Exhibit 99.1

                                  RISK FACTORS

The risks described below may not be the only risks we face. Additional risks
that we do not yet know of or that we currently think are immaterial may also
impair our business operations. If any of the events or circumstances described
in the following risk factors actually occurs, our business, financial condition
or results of operations could suffer, and the trading price of our common stock
could decline.

RISKS 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 could be harmful to our business.

On December 28, 2001, we entered into a settlement with the US Department of
Justice ("DOJ"), the US Attorney for the Southern District of New York, the US
Attorney for the Middle District of Florida and the US Department of Health and
Human Services, Office of the Inspector General, in connection with all federal
investigations and legal proceedings related to whistleblower lawsuits
previously pending against us in the US District Court for the Southern District
of New York and the US District Court for the District of Columbia. These
lawsuits included allegations 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 and allegations
that we violated the federal anti-kickback law and the federal False Claims Act.
Under the terms of the settlement, the lawsuits were dismissed, the United
States and the whistleblowers released us from the claims asserted in the
lawsuits, and we agreed to pay to the United States a $9 million initial
payment, with an additional $7.5 million to be paid over the next four years. As
of September 30, 2003, a balance of approximately $4.5 million was outstanding
on this obligation. Pursuant to the settlement, we will be required to fulfill
certain additional obligations, including abiding by a five-year Corporate
Integrity Agreement, avoiding violations of law and providing certain
information to the DOJ 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, including our Specialty
Healthcare Services business unit being barred from participating in the
Medicare program and other federal health care programs. In addition, as part of
the settlement, we consented to the entry of a judgment against us for $28
million, less any amounts previously paid under the settlement, that would be
imposed only if we fail to comply with the terms of the settlement, which, if
required to be paid, could have a material adverse effect on our financial
position. In July 2002, we settled a shareholders' class action suit for $10.5
million that had been consolidated from four lawsuits involving allegations
stemming from the whistleblower lawsuits and DOJ investigations.

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

In the normal course of our business, we are involved in lawsuits, claims,
audits and investigations, including any arising out of services or products
provided by or to our operations, personal injury claims, employment disputes
and contractual claims, the outcome of which, in our opinion, will not have a
material adverse effect on our financial position or results of operations.
However, we may become subject to future lawsuits, claims, audits and
investigations that could result in substantial costs and divert our attention
and resources. In addition, since our current growth strategy includes
acquisitions, among other things, we may become exposed to legal claims for the
activities of an acquired business prior to the respective acquisition.


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The majority of our revenues is derived from the sale of products relating to
hemophilia. Our business may be significantly impacted by shortages in the
supply of hemophilia products.

Approximately 60% of our 2002 consolidated revenues and 80% of our Specialty
Pharmacy Services revenues were derived from sales of products needed by
patients with hemophilia. Approximately 55%, or $57 million, of our 2002
Specialty Pharmacy Services revenues were derived from our sale of factor VIII
blood-clotting products. As recently as 2001, we experienced shortages in some
of the hemophilia products we distribute, including factor VIII blood-clotting
products. Suppliers were unable to increase production to meet rising global
demand. Although this shortage has recently ended and supply has increased,
demand continues to grow. We purchase our supplies of blood-clotting products
from five suppliers: Baxter Healthcare Corp., Genetics Institute, Bayer, Novo
Nordisk Pharmaceuticals, Inc. and Aventis Behring L.L.C. We believe that these
five suppliers 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 the shortfall. 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 suppliers.

A substantial percentage of our revenue is attributable to Medicaid programs.
Our business could be significantly impacted by changes in reimbursement
policies and other legislative or regulatory initiatives aimed at reducing costs
associated with Medicare and Medicaid.

