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                                                                  EXHIBIT 10.13

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT is made and entered into as of the 16th day of March, 1998,
by and between NEOPHARM, INC., a Delaware corporation (the "Company") and JAMES
M. HUSSEY ("Executive").

                                   WITNESSETH:

      WHEREAS, the Company desires to employ the Executive, and the Executive
desires to accept such employment, upon the terms and conditions hereinafter set
forth;

      NOW, THEREFORE, in consideration of the covenants and mutual agreements
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:

1.    Employment. Throughout the Term (as defined in Section 2 below), the
      Company shall employ Executive as provided herein, and Executive hereby
      accepts such employment. In accepting such employment, Executive states
      that, to the best of his knowledge, he is not now, and by accepting such
      employment, will not be, under any restrictions in the performance of the
      duties contemplated under this Agreement as a result of the provisions of
      any prior employment agreement or non-compete or similar agreement to
      which Executive is or was a party.

2.    Term of Employment. The term of Executive's employment by the Company
      hereunder shall commence on March 16, 1998 (the "Effective Date") and
      shall continue thereafter unless sooner terminated as a result of
      Executive's death or in accordance with the provisions of Section 7 below
      (the "Term").

3.    Duties. Throughout the Term, and except as otherwise expressly provided
      herein, Executive shall be employed by the Company as the President and
      Chief Executive Officer ("CEO") of the Company. In such capacity,
      Executive shall devote his full time to the performance of his duties as
      President and CEO of the Company in accordance with the Company's By-laws,
      this Agreement and the directions of the Company's Board of Directors. In
      addition, the Company shall promptly appoint Executive to the Board and
      thereafter nominate Executive as a nominee for election to the Board and
      solicit proxies for his election for so long as this Agreement is in
      effect. Without limiting the generality of the foregoing, throughout the
      Term Executive shall faithfully perform his duties as President and CEO at
      all times so as to promote the best interests of the Company.

4.    Compensation.

         (a)      Salary. For any and all services performed by Executive under
                  this Agreement during the Term, in whatever capacity, the
                  Company shall pay to Executive an annual salary of Two Hundred
                  Fifty Thousand Dollars ($250,000) per year (the "Salary") less
                  any and all applicable federal, state and local payroll and
                  withholding taxes. The Salary shall be paid in the same
                  increments as the Company's normal payroll, but no less
                  frequent than monthly and prorated, however, for any period of
                  less than a full month. The Salary will be reviewed annually
                  by the Compensation Committee of the Board and a determination
                  shall be made at that time as to the appropriateness of an
                  increase, if any, thereto.

            (b)   Bonus. In addition to the Salary, Executive shall be eligible
                  to receive from the Company an incentive compensation bonus
                  (the "Bonus") based on a percentage of his Salary. The Bonus,
                  if any, shall be determined based on the achievement by the
                  Company of certain specific strategic plans and goals


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                  (the "Performance Goals") during the preceding calendar year
                  (the "Measurement Period") as shall be determined by the Board
                  in consultation with the Executive. The initial Performance
                  Goals will be established by the Board within ninety (90) days
                  of Executive's employment hereunder. Thereafter, the
                  Performance Goals for each Measurement Period shall be
                  established as promptly as possible in each such Measurement
                  Period, with the expectation that the Performance Goals be in
                  place each year prior to distribution of the Company's annual
                  proxy materials. Following each Measurement Period, the
                  Compensation Committee of the Board shall review the
                  Performance Goals for the prior Measurement Period in light of
                  the Company's actual performance during such Measurement
                  Period as reflected on the Company's audited financial
                  statements. Achievement of various levels of the Performance
                  Goals shall result in the following payments as a percentage
                  of Salary:

<TABLE>
<CAPTION>
                                                BONUS AS PERCENT
         LEVEL OF ACHIEVEMENT                       OF SALARY
         <S>                                    <C>
         Below Threshold                                  0%
         Threshold Goal                               20-50%
         TargetGoal                                      50%
         Stretch Goal                                 50-80%
</TABLE>

                           Payment of each year's Bonus, if any, shall be made
                  within thirty (30) days after the Company's performance for
                  the Measurement Period is established on the basis of the
                  Company's audited financial statements. In addition, and at
                  its sole discretion, the Board may award additional
                  compensation to Executive based on Executive's contributions
                  to the Company.

