Medco Research, Inc.


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A

                                 AMENDMENT NO. 1

                       AMENDMENT TO APPLICATION OR REPORT

                  Filed Pursuant to Section 12, 13 or 15(d) of
                       THE SECURITIES EXCHANGE ACT OF 1934

                              MEDCO RESEARCH, INC.
             (Exact name of registrant as specified in its charter)










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                              Medco Research, Inc.



         The  information  required  by PART III  (Items  10,  11, 12 and 13) of
Registrant's Annual Report on Form 10-K for the year ended December 31, 1997 was
incorporated by reference from the Registrant's definitive proxy statement to be
filed pursuant to Regulation 14A.  However,  the  Registrant's  definitive proxy
statement  will not be filed with the Commission  within the prescribed  120-day
period after the end of the fiscal year covered by such Form 10-K. Therefore the
Items  comprising the PART III  information  hereby are filed as an amendment to
the Registrant's Form 10-K for the year ended December 31, 1997.


ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

Board of Directors

         The following persons currently are directors of the Company:

                                      Albert D. Angel
                                      William M. Bartlett
                                      Jay N. Cohn, M.D.
                                      Marvin S. Hausman, M.D.
                                      Mark B. Hirsch
                                      Eugene L. Step
                                      Richard C. Williams

         The following biographical information is furnished with respect to the
seven directors:

         Albert D. Angel,  age 60, became a Director of the Company in September
1995. He is currently  President of Angel  Consulting,  a management  consulting
firm in Llewellyn  Park,  New Jersey,  and Chairman of the Board of Directors of
Axonyx,  Inc.,  a private  biopharmaceutical  research  company.  He is a former
President of The Merck Company  Foundation and was also Vice  President,  Public
Affairs, of Merck & Co., Inc. from September 1985 until December 1993. Mr. Angel
joined Merck in 1967,  serving  initially in various legal counsel positions and
later as Chairman  and Managing  Director of Merck Sharp &  Dohme-U.K.  and Vice
President of Merck Sharp & Dohme-Europe.  Prior to joining Merck,  Mr. Angel was
an attorney at Hughes Hubbard Blair & Reed, and received his LL.B. from Yale Law
School in 1960.

         William M.  Bartlett,  age 64, has served as a Director  of the Company
since  September 1992.  Since then Mr.  Bartlett has been an independent  health
care business  consultant.  He currently  serves on the board of Vysis,  Inc., a
public genomic  diagnostic  research  company.  From 1990 to 1992, Mr.  Bartlett
served  as the Chief  Operating  Officer  of  McDermott,  Will & Emory,  a large
Chicago-based  law firm.  From 1982 to 1990, he served as the  President,  Chief
Executive  Officer  and  a  Director  of  Kewaunee  Scientific  Corporation,   a
manufacturer of scientific  laboratory  furniture and equipment.  Prior to that,
Mr. Bartlett served as a Corporate Vice President, President and Chief Executive
Officer of G.D.  Searle &  Company's  Medical  Products  Group,  and at American
Hospital Supply Corporation as President of the Atlantic International Division,
and as President of the V. Mueller Surgical  Instrument  Division.  Mr. Bartlett
has a BSCE from Duke University and an Advanced Marketing Certification from the
Kellogg School of Northwestern University.

         Jay N. Cohn,  M.D.,  age 67,  joined the  Company as a Director  in May
1996. He is currently Professor of Medicine, Cardiovascular Division, Department
of  Medicine,  University  of  Minnesota  Medical  School,  and  holds  a  staff
appointment at the VA Medical Center in  Minneapolis.  Dr. Cohn is the author of
over 500 scientific publications and is currently editor-in-chief of the Journal
Of Cardiac Failure.  He is  internationally  recognized for contributions to the


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                              Medco Research, Inc.


management of  cardiovascular  diseases and holds several  patents on inventions
aimed at improving  diagnostic and  therapeutic  approaches to heart failure and
hypertension. He is currently President of the American Society of Heart Failure
and President of the International Society of Hypertension. He received his M.D.
from Cornell  University  in 1956,  and is a Fellow of the  American  College of
Physicians, the American College of Cardiology, and the American Association for
the Advancement of Science.

         Marvin S. Hausman,  M.D., age 56, rejoined the Company as a Director in
May 1996. He currently serves as a consultant to the pharmaceutical industry. He
is President of Northwest  Medical  Research  Partners,  Inc.,  President/CEO of
Axonyx,  Inc. and a Director of Regent Assisted Living,  Inc. Dr. Hausman served
as Clinical  Instructor and Visiting  Surgeon,  Department of Surgery,  U.C.L.A.
Medical Center from  1975-1992.  He is a co-founder of Medco  Research,  Inc. He
received his M.D. from the New York  University  School of Medicine in 1967, and
he is a Fellow of the American College of Surgeons.

         Mark B. Hirsch,  age 51,  joined the Company as a Director in May 1996.
Mr. Hirsch is currently a consultant to the Biotech Industry. From December 1996
to June 1997,  Mr.  Hirsch was the Chief  Executive  Officer  and  President  of
RedCell,  Inc. From May 1996 to December  1996, he was Executive  Vice President
and Chief Financial  Officer of RedCell,  Inc. From April 1993 to April 1996, he
was Vice President,  Corporate  Development,  of CV  Therapeutics.  From 1991 to
March 1993,  Mr.  Hirsch was Vice  President of Business  Development  and Chief
Financial Officer of Arris  Pharmaceutical  Corporation.  From 1988 to 1991, Mr.
Hirsch was a partner at Montgomery Medical Ventures, L.P. II. From 1985 to 1988,
he was Vice President of Business  Development  of Genentech,  Inc. From 1969 to
1985,  Mr.  Hirsch  held  several   positions  with  American   Hospital  Supply
Corporation,  including Vice President of American's Hospital Sector. Mr. Hirsch
received a B.S. in  accounting  from the  University  of  Illinois,  and he is a
certified public accountant.