In the year ended December 31, 2002, approximately 54% of our Specialty Pharmacy
Services revenues were derived from products and/or services provided to
patients covered under various state Medicaid programs, most of which were from
California, and approximately 9% of our Specialty Pharmacy Services revenues
were derived from products and/or services provided to patients covered under
the Medicare program. During the nine months ended September 30, 2003,
approximately 50% and 7% of our Specialty Pharmacy Services revenues were
derived from products and/or services provided to patients covered under various
state Medicaid and Medicare programs, respectively. Such programs are highly
regulated and subject to frequent and substantial changes and cost-containment
measures that may limit and reduce costs to providers. Currently, many states
are experiencing budget deficits that may require future reductions in health
care related expenditures. According to a Kaiser Family Foundation report issued
in September 2003, all 50 states and the District of Columbia implemented
Medicaid cost containment measures in fiscal year 2003, and each of these states
planned to put in additional spending constraints in fiscal year 2004. State
cost containment activity continued to focus heavily on reducing provider
payments and controlling prescription drug spending. In June, 2003, both the US
Senate and the US House of Representatives passed separate bills providing for a
Medicare prescription drug benefit and other changes to the Medicare program,
including changes to payment methodologies for products we distribute. The
differences between the House and Senate bills are being considered by a
conference committee.

In August 2003, the Medicare program proposed changes to the Medicare payment
methodology for drugs covered by Medicare, including products we distribute such
as blood-clotting factors. In this proposed rule, the Medicare program described
four different options the program might take to lower Medicare reimbursement
for drugs, including blood-clotting factor. The rule has not been finalized to
date. Therefore, we do not know which option may be pursued by the Medicare
program. The Medicare program has stated that its implementation of changes to
lower reimbursement for drugs may depend on whether Congressional action in this
area occurs in 2003. If Congress does not act, we expect the Medicare program to
finalize the rule. In addition, California recently passed legislation that
modifies the reimbursement methodology for blood-clotting factors under various
California state funded health programs, and we are in the process of evaluating
the impact this legislation may have on our financial position or results of
operation.

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As a result of our Specialty Pharmacy acquisitions, we expect the percentage of
our revenues attributable to federal and state programs to increase. Changes in
Medicare, state Medicaid or similar federal or state government programs or the
amounts paid by those programs for our services could have a material adverse
effect on our financial position or results of operations.

We have recently experienced, and expect to continue to experience, rapid growth
by acquisitions. If we are unable to manage our growth effectively or purchase
or integrate new companies, our business could be harmed.

Our growth strategy will likely strain our resources, and, if we cannot
effectively manage our growth, our business could 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 to 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 the following:

o    Since the specialty pharmacy services industry is undergoing consolidation,
     we may experience difficulty in identifying suitable candidates and
     negotiating and consummating acquisitions on attractive terms, if at all.

o    In the industry in which our Specialty Pharmacy Services business unit
     operates, customers have a strong affiliation with their community-based
     representatives; accordingly, we may experience difficulty in retaining and
     assimilating 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; accordingly, we are subject
     to a significant potential for loss of customers during the periods in
     which we attempt to integrate newly acquired businesses.

o    A growth strategy that involves significant acquisitions diverts our
     management's attention from existing operations.

o    Acquisitions may involve significant transaction costs which we may not be
     able to recoup.

o    We may not be able to integrate newly acquired businesses appropriately.

In addition, we may become subject to litigation and other liabilities resulting
from the conduct of an acquired business prior to their acquisition by us.



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Our growth strategy includes acquisitions. If we fail to implement our
acquisition growth strategy as intended, or incur unknown liabilities for the
past practices of acquired companies, our results of operations could be
adversely affected.

An element of the growth strategy of our Specialty Pharmacy Services business
unit is expansion through the acquisition of complementary businesses. Our
competitors may acquire or seek to acquire many of the businesses that would
also be suitable acquisition candidates for us. This competition could limit our
ability to grow by acquisition or increase the cost of our acquisitions. We
cannot assure you that we will be able to acquire any complementary businesses
that meet our target criteria on satisfactory terms, or at all.

If we are able to acquire additional companies, there can be no assurance that
we will be able to integrate such companies successfully or manage our expanded
operations effectively and profitably. The process of integrating newly acquired
businesses may be costly and disruptive. Our operational, financial and
management systems may be incompatible with or inadequate to cost effectively
integrate and manage the acquired systems. As a result, billing practices could
be interrupted, and cash collections on the newly acquired business could be
delayed pending conversion of patient files onto our billing systems and receipt
of provider numbers from government payors. The integration may place
significant demands on our management, diverting their attention from our
existing operations. If we are not successful in integrating acquired
businesses, our results of operations could be adversely affected.

