<Page>
                                                                    EXHIBIT 4.32

                                                               DR. MARTIN BARKIN
                                                               President and CEO
                                                  Telephone: (905) 677-5500 #236
                                                       FACSIMILE: (905) 677-5494
                                                        CELLULAR: (416) 726-8870
                                                              mbarkin@draxis.com


                                                                   March 9, 2004

                                                         PERSONAL & CONFIDENTIAL

Mr. Mark Oleksiw
4265 Pinewood,
Pierrefonds, Quebec
H9H 2W1

       Since June 24th, 2002, the date you executed your original employment
agreement (the "Original Agreement"), DRAXIS Health Inc. ("DRAXIS" or the
"Corporation") has developed and expanded, commensurate with the corporate
growth and staffing changes, your duties and responsibilities. In addition,
there have been modifications to the terms of the Original Agreement.
Accordingly, both parties agree that it is beneficial to formally confirm the
current terms and conditions of your employment with DRAXIS.


1.     EMPLOYMENT
       Since July 1, 2003, you shall and have been employed with DRAXIS as its
Chief Financial Officer, ("CFO") on the terms and conditions contained in this
Agreement. You will report to the Chief Executive Officer, of DRAXIS ("CEO").
Without limiting the scope of your duties and responsibilities as CFO, you will
be responsible for the Corporation's financial reporting and assure full
compliance and complete control systems to be in conformity with applicable law
including conformity with the SARBANES-OXLEY ACT. You will arrange for the
provision of financial analytic and advisory services to our key operating
divisions as well as to the Corporation and such other tasks as are within your
skills and as are assigned from time to time by the CEO. Specifically you will
assure a sufficient skilled cadre of financial people within the Corporation to
carry the necessary refinements to our analytic and internal monitoring as well
as external reporting requirements. You will also be a member of DRAXIS's
Executive Operations Committee ("EOC") and will be expected to enter into a
cooperative working relationship with the other members of the EOC. In addition,
you will perform any additional employment responsibilities assigned to you by
the CEO of DRAXIS from time to time, provided that such responsibilities are
consistent with the executive nature of the position.

2.     BASE SALARY
       DRAXIS will pay to you during the term of this Agreement, effective
January 1, 2004 a gross salary of $200,000 per annum ("Base Salary"), payable
semi-monthly, in arrears, in 24 equal installments of $8,333.33. Such salary
shall be subject to review in accordance with DRAXIS's regular administrative
practices of salary review applicable to the executive officers of DRAXIS. Any
salary increases shall be determined on merit on the recommendation of the CEO
of DRAXIS and approval of the Board of Directors of DRAXIS. The CEO of DRAXIS
will inform you of any increases in your salary in advance of the implementation
date.

       As an officer of the Corporation, DRAXIS will provide and pay for
directors' and officers' liability insurance and in any event will indemnify and
save you harmless from any action arising within the scope of your employment
responsibilities for DRAXIS, and its Affiliates (as such term is defined in

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL                                                   Page 2

the CANADA BUSINESS CORPORATION ACT) ("Affiliates") [hereinafter collectively
referred to as the "DRAXIS Group"].

3.     BENEFITS
       You will be entitled to participate in all benefit plans which DRAXIS
shall, from time to time make available to its executive employees, subject to
applicable eligibility rules thereof. The benefits currently offered are:
       -   major medical
       -   drug
       -   dental
       -   group life
       -   long term disability
       -   accidental death and dismemberment

       You will also be entitled to an amount equivalent to 5% of your Base
Salary in lieu of participation in DRAXIS's Retirement Savings Program.

4.     STOCK OPTION PLAN
       Subject to DRAXIS Board of Directors' approval, you will be eligible to
participate in the DRAXIS Stock Option Plan, copy thereof provided herewith as
Schedule "A", which DRAXIS shall, from time to time, make available to
employees, in accordance with the terms and conditions of said plan. As at the
date hereof, the following grants of stock options to you remain outstanding and
may be exercised by you in accordance with the terms and conditions pursuant to
which each grant was made and the terms of this Agreement:

<Table>
<Caption>
       NO. OF OPTIONS                    PRICE                    EXPIRY DATE
       --------------                    -----                    -----------
          <S>                            <C>                      <C>
           20,000                        $ 3.66                   Aug.13, 2007
          100,000                        $ 2.36                   July 14, 2013
</Table>

5.     DEFERRED SHARE UNIT PLAN
       You will be eligible to participate in DRAXIS's Deferred Share Unit Plan,
in accordance with the terms and conditions of that plan, a copy thereof
provided herewith as Schedule "B". The Deferred Share Unit Plan has been
established to provide selected employees of DRAXIS and its Affiliates with the
opportunity to acquire share equivalent units convertible to cash or common
shares of DRAXIS.