         Eugene L. Step,  age 67, has served as a Director of the Company  since
January 1993. He currently  serves as a Director of Scios,  Inc.,  Cell-Genesis,
Inc.,  DBT Online  Inc.,  Guidant  Corp.,  and  Pathogenesis,  Inc. He served as
Executive  Vice  President and President of the  Pharmaceutical  Division of Eli
Lilly and Company  from 1986 until his  retirement  in 1992.  From 1973  through
1985, he also served as President of that company's Pharmaceutical Division. Mr.
Step served as a member of the Board of Directors and Executive Committee of Eli
Lilly  and  Company  from  1973  through  1992.  Mr.  Step has a B.A.  degree in
Economics  from the  University of Nebraska and a M.S.  degree in Accounting and
Finance from the University of Illinois.

         Richard C.  Williams,  age 54, has served as a Director  of the Company
since  January 1991 and as Chairman of the  Company's  Board of Directors  since
October  1992.  Mr.  Williams has been  President of  Conner-Thoele  Limited,  a
consulting  and  financial  advisory  firm which  services  the health  care and
pharmaceutical  industries,  since March  1989.  Mr.  Williams  also serves as a
Director of Immunomedics,  Inc., a biopharmaceutical  research company, and as a
Director of Vysis,  Inc., a public genomic  diagnostic  research  company.  From
November 1983 to March 1989, Mr. Williams served as Vice  President-Finance  and
Chief Financial  Officer of Erbamont N.V., a  pharmaceutical  company.  Prior to
that, he served in various financial executive positions with Field Enterprises,
Inc., a real estate and communications  company,  and with Abbott  Laboratories,
UNC Resources,  and American Hospital Supply Corporation.  He is also a Director
of Centaur,  Inc., a private equine diagnostic company. Mr. Williams has a B. A.
degree from DePauw University and an MBA from the Wharton School of Business.

Committees of the Board of Directors

         A  Compensation   Committee  of  the  Board  of  Directors,   currently
consisting  of Mr. Angel and Drs.  Cohn and Hausman,  administers  the Company's
Stock  Option  Plan (the "1983  Option  Plan")  and 1989 Stock  Option and Stock
Appreciation  Rights Plan (the "1989 Option  Plan")  described  below,  votes on
matters concerning participation in these Plans and makes recommendations to the
entire  Board  of  Directors  as  to,  or  itself  approves,  other  matters  of
compensation of officers. The Compensation Committee took action on one occasion
by written consent during the year ended December 31, 1997.



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                              Medco Research, Inc.



         The  Finance  and  Audit  Committee  of the Board of  Directors,  whose
members  currently  are  Messrs.  Bartlett,  Hirsch  and Step,  reviews  certain
financial  and audit  matters  relating  to the  Company.  The Finance and Audit
Committee held one meeting during the year ended December 31, 1997.

         The Corporate  Governance  Committee currently are Messrs.  Step, Angel
and Williams. A Corporate Governance Committee makes recommendations to the full
Board of Directors concerning nominees for election as directors of the Company.
In making its recommendations,  the Corporate Governance Committee will consider
as potential nominees persons recommended by the Company's shareholders.

         During the year ended  December 31, 1997, the Board of Directors met on
four occasions.  A number of matters that otherwise would have been addressed in
separate  meetings of the Compensation  Committee,  Finance and Audit Committee,
and Corporate  Governance Committee during that period were instead addressed at
meetings of the entire Board of Directors.  Each director  attended at least 75%
of the meetings of the Board and those committees on which the director served.

Executive Officers

         The following persons currently are executive officers of the Company:

         Roger D.  Blevins,  Pharm.  D.,  age 42,  is the  President  and  Chief
Executive  Officer  of the  Company.  He  joined  the  Company  as  Director  of
Cardiovascular  Research in July 1988,  was appointed Vice President of Research
and Development in October 1990 and was appointed  President and Chief Operating
Officer in June 1995 and was appointed Chief Executive Officer in February 1998.
From  July  1986 to July  1988,  he was  Director  of  Cardiovascular  Research,
Department of Medicine,  Sinai  Hospital of Detroit,  and from July 1985 to July
1986 he was the Associate Director of the Center for Cardiovascular  Research at
the same institution. Dr. Blevins received his Doctorate of Pharmacy degree from
Wayne State University, Detroit, Michigan in May 1982.

         Glenn C.  Andrews,  CFA,  age 47, is the Vice  President,  Finance  and
Administration and Chief Financial Officer of the Company. He joined the Company
as Vice President and Chief Financial  Officer in July 1996. From September 1995
to July 1996 he was Vice President,  Planning and Analysis of Coastal  Physician
Group,  Inc. From September 1984 to September 1995, he was employed by Burroughs
Wellcome Co.  where he served as Treasurer  from 1992 to 1995 and as Director of
Business  Analysis and Planning from 1989 to 1992. Mr. Andrews received his B.S.
degree in 1974 and MBA in 1977 from the University of Tennessee.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  the
Company's  executive  officers and directors,  and persons who own more than ten
percent  of a  registered  class of the  Company's  equity  securities,  to file
reports of ownership and changes in ownership  with the  Securities and Exchange
Commission  (the  "Commission")  and  the  American  Stock  Exchange.  Officers,
directors and greater than ten percent  shareholders  are required by Securities
and  Exchange  Commission  regulation  to furnish the Company with copies of all
Section 16(a) forms they file.