We may acquire businesses with significant unknown or contingent liabilities,
including liabilities for failure to comply with health care or reimbursement
laws and regulations. We have policies to conform the practices of acquired
businesses to our standards and applicable laws and generally intend to seek
indemnification from prospective sellers covering these matters. We may,
however, incur material liabilities for past activities of acquired businesses.

While we generally obtain contractual rights to indemnification from owners of
the businesses we acquire, our ability to realize on any indemnification claims
will depend on many factors, including, among other things, the availability of
assets of the indemnifying parties. These indemnifying parties are often
individuals who may not have the resources to satisfy an indemnification claim.

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 may need substantial
capital resources and may 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.
Even if we are able to obtain additional debt financing, we may incur additional
interest expense, which may decrease our earnings and may become subject to
contracts that restrict our operations. 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 dilute the interests of our existing
shareholders and potentially decrease the market price of our common stock.


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An impairment of the significant amount of goodwill on our financial statements
could adversely affect our financial position and results of operation.

Our Specialty Pharmacy Services acquisitions 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 against 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, "Business Combinations,"
such as marketing, customer or contract-based intangibles. The amount allocated
to these intangible assets could be amortized over a fairly short period, which
may negatively affect our earnings or the market price of our common stock.

As of September 30, 2003, we had goodwill of approximately $148 million, or 67%
of our total assets and approximately 107% of shareholders' equity.

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

The biopharmaceutical and pharmaceutical industries are susceptible to product
shortages. Some of the products that we distribute, such as factor VIII
blood-clotting products and intravenous immune globulins, have experienced
shortages in the recent past. Suppliers were unable to increase production to
meet rising global demand. This shortage has recently ended, and, while supply
has significantly increased, demand continues to grow. In 2002, approximately
55%, or $57 million, of our Specialty Pharmacy Services revenues were derived
from our sale of factor VIII. For the nine months ended September 30, 2003,
approximately 52%, or $66.7 million, of our Specialty Pharmacy Services revenues
were derived from our sale of factor VIII. We purchased our supplies of
blood-clotting products from five suppliers: Baxter Healthcare Corp., Genetics
Institute, Bayer, Novo Nordisk Pharmaceuticals, Inc. and Aventis Behring L.L.C.
We believe that these five suppliers 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 services 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 suppliers. In addition, MedImmune,
Inc. is the sole source of Synagis(R), a product used to treat respiratory
syncytial virus in infants. For the year ended December 31, 2002, approximately
7.3%, or $7.6 million, and for the nine months ended September 30, 2003,
approximately 15%, or $18.8 million, of our Specialty Pharmacy Services revenues
was derived from our sale of Synagis(R). MedImmune's failure to provide us with
an adequate supply of Synagis(R) product for any reason could impair our ability
to add and service patients. In particular, respiratory syncytial virus occurs
primarily during the winter months and thus the demand for Synagis(R) is greater
during this time. A shortage in the supply of Synagis(R) or our failure to
adequately plan for the demand could adversely affect our financial results.
Under our existing arrangements with MedImmune, we are non-exclusive
distributors of Synagis(R) and MedImmune, Inc. has no obligation to supply us
with a minimum amount of Synagis(R). 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.

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The seasonal nature of a portion of our business may cause significant
fluctuations in our quarterly operating results.

For the year ended December 31, 2002, approximately 7.3%, or $7.6 million, and
for the nine months ended September 30, 2003, approximately 15%, or $18.8
million, of our Specialty Pharmacy Services revenues was derived from our sale
of Synagis(R). Synagis(R) is used to treat respiratory syncytial virus in
infants. As respiratory syncytial virus occurs primarily during the winter
months, the major portion of our Synagis(R) sales may be higher during the first
and fourth quarters of the calendar year which may result in significant
fluctuations in our quarterly operating results.

If we fail to cultivate new or maintain established relationships with the
physician referral sources, our revenues may decline.

Our success, in part, is dependent upon referrals and our ability to maintain
good relations with physician referral sources. Physicians referring patients to
us are not our employees and are free to refer their patients to our
competitors. If we are unable to successfully cultivate new referral sources and
maintain strong relationships with our current referral sources, our revenues
may decline.