6.     DISCRETIONARY BONUS
       The Board of Directors of DRAXIS, in its sole discretion, and upon
recommendation of the CEO of DRAXIS, based on the Bonus and Objectives Plan that
is in force for all senior executives of DRAXIS, may declare a bonus payable.
Such bonus payment is not guaranteed and payment of a discretionary bonus in any
prior year is not a promise or guarantee of payment in subsequent years.
Further, to receive any discretionary bonus payment, should one be declared, you
must be employed on December 31st of the calendar year for which the bonus is
declared. Should a discretionary bonus be declared, you may be eligible to
receive an amount up to a maximum equivalent to 40% of your Base Salary, or such
other amount as may be determined by the CEO of DRAXIS and the Board of
Directors of DRAXIS, in their sole discretion.

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL                                                   Page 3

7.     MEMBERSHIPS AND PUBLICATIONS
       DRAXIS will pay all professional memberships, dues and levies deemed
necessary to the conduct of your position.

8.     VACATION
       You shall be entitled to four weeks vacation per annum to be taken at a
time or times acceptable to the CEO of DRAXIS, having regard to its operations.
There shall be no vacation time carried over from one calendar year into the
following calendar year, unless previous authorization has been received from
the CEO of DRAXIS.

9.     EXPENSES
       DRAXIS agrees that it shall reimburse you for Automobile mileage
allowance as permitted by Canada Customs and Revenue Agency, all other
reasonable traveling and other out-of-pocket expenses actually and properly
incurred in connection with your duties with DRAXIS and within the policies that
are enacted from time to time by DRAXIS with respect to executive expenses. For
all such expenses you agree you will furnish statements and vouchers as and when
required by DRAXIS.

       DRAXIS agrees to provide you with a mobile phone, a BlackBerry and a
portable laptop that will remain at all time DRAXIS's property.

       DRAXIS will reimburse you for independent legal counsel with respect to
the review of this agreement to a maximum of $1,000 upon presentation of
appropriate receipts.

10.    DEDUCTIONS
       All salary and other payments and allowances outlined in this Agreement
are subject to such withholding and deduction at source as may be required by
law.

11.    EMPLOYEE'S COVENANTS
       You agree that you shall devote the whole of your working time, attention
and ability to the business of DRAXIS and shall use reasonable best efforts to
promote the interests of DRAXIS.

       You agree that you shall duly and diligently perform all the duties
assigned to you while in our employ and shall well and faithfully serve DRAXIS.

       You also agree that while employed with DRAXIS you shall not, without the
prior written consent of DRAXIS, engage or otherwise be concerned in any other
business or occupation, or become a director, officer, agent or employee of any
other entity.

       Furthermore, you specifically agree that you shall respect and comply
with by the DRAXIS's Disclosure Policy, as amended from time to time copy
thereof provided herewith as Schedule "C" to form an integral part of this
Agreement, the DRAXIS's Code of Ethics as amended from time to time., copy
thereof provided herewith as Schedule "D" to form an integral part of this
Agreement, and all and any relevant rules and legislation, such as, without
limiting the generality of the foregoing, the rules on Insider Trading in the
TSX COMPANY MANUAL, the ONTARIO SECURITIES ACT, the CANADIAN BUSINESS
CORPORATIONS ACT and QUEBEC SECURITIES ACT. You acknowledge that your senior
position with DRAXIS will deem you an insider of DRAXIS and therefore subject to
applicable mandated insider regulatory and company share trading policies and
restrictions.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL                                                   Page 4

12.    CONFIDENTIAL INFORMATION, NON-SOLICITATION AND NON-COMPETITION

       (a)    NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
       As DRAXIS's CFO, you acknowledge that you are creating, having access to,
and require knowledge of confidential and commercially valuable information of
the DRAXIS Group, the unauthorized use or disclosure of which could cause the
DRAXIS Group serious and irreparable damage.