         Based  solely on review of the  copies of such forms  furnished  to the
Company, or written  representations  that no Form 5 were required,  the Company
believes that during the year ended  December 31, 1997, all Section 16(a) filing
requirements applicable to its officers and directors were complied with, except
that Dr.  Hausman  filed  late  his Form 4  reporting  the open  market  sale of
non-derivative securities during December 1997.




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                              Medco Research, Inc.


ITEM 11.          EXECUTIVE COMPENSATION

Incentive Compensation Plan

         In 1991 the Company adopted a Management Incentive Plan (the "Incentive
Plan") to provide  additional cash compensation to key Company  executives based
on their  individual  performance  as well as the financial  performance  of the
Company. Plan participants must be approved by the Compensation Committee of the
Board of Directors,  which  establishes  annual ceiling amounts of distributions
under the Incentive Plan for each participant based on such individual's  annual
salary.  Distributions  are  based  90%  on  the  Company's  achievement  of its
corporate  objectives  and  10%  based  on  the  Committee's  evaluation  of the
participant's achievement during the year of his or her individual objectives.

Employment   Contracts;   Termination   Of  Employment   And   Change-In-Control
Arrangements

         On  September  26,  1996 the  Company  signed a  three-year  employment
agreement  with Dr.  Blevins  to  serve as the  Company's  President  and  Chief
Operating Officer.  The Company agreed to pay Dr. Blevins a $230,000 annual base
salary which is subject to annual merit adjustments, a bonus of up to 35% of his
base salary  determined  at the  discretion of the Board of Directors and annual
awards of stock options of up to 65,000 shares  determined at the  discretion of
the Board of  Directors.  As an  inducement  to Dr.  Blevins  to enter into this
agreement  the  Company  granted  him a one-time  nonqualified  stock  option to
purchase  120,000  shares at the  September  26, 1996 fair market value price of
$8.625, which vests and becomes exercisable on the third anniversary of the date
of grant, e.g., September 26, 1999; provided,  however,  that the vesting of 50%
of the options shall  accelerate to the day immediately  following the twentieth
consecutive trading day on which the closing price of the Company's Common Stock
shall have exceeded $20 per share, and the remaining 50% shall accelerate to the
day immediately  following the twentieth  consecutive  trading day in which such
closing price shall have exceeded $25 per share.

         The Company's policy provides benefits to the named executive  officers
in  the   event   of  a   "change-in-control"   of   the   Company.   The   term
"Change-in-Control" generally is defined to mean: (i) the acquisition (including
as a result of a  merger)  by  any  person  or  persons  acting  in  concert  of
beneficial  ownership,  directly or  indirectly,  of  securities  of the Company
representing  more than 33% of the combined voting power of the then outstanding
voting securities of the Company; or (ii) the failure of the individuals who, as
of February  6, 1998  constituted  the Board of  Directors  of the Company  (the
"Incumbent  Board"),  or thereafter  were nominated for election to the Board of
Directors by the vote of at least  two-thirds of the directors  then  comprising
the Incumbent Board, to constitute at least a majority of the Board of Directors
subsequent to such date. In the event of a "change-in-control",  the Company (1)
in accordance with its then prevailing payroll practices,  shall continue to pay
their  prevailing  annual base salary and an amount  equal to the average of the

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annual cash performance bonus the Company paid to the executive  officers in the
preceding three years,  for 2.99 years,  (2) shall continue to provide for their
participation,  to the extent  permitted by applicable  law or insurance  policy
contract,  in its group life, hospital,  medical and disability insurance plans,
and any  retirement,  pension or death benefit plans  ("Benefit  Plans") for the
duration  of the  severance  period or until such  earlier  time as they  obtain
employment which provides reasonable similar health and medical coverage and (3)
shall provide full outplacement services for 12 months; provided,  however, that
they shall have the option to receive the gross amount of the amounts payable to
them on account of their base salary and bonus, less withholdings and deductions
as required by  applicable  law, in a lump sum at any time during the  severance
period,  in which event their  participation  in and coverage  under the Benefit
Plans, and their entitlement to outplacement services, each shall terminate. The
Company  also has agreed to pay Mr.  Andrews an amount  equal to the  difference
between $14.25 and the closing  price of the  Company's  Common Stock on the day
any "change-in-control" occurs, multiplied by 30,000.

         The  Company's  policy in the event of the  named  executive  officers'
discharge without cause is as follows:  "Discharge  without cause" is defined as
the termination of the employment of the named executive  officers  without "due
cause",  any material  reduction in their duties or authority or a more than 30%
reduction  in their annual base salary from that for the  immediately  preceding
fiscal year.  The term "due cause" is defined as the named  executive  officers'
material  breach  of any of the  terms of  their  agreements  with the  Company,
willful gross negligence in carrying out their duties or commission of an act of
willful gross misconduct which has resulted in material harm to the Company,  as
determined  in good faith by the Board of  Directors.  In the event of discharge
without  cause,  the Company shall  continue to pay such  officers'  annual base
salary for 12 months and to provide for their participation in the Benefit Plans
until they  obtain  employment  which  provides  reasonably  similar  health and
medical coverage. The Company also shall provide such officers full outplacement
services  for 12 months.  In respect  of the year of such  discharge,  they also
shall be entitled to receive,  pro rated based on the number of completed months
of service during the year of discharge,  their cash bonus and the discretionary
performance-based  options  they  earned,  in  each  case as  determined  by the
Compensation  Committee  using the  performance  level of such  officers and the
Company for the prior year as their respective  performance  levels for the year
of discharge.