5.       Benefits and Other Rights. In consideration for Executive's performance
         under this Agreement, the Company shall provide to Executive the
         following benefits:

         (a)      The Company will provide Executive with cash advances for or
                  reimbursement of all reasonable out-of-pocket business
                  expenses incurred by Executive in connection with his
                  employment hereunder; provided, Executive adheres to any and
                  all reasonable policies established by Company from time to
                  time with respect to such reimbursements or advances,
                  including, but not limited to, a requirement that Executive
                  submit supporting evidence of any such expenses to the
                  Company.

         (b)      The Company will provide Executive with a monthly car
                  allowance in the amount of Seven Hundred and Fifty Dollars
                  ($750.00) subject to standard payroll withholding for taxes.

         (c)      The Company will provide Executive and his family with group
                  medical coverage under the terms of the Company's health
                  insurance plan, but subject to completion of normal waiting
                  periods. During any such waiting period, or in the event that
                  at the date of this Agreement the Company's group medical
                  coverage is not yet in effect, then, in either case, Company
                  will pay, or reimburse Executive for, the cost of COBRA
                  coverage for Executive and his family under his prior health
                  plan.

         (d)      During the Term the Executive shall be entitled to three (3)
                  weeks paid vacation, it being understood and agreed that
                  unused vacation shall not be carried over from one year to the
                  next.

         (e)      As a one time benefit, the Company will reimburse, or pay
                  directly on Executive's behalf, the expenses, including, but
                  not limited to, realtor fees, associated with moving
                  Executive's family and household possessions


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                  from Naperville, Illinois to the northern suburbs of the
                  Chicago metropolitan area ("Moving Expenses"); provided, in
                  each case, that Executive shall provide such documentation of
                  all Moving Expenses as the Company shall reasonably request.

6. OPTIONS.

         (a)      The Company shall grant to Executive options pursuant to the
                  Company's 1995 Stock Plan (the "Option Plan"), as amended, to
                  purchase 400,000 shares of the Company's common stock at an
                  option exercise price of $4.75 per share of common stock (the
                  "Options") which was the fair market value (as determined
                  under the Option Plan) of the Company's common stock as of
                  January 12, 1998, which was the date of Executive's acceptance
                  of employment with the Company and which date shall be the
                  date of grant of the Options for purposes of the Option Plan
                  (the "Date of Grant"). The Options shall vest in equal
                  installments of 100,000 Options per year on each of the first
                  four anniversaries of the Date of Grant. The Options shall not
                  be exercisable subsequent to the date ten (10) years after the
                  Date of Grant. In all other respects the Options shall be
                  governed by the terms and conditions of the Option Plan.

         (b)      In the event the Company shall elect to obtain additional
                  capital investment in the future, after the completion of any
                  such capital investment program by the Company, the Board will
                  evaluate the awarding of additional stock options to Executive
                  based on the success of such fundraising endeavors and
                  Executive's contributions to that success.

7.       TERMINATION OF THE TERM.

         (a)      The Company shall have the right to terminate the Term,
                  effective upon delivery of written notice of termination to
                  Executive setting forth the basis of such termination, under
                  the following circumstances:

                  (i)      Executive shall die; or

                  (ii)     With or without cause, effective ninety (90) days
                           after delivery of written notice to Executive by the
                           Company or, in lieu of said ninety (90) day notice,
                           upon payment to Executive of three months
                           compensation based on his then current Salary.

         (b)      This Agreement may be terminated by the Executive at any time
                  upon ninety (90) days prior written notice to the Company.