       (1)    "Confidential Information" means all information, and all
documents and other tangible things recording any such information, relating to
or useful in connection with the business of the DRAXIS Group, whether or not a
trade secret within the meaning of the applicable law, which at the time or
times concerned is not generally known to Competitors (as defined below) and
which has been or is from time to time disclosed to or developed by you as a
result of your employment with DRAXIS. Confidential Information includes, but is
not limited to, the following information of the DRAXIS Group:

                 (i)   new products;
                (ii)   marketing strategies and plans;
               (iii)   development strategies and plans;
                (iv)   manufacturing processes and technologies;
                 (v)   research in progress and unpublished manuals or know how;
                (vi)   regulatory filings;
               (vii)   identity of and relationship with licensees, licensors or
                       suppliers;
              (viii)   finances, financial information, financial management
                       systems;
                (ix)   market research;
                 (x)   market experience with products;
                (xi)   customer lists;
               (xii)   compensation and benefits provided to employees;
              (xiii)   any other  research,  information  or  documents  which
                       you are told or  reasonably ought to know that the DRAXIS
                       Group regards as proprietary or confidential; and
              (xiv)    any legal advice provided to the DRAXIS Group, its
                       officers, directors, employees or agents during the
                       course or your employment and any details involving the
                       DRAXIS Group's position with respect to any litigation
                       matter or prospective litigation matter which exists at
                       the time of termination.

       (2)    You agree that you shall hold all Confidential Information in the
strictest confidence, as a fiduciary. Without limiting such obligation, you
shall use Confidential Information only at times and places designated by the
DRAXIS Group in furtherance of the business of the DRAXIS Group. You shall not,
except where the DRAXIS Group otherwise provides its prior written consent or
where required by law, directly or indirectly disclose to any Person any
Confidential Information, directly or indirectly sell, give, loan or otherwise
transfer any Confidential Information or copy thereof to any Person, publish,
lecture on or display any Confidential Information to any Person or use
Confidential Information for your own benefit or the benefit of any other
Person.

       (3)    Your obligations under this Section shall remain in effect with
respect to each item of Confidential Information until the date upon which such
Confidential Information has been publicly disclosed in a manner properly
authorized by the DRAXIS Group or otherwise has become known to Competitors
without any breach of this Section by you.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL                                                   Page 5

       (4)    For purposes of this Agreement, "Competitor" shall mean any Person
which engages or is preparing to engage, in whole or in part, in the design,
development, manufacture, marketing or sale of any products or services which
compete directly with a product or service which, during the 12 months prior to
the termination of this Agreement and your employment hereunder for any reason,
the DRAXIS Group marketed or at the time of termination of this Agreement and
your employment hereunder, is then preparing to market.

       (5)    For purpose of this Agreement, "Person" shall include individuals,
partnerships, associations, trusts, unincorporated organizations and
corporations.

       (b)    NON-SOLICITATION AND NON-COMPETITION
       (1)    You acknowledge that the pharmaceutical and over-the-counter drug
industries are highly competitive businesses. You are a key executive of DRAXIS,
and as a result of your senior position, you confirm that you have acquired
extensive background in and knowledge of the DRAXIS Group's business and the
pharmaceutical and over-the-counter drug industries in which the DRAXIS Group
operates. You further acknowledge that the DRAXIS Group develops and markets its
products on a North American basis, more particularly in Canada and in the
eastern part of the United States comprising the states of Connecticut, Florida,
Delaware, Georgia, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New
Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South
Carolina, Vermont, Virginia, and West Virginia [hereinafter referred to as the
"Territory"]. Accordingly, you agree that in the course of your employment with
DRAXIS, and thereafter for a period of one year (or if such period is held to be
excessive by a court of competent jurisdiction then for a period of six months)
you shall not, without the prior written authorization of the CEO of DRAXIS
whether as principal, as agent, or as an employee of, or in partnership, or
association with any other Person, in any manner whatsoever directly or
indirectly:

               (i)    become employed by or associated or affiliated with any
                      Competitor of the DRAXIS Group in the Territory in a
                      function dealing with a product or service, which during
                      the twelve-month period immediately prior to the
                      termination of this Agreement and your employment
                      hereunder, for any reason, competed directly with a
                      product or service of the DRAXIS Group;
               (ii)   seek to employ or encourage others to employ or otherwise
                      engage employees, agents or subcontractors of the DRAXIS
                      Group (who are employees, agents or subcontractors on the
                      date this Agreement terminated) or seek to in any way
                      disrupt their business relationship with the DRAXIS Group;
               (iii)  obtain by any means whatsoever the business of any Person
                      who at the time of the termination of this Agreement and
                      your employment hereunder, was a customer of the DRAXIS
                      Group, if to obtain such business may result in a
                      reduction of that Person's business with the DRAXIS Group;
               (iv)   approach any Person who at the time of the termination of
                      this Agreement and your employment hereunder was a
                      customer of the DRAXIS Group with the intention of
                      soliciting or enticing the business of that Person away
                      from the DRAXIS Group.