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                              Medco Research, Inc.

<TABLE>

Summary Compensation

         The following Summary  Compensation Table reflects certain  information
regarding  the most highly  compensated  executive  officers  whose total annual
salary and bonus for the last  completed  fiscal  year  exceeded  $100,000  (the
"named executive officer").

                           SUMMARY COMPENSATION TABLE
                               Annual Compensation
<CAPTION>
                                                                                            Long-Term
                                                         Bonus          Other             Compensation
                                                         Earned         Annual        Securities Underlying      All Other
Name & Principal Position          Year   Salary ($)     ($)(1)    Compensation ($)     Options/SAR's (#)     Compensation ($)
--------------------------         ----   ----------     ------    ----------------     -----------------     ----------------
<S> <C>
Roger D. Blevins, Pharm. D.       1997     230,000        69,902               --               95,000(2)               --
   President & Chief Executive    1996     230,000        70,003               --              185,000(3)               --
   Officer                        1995     180,826        34,266               --               80,000(4)               --

Glenn C. Andrews, CFA             1997     156,000        41,340               --               69,500(5)               --
    Vice President, Finance       1996      75,000(6)     22,239               --               40,000(7)
    & Administration and Chief
    Financial Officer
</TABLE>



(1)  Represents the amount earned by the named executive officer pursuant to the
     Company's  Incentive Plan. See Incentive  Compensation  Plan,  above, for a
     brief description of the Plan.

(2)  The options  granted to Dr. Blevins  consisted of 45,000 shares  associated
     with the 1997  annual  grant  dated  February  10,  1997 and 50,000  shares
     associated with the 1998 annual grant dated November 12 1997.

(3)  The options  granted to Dr. Blevins  consisted of 65,000 shares  associated
     with the 1996 annual  grant and 120,000  shares upon the signing of a three
     year  employment  agreement.  See  "Employment  Contracts;  Termination  of
     Employment and Change-in-Control Arrangements", above, for a description of
     Dr. Blevins' employment agreement.

(4)  The options  granted to Dr. Blevins  consisted of 60,000 shares  associated
     with the annual grant to him as Vice President of Research and  Development
     and additional 20,000 shares upon his election as Chief Operating Officer.

(5)  The options  granted to Mr. Andrews  consisted of 39,500 shares  associated
     with the 1997  annual  grant  dated  February  10,  1997 and 30,000  shares
     associated with the 1998 annual grant dated November 12, 1997.

(6)  Mr. Andrews joined the Company as Chief Financial Officer July 1, 1996 with
     an annual base salary of $150,000.

(7)  The options  granted to Mr.  Andrews of 40,000 shares was  associated  with
     joining the Company July 1, 1996.


Stock Option Plans And Stock Option Grants And Exercises In 1997

         The Company currently has two stock option plans in operation, the 1983
Option Plan and the 1989 Option Plan.  Both plans authorize the grant of options


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to purchase shares of Common Stock to directors, officers, significant employees
of the  Company  and to other  persons  who  provide  important  services to the
Company. The 1983 Option Plan, as subsequently amended,  authorized the grant of
options to purchase a total of 1,200,000  shares of Common  Stock,  and the 1989
Option  Plan,  as  subsequently  amended,  authorized  the grant of  options  to
purchase a total of 1,500,000 shares of Common Stock.

         Both  option  plans are  administered  by the  Compensation  Committee,
which, among other things, determines the persons who are to receive options and
the number of shares to be subject to each option. With respect to option grants
to members of the Compensation  Committee,  the option plans are administered by
the Board of Directors as a whole.

         Each  option  granted  under  the  option  plans  (except  for  certain
incentive stock options which must be exercised sooner) must be exercised within
a period  fixed by the  Compensation  Committee,  which may not exceed ten years
from the date of grant of the option. Options may be made exercisable,  in whole
or in installments, as determined by the Compensation Committee. Options may not
be  transferred  other than to immediate  family  members and trusts created for
their benefit, charitable organizations,  and by will or the laws of descent and
distribution.  Options  generally  must be  exercised  three  months  after  the
termination of the optionee's  association  with the Company,  except in certain
cases  such as death (in which  event the  options  may be  exercised  for up to
twelve months  following  death),  but not later than the expiration date of the
options.  Those  options  that are granted  under the option  plans at an option
exercise  price equal to not less than the fair market value of the Common Stock
on the date of grant to  persons  employed  by the  Company  (110% of such  fair
market  value  in the case of any  employee  who  owns in  excess  of 10% of the
Company's voting securities) will qualify to be "incentive stock options" within
the meaning of Section  422(b) of the  Internal  Revenue  Code of 1986,  and the
Compensation  Committee may designate  such options  accordingly.  Other options
granted under the option plans will be nonqualified  options. The exercise price
of  any  option  granted  under  the  option  plans  may be  paid  in  cash,  by
broker-assisted  cashless  exercises  or, with the  consent of the  Compensation
Committee,  partly or entirely  with Common Stock based on the fair market value
thereof on the date of exercise.

         The  option  plans both  limit the  maximum  number of shares for which
options may be granted to any one  participant to 33 1/3% of the shares reserved
for issuance  under such option plans.  No  participant  may in any one calendar
year receive options under the option plans with respect to more than 15% of the
shares reserved for issuance.