8.       Effect of Expiration or Termination of the Term. Promptly following the
         termination of the Term, and except as provided in Section 7 or as
         otherwise expressly agreed by the Company, Executive shall

         (a)      provide the Company with all reasonable assistance necessary
                  to permit the Company to continue its business operations
                  without interruption and in a manner consistent with
                  reasonable business practices; provided, however, that such
                  transition period shall not exceed thirty (30) days after
                  termination nor require more than forty (40) hours of
                  Executive's time per week. In the event that the Company shall
                  request Executive to provide transitional assistance after the
                  effective date of termination, Executive shall be paid at any
                  hourly rate based on an 8 hour work day, a 2,080 hour work
                  year and his then current Salary, based upon time sheets
                  submitted by Executive specifying the services performed and
                  the amount of time expended;

         (b)      deliver to the Company possession of any and all property
                  owned or leased


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                  by the Company which may then be in Executive's possession or
                  under his control, including without limitation any and all
                  such keys, credit cards, automobiles, equipment, supplies,
                  books, records, files, computer equipment, computer software
                  and other such tangible and intangible property of any
                  description whatsoever. If, following the expiration or
                  termination of the Term, Executive shall receive any mail
                  addressed to the Company, then Executive shall immediately
                  deliver such mail, unopened and in its original envelope or
                  package, to the Company; and

         (c)      Other than as provided in Section 7, upon a termination of
                  employment all other benefits and/or entitlements to
                  participate in programs or benefits, if any, will cease as of
                  the effective date medical insurance coverage at his own
                  expense as provided by applicable law or written Company
                  policy.


9.       CONFIDENTIALITY. The Executive acknowledges that during the period of
         his employment by the Company, and in his performance of services
         hereunder, he will be placed in a relationship of trust and confidence
         regarding the Company and its affairs. In the course of and due to that
         relationship he will have contact with the Company's customers,
         suppliers, affiliates, and distributors and their personnel. In the
         course of the aforesaid relationship, he will have access to and will
         acquire confidential information relating to the business and
         operations of the Company, including, without limitation, information
         relating to processes, plans and methods of operation of the Company.
         The Executive acknowledges that any such information that is not a
         trade secret, nonetheless constitutes confidential information as
         between himself and the Company, that the disclosure thereof (or of any
         information which he knows relates to confidential, trade, or other
         secret aspects of the Company's business) would cause substantial loss
         to the goodwill of the Company, and will continue to be made known to
         Executive only because of the position of trust and confidence which he
         will continue to occupy hereunder. In view of the foregoing, and in
         consideration of the covenants and premises of this Agreement, the
         Executive agrees that he will not, at any time during the term of his
         employment, and for a period of twelve months thereafter, disclose to
         any person, firm or Company any trade secrets or confidential
         information or such ideas which he may have acquired or developed or
         may acquire or develop relating to the Business of the Company while
         serving the Company as an Executive.

10.      REMEDIES.

         (a)      The covenants of Executive set forth in Section 9 are separate
                  and independent covenants for which valuable consideration has
                  been paid, the receipt, adequacy and sufficiency of which are
                  acknowledged by Executive, and have also been made by
                  Executive to induce the Company to enter into this Agreement.
                  The aforesaid covenants may be availed of, or relied upon, by
                  the Company in any court of competent jurisdiction, and shall
                  form the basis of injunctive relief and damages including
                  expenses of litigation (including, but not limited to,
                  reasonable attorney's fees upon trial and appeal) suffered by
                  the Company arising out of any breach of the aforesaid
                  covenants by Executive. The covenants of Executive set forth
                  in this Section 10 are cumulative to each other and to all
                  other covenants of Executive in favor of the Company contained
                  in this Agreement and shall survive the termination of this
                  Agreement for the purposes intended.

         (b)      The covenants contained in Section 9 above shall be construed
                  as agreements which are independent of any other provision of
                  this Agreement, and the existence of any claim or cause of
                  action by any party hereto against any other party hereto, of
                  whatever nature, shall not constitute a defense to the
                  enforcement of such covenants. If any of such covenants shall
                  be deemed unenforceable by virtue of its scope in terms of
                  geographical area, length


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                  of time or otherwise, but may be made enforceable by the
                  imposition of limitations thereon, Executive agrees that the
                  same shall be enforceable to the fullest extent permissible
                  under the laws and public policies of the jurisdiction in
                  which enforcement is sought. The parties hereto hereby
                  authorize any court of competent jurisdiction to modify or
                  reduce the scope of such covenants to the extent necessary to
                  make such covenants enforceable.