If additional providers obtain access to products we handle at more favorable
prices, 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 and intravenous immune globulins) that represented 64% of our total
Company revenues at December 2002 and 62% of our total Company revenues for the
nine months ended September 30, 2003. To the best of our knowledge, 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, which could result in
a reduction 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 a 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 could lose
revenues. Certain biopharmaceutical products (biological products, e.g.,
hemophilia factor and intravenous immune globulins) and pharmaceutical products
(i.e., drugs) are included as part of this drug reimbursement methodology. Most
of Specialty Pharmacy Services' revenues results from reimbursement
methodologies based on the average wholesale price of our products. The average
wholesale price for most drugs is compiled and published by private companies,
such as First DataBank, Inc., from information provided by manufacturers.

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Various federal and state government agencies have been investigating, among
other things, 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. 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.

As a result of this enforcement environment, it is possible that manufacturers
may lower their reported average wholesale price. The changes occurring in the
reporting of average wholesale prices or changes in the Medicare or Medicaid
payment systems for covered drugs 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.

A reduction in the demand for our products and services could have our business
reducing the pricing and margins on certain of our products.

A number of circumstances could reduce demand for our products and services
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, or 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 ceasing to develop, supply and generate demand for drugs
     that are compatible with the services we provide;

o    drug companies stopping outsourcing the services we provide or failing 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; or

o    the cure of a disease we service.


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<PAGE>

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 Pharmacy Services and
Specialty Healthcare 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, we cannot completely eliminate the risk of accidental infection or
injury from these materials. 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 and pharmaceutical 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 cannot 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 products or otherwise. In
addition, we may not be able to obtain or maintain professional or product
liability insurance in the future on acceptable terms, if at all, 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 Specialty Pharmacy Services business unit 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 person insurance on any of our community-based
representatives. In addition, our success will depend upon, among other things,
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
September 30, 2003, we had approximately 86 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, 2003, the contract terms of 26 confirm of our management contracts will
expire, including 19 confirm 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

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various reasons prior to their scheduled expiration. During 2002, five contracts
expired without renewal, and an additional 20 contracts were terminated prior to
their scheduled expiration. During the nine months ended September 30, 2003, two
contracts expired without renewal, and an additional nine contracts were
terminated prior to its 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, among other
things, 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, among other things, 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 partially dependent on reimbursement from non-governmental payors. 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 either may not be retained
or may have to reduce our margins to retain business. 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 which cause reductions in the revenues of our
operations have adversely affected our Specialty Healthcare Services business
unit.

As a result of the Balanced Budget Act of 1997, CMS (formerly Health Care
Financing Administration) implemented the Outpatient Prospective Payment System
("OPPS") for most hospital outpatient department services furnished to Medicare
patients beginning August 2000. Under OPPS, a predetermined rate is paid to each
hospital for clinical services rendered, regardless of the hospital's cost. We
believe the new payment system does not provide comparable reimbursement for
services previously reimbursed on a reasonable cost basis, and we believe 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
programs we manage on behalf of the hospitals. As a result, during 2002 and
2001, we renegotiated and modified many of our management contracts related to
our Specialty Healthcare Services business unit, which has resulted in reduced
revenue and income to us from those modified contracts and, in numerous cases,
contract termination. These renegotiations resulted in reduced revenues of
approximately $4.2 million in the year ended December 31, 2001. In addition, we
lost approximately $9.7 million in revenues in the year ended December 31, 2002
as the result of contract terminations. At any time during any given year, 10%
to 20% 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.

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The Wound Care Center programs managed by our Specialty Healthcare Services
business unit 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 OPPS, Medicare published criteria for
determining when programs may be designated "provider based entities." Programs
that existed prior to October 1, 2000 are grandfathered by CMS to be "provider
based entities" until the start of the hospital's next cost-reporting period
beginning on or after July 1, 2003. At that time, the hospital may submit an
attestation to the appropriate CMS Regional Office, attesting that the program
meets all the requirements for provider-based designation. Programs that started
on or after October 1, 2000 can voluntarily apply for provider based designation
status. We timely advised each of our hospital clients of the mandatory
application procedures.  Of the seven "under arrangement" models in our
Specialty Healthcare Services business unit, where we, not the hospital, employ
the clinical and administrative staff that works in the center, three are
potentially at risk for not meeting the criteria for a "provider based entity."
As a result, Specialty Healthcare Services has been in discussions with its
"under arrangement" hospital customers to convert the programs to management
models where the hospital employs the clinical and administrative staff.
Although we believe that the remainder of the programs we manage substantially
meet the current criteria to be designated "provider based entities," a
widespread denial of such designation could harm our business.