         The  following  table sets forth  information  regarding  the number of
stock options that were granted during the calendar year ended December 31, 1997
to the named executive  officers.  In addition,  in accordance with the rules of
the Commission,  the table shows the alternative grant date valuation for option
grants in 1997.
<TABLE>
<CAPTION>
                            Number of          % of Total
                            Securities        Options/SARs     Exercise                         Grant
                            Underlying         Granted to      or Base                           Date
                           Options/SARs       Employees in      Price                          Present
Name                      Granted (#)(1)      Fiscal Year       ($/Sh)     Expiration Date     Value (2)
----                      --------------      -----------       ------     ---------------     ---------
<S> <C>
Roger D. Blevins.....        45,000               12%            12.88        02/10/07          248,620
Roger D. Blevins.....        50,000               13%            15.75        11/12/07          337,930
Glenn C. Andrews.....        39,500               10%            12.88        02/10/07          218,233
Glenn C. Andrews.....        30,000                8%            15.75        11/12/07          202,758
</TABLE>

(1)  For 1997 annual  option  grants,  granted  February  10,  1997,  50% of the
     options awarded vest on and after the first  anniversary of the grant date,
     and the remaining 50% vest on and after the second anniversary of the grant
     date. For 1998 annual option grants,  granted November 11, 1997, 25% of the
     options awarded vest on and after the first  anniversary date of the grant,
     25% vest on and after the second anniversary date of the grant, 25% vest on
     and after the third  anniversary  of the grant date,  and the remaining 25%
     vest on and after the fourth anniversary of the grant date.



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(2)  In  accordance  with the  Securities  and Exchange  Commission  rules,  the
     Black-Scholes  option  pricing  model was chosen to estimate the grant date
     present  value of the options set forth in the above table.  The fair value
     of  each  option  grant  is  estimated  on the  date  of  grant  using  the
     Black-Scholes  option-pricing  model  with the  following  assumptions  for
     grants  in  1997:  dividend  yield  of zero;  expected  volatility  of 37%;
     risk-free  interest rate of 6%; and expected  life of five years.  The real
     value of the options in the above table depends upon the actual performance
     of the stock underlying the options during the applicable period.

The following table sets forth information regarding the exercise of options and
the numbers of  unexercised  stock  options held by named  executive  officer at
December 31, 1997.
<TABLE>

                     AGGREGATED OPTION/SAR EXERCISES IN 1997
                   AND OPTION/SAR VALUES AT DECEMBER 31, 1997
<CAPTION>

                                                            Number of Securities                Value of Unexercised
                            Shares                         Underlying Unexercised                   in-the-Money
                          Acquired on      Value               Options/SARs at                     Options/SARs at
                           Exercise       Realized             Fiscal Year-End                 Fiscal Year-End ($)(2)
Name                         (#)          ($)(1)        Exercisable      Unexercisable      Exercisable      Unexercisable
----                         ---          ------        -----------      -------------      -----------      -------------
<S> <C>
Roger D. Blevins.....        --             --            121,400           258,600            208,550          825,825
Glenn C. Andrews.....        --             --             40,000            69,500            167,500           44,438
</TABLE>


(1) The  computation  of the value realized  amount is the aggregate  difference
between the option  exercise price and the market closing price of the Company's
Common Stock on the American Stock Exchange on the dates of exercise.

(2) The  computation  of the value of  unexercised  in-the-money  options is the
aggregate difference between the option exercise price and the December 31, 1997
closing price of the Company's Common Stock on the American Stock Exchange.

Other Benefits Plans

         The Company sponsors an IRS approved 401(K) retirement plan.  Employees
become  eligible to participate  in the plan  beginning on the  enrollment  date
coinciding  with or  following  90 days of  employment.  Enrollment  periods are
limited to January  1,  April 1, July 1 and  October 1 of each year.  The 401(K)
plan allows  employees to  contribute a portion of their  pre-tax  earnings into
their own retirement  account.  Eligible employees may contribute between 2% and
15% of their  annual  income  up to the  annual  limits  established  by the IRS
yearly. The Board of Directors  authorized the Company, for those years in which
it achieves the  performance  goals  established in advance by the  Compensation
Committee,  to match 50% of each  employee's  annual plan  contribution  up to a
maximum of 2% of the salary of such employee, such Company contributions to vest
equally over the first four years of service.





                                    9 of 17
<PAGE>
                              Medco Research, Inc.


Report of the Compensation Committee for 1997 Executive Compensation

         The Compensation Committee of the Board of Directors, which is composed
entirely  of  directors  who  have  never  been  employees  of the  Company,  is
responsible for setting and  administering the policies and programs that govern
both annual and long-term compensation.

         In 1991 the Company adopted a Management Incentive Plan (the "Incentive
Plan") to provide  additional cash compensation to key Company  executives based
on their  individual  performance  as well as the financial  performance  of the
Company. Plan participants must be approved by the Compensation Committee, which
establishes annual ceiling amounts of distributions under the Incentive Plan for
each  participant  based  on such  individual's  annual  salary.  The  executive
compensation  program  is  designed  to align  compensation  with the  Company's
business strategy, values and management initiatives.