11.      ENFORCEMENT COSTS. If any legal action or other proceeding is brought
         for the enforcement of this Agreement, or because of an alleged
         dispute, breach, default or misrepresentation in connection with any
         provisions of this Agreement, the successful or prevailing party or
         parties shall be entitled to recover reasonable attorney's fees, court
         costs and all expenses even if not taxable as court costs (including,
         without limitation, all such fees, costs and expenses incident to
         appeal and other post-judgment proceedings), incurred in that action or
         proceeding, in addition to any other relief to which such party or
         parties may be entitled. Attorney's fees shall include, without
         limitation, paralegal fees, investigative fees, administrative costs,
         sales and use taxes and all other charges billed by the attorney to the
         prevailing party.

12.      NOTICES. Any and all notices necessary or desirable to be served
         hereunder shall be in writing and shall be

                  (a)      personally delivered, or

                  (b)      sent by certified mail, postage prepaid, return
                           receipt requested, or guaranteed overnight delivery
                           by a nationally recognized express delivery Company,
                           in each case addressed to the intended recipient at
                           the address set forth below.

                  (c)      For notices sent to the Company:

                                    NeoPharm, Inc.
                                    100 Corporate North
                                    Bannockburn, Illinois 60015

                                    Telephone No.: (847) 295-8678
                                    Facsimile No.: (847) 295-8654

                           With a copy to:

                                    Burke, Warren, Mackay & Serritella, P.C.
                                    330 N. Wabash, Suite 2200
                                    Chicago, Illinois 60611
                                    Attn: Christopher R. Manning

                  (d)      For notices sent to Executive:

                                    James M. Hussey
                                    4111 Kingshill Circle
                                    Naperville, Illinois 60564

         Either party hereto may amend the addresses for notices to such party
         hereunder by delivery of a written notice thereof served upon the other
         party hereto as provided herein. Any notice sent by certified mail as
         provided above shall be deemed delivered on the third (3rd) business
         day next following the postmark date that it bears.

13.      ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of the
         parties

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         hereto with respect to the subject matter hereof, and all prior
         negotiations, agreements and understandings are merged herein. This
         Agreement may not be modified or revised except pursuant to a written
         instrument signed by the party against whom enforcement is sought.

14.      SEVERABILITY. The invalidity or unenforceability of any provision
         hereof shall not affect the enforceability of any other provision
         hereof, and except as otherwise provided in Section 11 above, any such
         invalid or unenforceable provision shall be severed from this
         Agreement.

15.      WAIVER. Failure to insist upon strict compliance with any of the terms
         or conditions hereof shall not be deemed a waiver or such term or
         condition, and the waiver or relinquishment of any right or remedy
         hereunder at any one or more times shall not be deemed a waiver or
         relinquishment of such right or remedy at any other time or times.

16.      GOVERNING LAW. This Agreement and the rights and obligations of the
         parties hereto shall be governed by and construed in accordance with
         the laws of the State of Illinois, without regard to its conflicts of
         laws provisions. Each party hereto hereby (a) agrees that any
         litigation which may be initiated with respect to this Agreement or to
         enforce rights granted hereunder shall be initiated in a court located
         in Cook County, Illinois and (b) consents to personal jurisdiction of
         such courts for such purpose.

17.      BENEFIT AND ASSIGNABILITY. This Agreement shall inure to the benefit of
         and be binding upon the Company and its successors and assigns. The
         rights and obligations of Executive hereunder are personal to him, and
         are not subject to voluntary or involuntary alienation, transfer,
         delegation or assignment.

                            [SIGNATURE PAGE FOLLOWS]


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         IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the day and year first above written.

                                                 NEOPHARM, INC.

                                                 By:
                                                 Its:

                                                 EXECUTIVE:

                                                 JAMES M. HUSSEY


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