Exhibit 10.3 



Confidential treatment has been
requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidentiality request. Omissions are designated as [*]. A complete
version of this exhibit has been filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 



CONFIDENTIAL
TREATMENT REQUESTED BY BRADLEY PHARMACEUTICALS, INC. 



AMENDMENT, EXTENSION
AND NOVATION    

                                                            OF 

                           CORE DISTRIBUTION AGREEMENT 

                                 BY AND BETWEEN 

                                   MCKESSON CORPORATION AND BRADLEY PHARMACEUTICALS, INC. 



                  This
Agreement is entered into on the last date signed below (the “Effective Date”), by and
between BRADLEY PHARMACEUTICALS, INC. (“Bradley”) and MCKESSON CORPORATION (“McKesson”).  



                  On
September 7, 2005, Bradley and McKesson entered into a “Core Distribution Agreement”
effective on October 1, 2004, governing McKesson’s distribution of certain pharmaceutical
products marketed by Bradley (the “Agreement”). 



                  Now
Bradley and McKesson desire to amend the Agreement to extend the term thereof, to provide
for renewal terms, to modify inventory levels, and to change the fee structure payable by
Bradley to McKesson. 



                  Bradley
and McKesson now agree as follows: 



1.        The language of the following
sections of the Agreement are hereby deleted in their entirety and replaced with the
following: 



Section I.a. McKesson agrees to
provide the following core distribution services to the extent customarily performed by a
full-range pharmaceutical distributor consistent with the then current industry practices
(“Core Services”): inventory distribution of Manufacturer’s products to McKesson’s
customers upon their orders therefore; 852 data for prescription products including
inventory levels on hand and on order in addition to aggregate sales out; perform
back-end administrative services to support the distribution of Manufacturer’s products
and the maintenance of efficient inventory levels for servicing customers at the ***%
service level.  



Attachment A 



McKesson Core
Distribution Agreement Fee 
 Service
Fee Schedule  



A Service Fee, as outlined below,
will be calculated and paid quarterly based on the total volume of all branded
pharmaceutical product purchases by McKesson from Manufacturer during that quarter valued
at the Manufacturer’s list price at the time the products were purchased. 



McKesson will provide quarterly
Service Fee profitability information and invoices, if applicable, to Manufacturer within
twenty (20) days of the end of each quarter and Manufacturer shall pay such invoices no
later than thirty (30) days after invoice. 



Service Fee:  *** % 




 
	 	
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Confidential treatment has been
requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidentiality request. Omissions are designated as [*]. A complete
version of this exhibit has been filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. 



Service Fee Credits:  Manufacturer
will receive credit towards Service Fee for the following items: 



	 	(a)  	  	Price
appreciation on inventory on hand and on order after a Manufacturer pricing action. 






	 	(b)  	  	Margin
earned on special promotions including buy-ins, off-invoice allowances and other deals.
 In the event the           Manufacture introduces a new Product that is promoted to
McKesson’s           customers and the margin the Manufacturer offers McKesson as part of
          the launch of the Product is subsequently passed on to McKesson’s
          customers that stock the Product ahead of actual demand during the
          initial new product launch period, such margin will be excluded from
          the calculation of Service Fee Credits. 






In any quarter where Service Fee
Credits exceed the Service Fee (“Carryover Credits”), such Carryover Credits will be
credited against the Service Fee due in future quarters. McKesson shall provide
appropriate documentation to support the calculation of the Service Fee and Service Fee
Credits. 



Between August 1, 2007 and December
31, 2007, McKesson will use its best efforts to gradually reduce on hand inventory levels
on all products as follows:  



       (a) *** 

         (b) ***  



After December 31, 2007, McKesson
will use its best efforts to maintain efficient inventory levels to reflect true customer
demand. 



The benefit provided by
Manufacturer, as calculated in accordance with Attachment A, is provided with the
understanding that it is McKesson’s responsibility to manage sell side (sales to
customer) profitability and Manufacturer is not guaranteeing the economic or other terms
governing McKesson’s resale of the Manufacturer’s products to McKesson’s customers. 



2.        All capitalized terms used in
this Amendment shall have the same meaning as said capitalized terms in the Agreement. 



3.        The terms and conditions of the
Agreement are renewed and continued in full force and effect except as specifically
amended hereby. 



Agreed to and signed on the dates
below shown. 




	MCKESSON CORPORATION	BRADLEY PHARMACEUTICALS INC.

	 	 
	BY: /s/ Robert V. James	BY: /s/ Alton Delane
	ROBERT V. JAMES, VP, BRAND PHARMACEUTICAL

      PRODUCT  MANAGEMENT
    	ALTON DELANE, VICE PRESIDENT

      BUSINESS DEVELOPMENT
    
	DATE: October 5, 2007	DATE: October 5, 2007







 
	 	
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