDICA PHARMACEUTICALS
                                                       (PUERTO RICO), INC.

                                                     By: /s/ Steven James Lee
                                                             Steven James Lee
                                                             Chief Executive 
                                                             Officer

         The terms and provisions of the foregoing  Letter  Agreement are hereby
acknowledged and agreed to.

POLYMEDICA SECURITIES, INC.                          POLYMEDICA PHARMACEUTICALS
                                                     SECURITIES, INC.

By: /s/ Steven James Lee                             By: /s/ Steven James Lee
        Steven James Lee                                     Steven James Lee
        President                                            President

The foregoing is hereby accepted and agreed to:
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY


By: /s/ D. Dana Donovan
        D. Dana Donovan
        Senior Investment Officer


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