         In  1996 the Company  retained the Human Strategies Group of Deloitte &
Touche,  LLP to conduct a  comprehensive  comparative  study  (the  "Comparative
Study") of the  Company's  compensation,  annual and long-term  components,  and
benefits  programs  for  its  executive  officers  and  other  employees.   This
Comparative  Study was  highly  utilized  by the  Company  with  respect to 1997
compensation  and  benefits  programs,  and is  intended to be the basis of such
programs for the next few years,  subject to the Committee's  annual reviews for
possible adjustment.  By having a significant amount of compensation in the form
of annual bonus and stock  options  awarded at the  discretion  of the Committee
based 10% on each  executive's  performance  of his or her own set of individual
objectives and 90% on the Company's achievement of its corporate objectives,  as
described below, the program is intended to:

     o      Provide  incentive to implement the Company's annual  objectives and
            long-term strategy aligned with the interests of shareholders;

     o      Reward superior performance; and

     o      Help  attract and retain key  executives  critical to the  long-term
            success of the Company.

         The  Company's  executive  compensation  program  consists  of two  key
elements: (1) an annual component, i.e., base salary and annual bonus, and (2) a
long-term component, i.e. stock options. The amount of salary, bonus and options
granted for 1997 was determined by, among other  measures,  comparison  with the
data in the Comparative  Study, as described  above,  with the goal of providing
total   compensation   that   approximates  the  median  of  the  range  of  the
compensation,  both  in the  aggregate  and  for  each  compensation  component,
reported in the Comparative Study to have been paid by comparable companies. The
program  substantially  rewards the management team if the Company  achieves its
corporate  objectives,   and  it  also  recognizes  meaningful   differences  in
individual  performance  and offers the opportunity to earn rewards when merited
by individual performance.

         For 1997 the Board of Directors determined that the Company's corporate
objectives were 80% achieved,  and the  Compensation  Committee  determined that
achievement of individual objectives ranged from 114% to 150%.

         The  policies  with respect to each of these  elements,  as well as the
basis for determining the 1997 compensation of the Company's President and Chief
Executive Officer, Dr. Blevins, are described below.





                                    10 of 17
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                              Medco Research, Inc.


   (1) Annual Component: Base Salary and Annual Bonus

         Base Salary. Base salaries for executive officers are determined by the
Committee  with  reference to the salary range for each position as reflected by
the  associated  job  description  and a general  assessment of the  executive's
performance,  experience and potential. The Committee establishes these salaries
annually or in connection with the officer's employment agreement, if any.

         Annual  Bonus.  An  annual  bonus  may be  paid to  executive  officers
following the end of each fiscal year, up to a maximum percentage of base salary
as determined  by the  Committee  for such year either in accordance  with their
respective  employment  agreements,  if  any,  or  otherwise  based  on the  job
description.  The  percentage  of base  salary  is 35% for the  Chief  Executive
Officer  and 30% for other  executive  officers.  These bonus  percentages  were
consistent  with the  information  provided  in the  Comparative  Study.  Ninety
percent  (90%)  of the  bonus  is  based  on the  Company's  achievement  of its
corporate  objectives,  and 10% of the bonus is awarded based on the Committee's
evaluation of the officer's achievement during the year of his or her individual
objectives.  The Committee allows up to a maximum of 125% of the named executive
officer's  bonus  to be  awarded  based on  over-achievement  of  corporate  and
individual  objectives;  however,  no bonus  shall be  awarded in respect of the
achievement of corporate and individual  objectives  unless at least 67% or 80%,
respectively,  of the  corporate  or  individual  objectives  is  achieved.  All
objectives  were approved by the President of the Company  except that the Chief
Executive  Officer's  objectives  were  approved by the Committee and the entire
Board.

   (2) Long-Term Component:

         Stock Options. In 1993, the Committee established levels for the amount
of annual stock options to be granted to the Chief  Executive  Officer and other
executives.  Data in the Comparative Study confirmed these levels to approximate
the median of the range of the awards  reported to have been paid by  comparable
companies  (up to 65,000  shares for the  President  and 40,000  shares for Vice
Presidents/Officers).  The Committee awards options  exercisable for a period of
10 years to buy a number  of  shares of the  Company's  Common  Stock at a price
equal to the market  price of the stock on the date of grant.  For 1997 and 1998
option grants,  the Committee  considered such events and factors which occurred
during  the year and took into  account  the  accomplishment  of  corporate  and
individual objectives. For 1997 annual option grants, granted February 10, 1997,
50% of the options awarded vest on the first  anniversary of the grant date, and
the remaining  50% vest on the second  anniversary  of the grant date.  For 1998
annual option grants, granted November 11, 1997, 25% of the options awarded vest
on the first  anniversary date of the grant, 25% vest on the second  anniversary
date of the grant, 25% vest on the third  anniversary of the grant date, and the
remaining 25% vest on the fourth  anniversary  of the grant date.  The Committee
allows up to a maximum of 125% of the named executive  officers' option grant to
be awarded based on  over-achievement  of corporate and  individual  objectives;
however,  no option  grant  shall be awarded in  respect of the  achievement  of
corporate and individual objectives unless at least 67% or 80%, respectively, of
the corporate or individual objectives is achieved. The Committee believes that,
because  these  options gain value only to the extent the price of the Company's
Common Stock  increases  above the option  exercise price during the life of the
option,  management's equity  participation  offers a significant  incentive and
helps  create  a  long-term  partnership  between  management/owners  and  other
shareholders.

         The Committee set the 1997 annual and  long-term  compensation  for Dr.
Blevins  near the median of the range paid by  comparable  companies.  Effective
September 26, 1997, his annual salary was adjusted to $241,500,  and in February
1997 he received a 1997 annual  option  grant of 45,000  shares  which are to be
earned and vested as described above. The Committee determined that for 1997 Dr.
Blevins was entitled to 86% of his bonus  potential of up to 35% of base salary,
based 90% on the Company's 80%  achievement of its corporate  objectives and 10%
on Dr. Blevins' 114%  achievement of his individual  objectives:  (1) increasing
shareholder  value;  (2) providing for  commercialization  of products;  and (3)
acquisition of adenosine-based technology.