Increased competition for patients may result in reduced rates of reimbursement,
which may then cause reductions in reimbursement amounts payable to us by
providers.

In recent years, competition for patients, efforts by traditional third-party
payors to contain or reduce health care 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 Services operations
depends 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
these trends may adversely affect our business.

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.

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

Our Specialty Pharmacy Services business unit faces competition from other
disease management entities, general health care facilities and service
providers, biopharmaceutical companies, pharmaceutical 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. The principal competition with our Specialty
Healthcare Services business unit 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.

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

Political, economic and regulatory influences are subjecting the health care
industry in the United States to fundamental change. We anticipate that Congress
and state legislatures may 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 Medicare's coverage and payments of the drugs and services we
provide.

In June, 2003, both the US Senate and the US House of Representatives passed
separate bills providing for a Medicare prescription drug benefit and other
changes to the Medicare program, including changes to payment methodologies for
products we distribute. The differences between the House and Senate bills are
being considered by a conference committee. It is possible that any future
legislation enacted by Congress or state legislatures could harm our business or
could change the operating environment of 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 and pharmaceutical products
which could affect reimbursement policies in a manner adverse to us. In
addition, future legislative and regulatory changes 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.

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, sale and purchase of
drugs, health supplies and health services, including the biopharmaceutical and
pharmaceutical 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.

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There are a number of state and federal laws and regulations that apply to our
operations which could harm our business.

A number of state and federal laws and regulations apply to, and could harm, our
business. These laws and regulations include, among other things, the following:

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 to influence their decision to
     seek specific items and services reimbursed by the government or to choose
     a particular provider.  The potential sanctions for violations of these
     laws include significant fines, exclusion from participation in Medicare
     and Medicaid 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 our customers, physicians,
     vendors, other retail pharmacies and patients.  The finding of a violation
     of the federal laws or one of these state laws could harm our business.

o    The Department of Health and Human Services has issued final regulations
     implementing the Administrative Simplification Provisions of HIPAA
     concerning the maintenance, transmission, and security of individually
     identifiable health information.  The privacy regulations, with which
     compliance was required as of April 2003, impose on covered entities
     (including hospitals, pharmacies, and other health care providers)
     significant new restrictions on the use and disclosure of individually
     identifiable health information.  The security regulations, which require
     compliance by April 2005, will impose on covered entities certain
     administrative, technical, and physical safeguard requirements with respect
     to individually identifiable health information maintained or transmitted
     electronically.  The regulations establishing electronic transaction
     standards that all health care providers must use when submitting or
     receiving certain health care transactions electronically were to become
     effective October 2002, but Congress has extended the compliance deadline
     until October 2003 for organizations, such as ours, that submitted a
     request for an extension.  As a result of these HIPAA regulations, we have
     taken the appropriate actions to ensure that patient data kept on our
     computer networks are in compliance with these regulations.  We believe
     that we are now substantially in compliance with the HIPAA electronic
     standards and are capable of delivering HIPAA standard transactions
     electronically.  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.  In addition to HIPAA, a number of states have
     adopted laws and/or regulations applicable to the use and disclosure of
     patient health information.  The finding of a violation of HIPAA or one
     of these state laws could harm our business.


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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 his or her immediate family members have a "financial
     relationship" and prohibits the entity receiving the referral from
     presenting a claim to Medicare or Medicaid programs for services furnished
     under the referral. A violation of the Stark Law is punishable by civil
     sanctions, including significant fines, a denial of payment or a
     requirement to refund certain amounts collected, and exclusion from
     participation in Medicare and Medicaid. A number of states have adopted
     laws and/or regulations that contain provisions that track, or are
     otherwise similar to, the Stark Law. The finding of a violation of the
     Stark Law or one or more of these state laws could harm our business.