                                    11 of 17
<PAGE>
                              Medco Research, Inc.



         The Compensation Committee of the Board of Directors

                            Albert D. Angel, Chairman
                                Jay N. Cohn, M.D.
                             Marvin S. Hausman, M.D.


Compensation of Directors

         The Company pays each  director who is not a full-time  employee of the
Company a  quarterly  retainer  fee of $4,000.  Each such  director is also paid
$1,000  per diem for each Board  meeting  and the  Annual  Shareholders  Meeting
attended by that  director  and $400 for each Board or Board  Committee  meeting
held by  telephone  conference  call  lasting up to two hours but greater than a
half hour and $600 for each such meeting lasting more than two hours.  Directors
also are reimbursed for their travel expenses  incurred to attend  meetings.  In
order to attract experienced individuals, pursuant to the Company's stock option
plans persons  initially elected to the Company's Board of Directors who are not
full-time  employees  of the  Company  automatically  are  granted  an option to
purchase 20,000 shares of the Company's  Common Stock, and upon each re-election
as a director at the Annual Meeting of Shareholders, directors automatically are
granted an option to purchase  3,000 shares of the Company's  Common Stock.  All
such director  options have a term of 10 years, are granted at an exercise price
equal  to the fair  market  value  of such  shares  on the date of grant of such
options, and such options vest after one year.

         In  October  1996 the  Company  changed  its  option  grant  policy  by
increasing the term of new option grants to directors and employees from four to
ten years.  Accordingly,  in order to extend the  benefits of such policy to the
current  directors  whose initial option grant had a term of four years and have
expired, on November 12, 1997 the Board granted to Eugene L. Step and William B.
Bartlett a ten-year option to purchase 20,000 and 10,000 shares of Common Stock,
respectively,  at a price of $15.75,  the closing price of the Company's  Common
Stock on the American Stock  Exchange on the trading date of grant.  The expired
initial  election  options  granted to Messrs.  Step and  Bartlett  had exercise
prices of $16.5625 and $12.875,  respectively. On November 12, 1997, the Company
also granted  Mr. Bartlett a ten-year option to purchase 10,000 shares of Common
Stock at $15.75 in consideration of consulting services rendered.

         Mr.  Richard C. Williams,  Chairman of the Board,  continued to provide
consulting  services  to  the  Company  during  1997  pursuant  to a  consulting
agreement which commenced December 1, 1994. For his consulting  services in 1997
on, among other things, the Company's potential  acquisitions,  its then pending
litigations and its financial  public  relations,  the Company paid Mr. Williams
$144,000 as well as related travel expenses.





                                    12 of 17
<PAGE>
                              Medco Research, Inc.


Performance Graph

         Set forth below is a performance graph, comparing the yearly cumulative
total  stockholder  return  on  the  Company's  Common  Stock  with  the  yearly
cumulative total  stockholder  return on stocks included in the S&P 500 Index, a
broad equity market index, and the yearly  cumulative total  stockholder  return
weighted by market  capitalization  at the  beginning of each period for which a
return is indicated on stocks included in the Company's Industry Peer Index. The
Industry Peer Index comprises of the 45 U.S. pharmaceutical and biotechnological
companies listed below, with the following  criteria:  market  capitalization of
less than $200  million,  assets of less than $100 million,  revenues  under $25
million and less than 100 employees.  The investment comparisons assume the base
year (1992) is equal to an index of 100.  Each of the  cumulative  total returns
was computed  assuming the reinvestment of stock  dividends.  The years compared
are 1993, 1994, 1995, 1996 and 1997 calendar years.
<TABLE>


                           INDEXED CUMULATIVE RETURNS
<CAPTION>
<S> <C>
                                                                1992     1993       1994      1995       1996      1997
                                                                ----     ----       ----      ----       ----      ----
Medco Research, Inc..........................................   100      88.97      66.91     61.03      61.76     82.35
Industry Peer Index (1)......................................   100      78.41      39.90     77.85      83.23     82.48
S&P 500 Index................................................   100     110.08     111.54    153.45     188.69    251.64
</TABLE>

(1) The following  companies are included in the Company's  Industry Peer Index:
Abaxis Inc., Accumed International Inc., Advanced Magnetics Inc., Alkermes Inc.,
Alteon Inc.,  Aronex  Pharmaceuticals,  Atrix Labs Inc.,  Boston Life  Sciences,
Cambridge  Neuroscience  Inc.,  Chantal  Pharmaceutical  Corp.,  CIMA Labs Inc.,
Columbia Laboratories, Cortech Inc., Corvas International, Cytel Corp., Dynagen,
Emisphere  Technologies,  Epitope  Inc.,  Geltex  Pharmaceuticals  Inc.,  Genome
Therapeutics Corp.,  Guildford  Pharmaceuticals Inc.,  Immunomedics Inc., Inhale
Therapeutic   Systems,   Insite   Vision,   Lidak   Pharmaceuticals,   Macrochem
Corporation,  Medicis  Pharmaceuticals,  Metra Biosystems Inc., MGI Pharma Inc.,
Neoprobe Corp., Neo Rx Corp., Neurex Inc., Oncogene Science Inc., Penederm Inc.,
Pharmacyclics,  Pharmos  Corporation,  Polymedica  Industries  Inc., Sano Corp.,
Sciclone    Pharmaceuticals    Inc.,   Shaman    Pharmaceuticals   Inc.,   Sonus
Pharmaceuticals  Inc., T Cell  Sciences  Inc.,  Technical  Chemicals & Products,
Techniclone Corp., and Theragenics Corp.