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. Our nurses must obtain state licenses
     to provide nursing services we provide to some of our patients. 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. In addition, our pharmacies may
     be required by the federal Drug Enforcement Agency, as well as by similar
     state agencies, to obtain registration to handle controlled substances,
     including certain prescription drugs, and to follow specified labeling and
     record-keeping requirements for such substances. 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. From time to time, and like others in the
     health care industry, we receive requests for information from government
     agencies in connection with their regulatory or investigation authority.

o    We are subject to federal and state laws prohibiting entities and
     individuals from knowingly and willfully making claims to Medicare and
     Medicaid and other governmental programs and third-party payors that
     contain false or fraudulent information.  The federal False Claims Act
     encourages private individuals to file suits on behalf of the government
     against health care providers such as us.  As such suits are generally
     filed under seal with a court to allow the government adequate time to
     investigate and determine whether it will intervene in the action, the
     health care providers affected are often unaware of the suit until the
     government has made its determination and the seal is lifted.  Violations
     or alleged violations of such laws, and any related suits, could result
     in significant financial or criminal sanctions (including treble damages)
     or exclusion from participation in the Medicare and Medicaid programs.

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

Billing and collection for our services is a complex process requiring constant
attention and involvement by senior management and ongoing enhancements to
information systems and billing center operating procedures.

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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 are paid for our services by various payors, including patients, insurance
companies, Medicare, Medicaid and others, each with distinct billing
requirements. We recognize revenue when we provide services to patients.
However, our ability to collect these receivables depends in part on our
submissions to payors of accurate and complete documentation. In order for us to
bill and receive payment for our services, the physician and the patient must
provide appropriate billing information. Following up on incorrect or missing
information generally slows down the billing process and the collection of
accounts receivable. Failure to meet the billing requirements of the different
payors could have a significant impact on our revenues, profitability and cash
flow.

Further, even if our billing procedures comply with all third party-payor
requirements, some of our payors may experience financial difficulties or may
otherwise not pay accounts receivable when due, which could result in increased
write-offs or provisions for doubtful accounts. There can be no assurance that
we will be able to maintain our current levels of collectibility or that
third-party payors will not experience financial difficulties. If we are unable
to collect our accounts receivable on a timely basis, our revenues,
profitability and cash flow could be adversely affected.

We rely heavily on a limited number of shipping providers, and our business
could be harmed if their 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
order, overnight courier, retail pharmacy 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: any significant increase in shipping rates; strikes or other
service interruptions by these carriers; and spoilage of high-cost drugs during
shipment since our drugs often require special handling, such as refrigeration.

If we do not maintain effective and efficient information systems, our
operations may be adversely affected.

Our operations depend in part on the continued and uninterrupted performance of
our information systems. Failure to maintain reliable information systems or
disruptions in our information systems could cause disruptions in our business
operations, including billing and collections, loss of existing patients and
difficulty in attracting new patients, patient and payor disputes, regulatory
problems, increases in administrative expenses or other adverse consequences,
any or all of which could have a material adverse effect on our operations.


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RISKS RELATED TO OUR COMMON STOCK

The market price of our common stock has experienced, and may continue to
experience, substantial volatility.

During the period from January 1, 2001 through September 30, 2003, the closing
sale price of our common stock has ranged from a low of $5.20 per share in the
second quarter of 2001 to a high of $22.75 in the first quarter of 2002.

Many factors have influenced the price of our common stock in the past,
including fluctuations in our earnings and changes in our financial position,
management changes, low trading volume, changes in government regulations 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

Additionally, results of fluctuations in our quarterly financial results could
cause a decline in the price of our stock. Such fluctuations may be the result
of:

o    a decrease in forecasted sales;
o    a shortage in the products we provide;
o    a change in management's estimates, such as those used for financial
     reporting and costs of products and services;
o    the performance of our sales team;
o    economic and political changes that are beyond our control;
o    physician's recommendations;
o    timing of collection of accounts receivable;
o    the seasonality of our Synagis(R)sales;
o    a decrease in prices paid by government and other payors for the products
     we provide;
o    contract renegotiations with our suppliers;
o    the adoption and application of new or changes to existing accounting
     policies and practices.

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 of directors 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 our 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
occurs, 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 shareholder.
Interested shareholders include, among others, any person who, together with
affiliates and associates, acquires 10% or more of a corporation's voting stock
in a transaction which is not approved by a duly constituted committee of the
board of directors of the corporation. These provisions could also limit your
ability to receive a premium in a change of control.


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