                                    13 of 17
<PAGE>
                              Medco Research, Inc.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT

Security Ownership Of Management And Others

The  following  table sets forth as of April 20, 1998 the number and  percentage
ownership of the  Company's  voting  securities  by all persons  (including  any
"group" as that term is defined in Section  13(d)(3) of the Securities  Exchange
Act of 1934)  known  to the  Company  to own  beneficially  more  than 5% of the
Company's Common Stock, being the only outstanding class of the Company's voting
securities, based upon reports filed by each of such persons with the Securities
and  Exchange  Commission,  and  the  number  and  percentage  ownership  of the
Company's equity  securities so owned by each director,  each executive  officer
named in the  compensation  tables in this Proxy  Statement and by all directors
and such  executive  officers as a group.  Except as  otherwise  indicated,  and
subject to applicable  community  property and similar laws, each of the persons
named has sole voting and investment  power with respect to the securities owned
by him. An asterisk denotes beneficial ownership of less than 1%.
<TABLE>
<CAPTION>
<S> <C>
                                                                   Number of Shares          Percent of
Name And Address                                                 Beneficially Owned         Common Stock
----------------                                                 ------------------         ------------
State of Wisconsin...........................................          1,000,000                 9.49
     Investment Board
     P.O. Box 7842
     Madison, Wisconsin 53707
G. W. Capital, Inc...........................................            607,900                 5.77
     10900 N.E. 8th Street
     Suite 235
     Bellevue, Washington 98004
Glenn C. Andrews.............................................             60,750 (1)              *
Roger D. Blevins, Pharm.D....................................            203,532 (2)             1.93
Albert D. Angel..............................................             26,500 (3)              *
William M. Bartlett..........................................             10,120 (4)              *
Jay N. Cohn, M.D.............................................             23,000 (5)              *
Marvin S. Hausman, M.D.......................................            107,347 (6)             1.02
Mark B. Hirsch...............................................             23,000 (7)              *
Eugene L. Step...............................................              9,000 (8)              *
Richard C. Williams..........................................            123,100 (9)             1.17
All Directors and Executive Officers of the Company
as a Group (nine persons)....................................            586,349 (10)            5.56
</TABLE>

(1)  Includes 59,750 shares subject to currently exercisable options held by Mr.
     Andrews.

(2)  Includes  172,175 shares subject to currently  exercisable  options held by
     Dr. Blevins.

(3)  Includes 26,000 shares subject to currently exercisable options held by Mr.
     Angel.

(4)  Includes 9,000 shares subject to currently  exercisable options held by Mr.
     Bartlett.

(5)  Includes 23,000 shares subject to currently exercisable options held by Dr.
     Cohn.

(6)  Includes 23,000 shares subject to currently exercisable options held by Dr.
     Hausman.



                                    14 of 17
<PAGE>
                              Medco Research, Inc.


(7)  Includes 23,000 shares subject to currently exercisable options held by Mr.
     Hirsch.

(8)  Includes 9,000 shares subject to currently  exercisable options held by Mr.
     Step.

(9)  Includes 9,000 shares subject to currently  exercisable options held by Mr.
     Williams.

(10) Includes an aggregate of 353,925  shares  subject to currently  exercisable
     options held by executive officers and directors of the Company.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         See Item 11, "Executive Compensation - Compensation of Directors" , for
a discussion  of the  Company's  Consulting  Agreement  with its Chairman of the
Board.




                                    15 of 17
<PAGE>
                              Medco Research, Inc.


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                     MEDCO RESEARCH, INC.

                                     By:      /s/ Roger D. Blevins
                                        --------------------------------
                                     Roger D. Blevins, Pharm. D.,
                                     President and Chief Executive
                                     Officer

                                     Date:    April 30, 1998

                                     By:      /s/ Glenn C. Andrews
                                        --------------------------------
                                     Glenn C. Andrews
                                     Vice President, Finance and
                                     Administration and Chief
                                     Financial Officer

                                     Date:    April 30, 1998

                                     By:      /s/ Adam C. Derbyshire
                                        --------------------------------
                                     Adam C. Derbyshire
                                     Corporate Controller and
                                     Secretary

                                     Date:    April 30, 1998


Pursuant to the requirement of the Securities  Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.


By:      /s/ Richard C. Williams                        Date:    April 30, 1998
         -----------------------------------
         Richard C. Williams,
         Chairman of the Board


By:      /s/ Albert D. Angel                            Date:    April 30, 1998
         -----------------------------------
         Albert D. Angel, Director


By:      /s/ William M. Bartlett                        Date:    April 30, 1998
         -----------------------------------
         William M. Bartlett, Director


By:      /s/ Jay N. Cohn, M.D.                          Date:    April 30, 1998
         -----------------------------------
         Jay N. Cohn, M.D., Director




                                    16 of 17
<PAGE>
                              Medco Research, Inc.


By:      /s/ Marvin S. Hausman, M.D.                    Date:    April 30, 1998
         -----------------------------------
         Marvin S. Hausman, M.D., Director


By:      /s/ Mark B. Hirsch                             Date:    April 30, 1998
         -----------------------------------
         Mark B. Hirsch, Director


By:      /s/ Eugene L. Step                             Date:    April 30, 1998
         -----------------------------------
         Eugene L. Step, Director



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