       (c)    REASONABLENESS
       You agree that the obligations set out in Sections 12(a) and (b) together
with your other obligations under this Agreement are reasonably necessary for
the protection of the DRAXIS Group's proprietary and business interests and you
expressly agree that:

                (i)   the scope of each of the covenants set out in Sections
                      12(a) and (b) above are

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL                                                   Page 6

                      in all respects, and in particular, in respect of
                      Territory, time and subject matter, necessary and
                      reasonable because the DRAXIS Group is marketing its
                      products on a North American basis;
               (ii)   given your general knowledge and experience, the
                      obligations contained in this Agreement will not preclude
                      you from becoming gainfully employed with other employers
                      who are not Competitors following termination of this
                      Agreement and your employment hereunder for any reason;
              (iii)   your agreement to Sections 12(a) and (b) is a key
                      incentive to DRAXIS formalizing the current terms and
                      conditions of your employment.

       (d)    BREACH OF AGREEMENT
       You also recognize that any breach of the terms and conditions of this
Agreement by you will result in material damage to the DRAXIS Group, although it
may be difficult for the DRAXIS Group to establish the monetary value of such
damage. You therefore agree that the DRAXIS Group shall be entitled to
injunctive relief, in addition to any other remedies available to it, in a court
of appropriate jurisdiction in the event of any breach or threatened breach by
you of any of the provisions of this Agreement.

13.    TERMINATION OF EMPLOYMENT

       (a)    TERMINATION BY DRAXIS FOR CAUSE
       DRAXIS may terminate this Agreement and your employment hereunder at any
time for cause without notice and without payment of any kind of compensation
either by way of anticipated earnings or damages of any kind.

       (b)    TERMINATION BY DRAXIS WITHOUT CAUSE BUT WITH NOTICE
       DRAXIS may terminate this Agreement and your employment hereunder by
providing to you one year's actual notice of termination. The amount of the
notice shall consist solely of Base Salary for the actual year. At its sole
discretion, DRAXIS may provide to you a shorter period of notice of termination,
in which case, the payments referred to in Section 13(c) shall be applicable,
but such payments as may be required by Sections 13(c) (1) and (4) shall be
reduced by the notice provided, so that the total notice and payments in lieu of
notice provided to you shall be equivalent to one year from the date you are
advised of the termination.

       (c)    TERMINATION BY DRAXIS WITHOUT CAUSE AND WITHOUT NOTICE
       DRAXIS may terminate this Agreement and your employment hereunder, in its
sole discretion, without notice and without cause, effective immediately upon
the date you are advised of the termination.

       Except as outlined in Section 13(b), if your employment is terminated
without cause pursuant to this Section, DRAXIS shall:

            1)        Pay to you a severance allowance equivalent to one year of
                      your then current Base Salary in a lump sum, within two
                      weeks following the date of such termination.
            2)        Pay to you all outstanding vacation pay and any earned but
                      unpaid salary up to the date of such termination within
                      two weeks of the date of termination.
            3)        Reimburse you for any business expenses incurred by you up
                      to and including the date of such termination following
                      provision by you of applicable receipts.
            4)        Ensure it has complied with all statutory obligations
                      imposed by the ACT RESPECTING LABOUR STANDARDS.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL                                                   Page 7

       The payment referred to in paragraph 1, above, shall be guaranteed and
shall not be subject to set off or deduction as a result of your obtaining
alternate employment following such termination or otherwise mitigating any
damages arising from such termination. Further, the payment referred to in
paragraph 1, above, is inclusive of all statutory payments, including statutory
termination and severance, which may be owed to you.

       The amounts paid to you pursuant to this paragraph shall be subject to
all required deductions.

       Upon termination of your employment in accordance with this Section
13(c), you shall return to DRAXIS all stock options, and other securities which
have not vested or accrued during your employment with DRAXIS.

       (d)    TERMINATION PAYMENT FOLLOWING A CHANGE OF CONTROL

       (1)    In accordance with section 13(d) (2) below, if there is a Change
of Control (as hereinafter defined) you shall be entitled to the following:

            A.        the amounts of any unpaid Base Salary earned up to and
                      including date of termination;
            B.        any unpaid vacation pay earned up to and including date of
                      termination;
            C.        a lump sum amount, equal to: (A) two times your then
                      current Base Salary in effect immediately prior to the
                      date of the Change of Control: and (B) two times the
                      amount paid to you, for the preceding calendar year
                      immediately prior to the date of the Change of Control, as
                      a discretionary bonus;
            D.        any additional statutory obligations imposed by the ACT
                      RESPECTING LABOUR STANDARDS;
            E.        the right to exercise all stock options and other
                      securities including those not then otherwise exercisable
                      as provided for below.

       The payments referred to in paragraph 13(d), above, shall be guaranteed
and shall not be subject to set off or deduction as a result of your obtaining
alternate employment following termination or otherwise mitigating any damages
arising from termination. Further, notwithstanding paragraph 13(d) (1) (D)
above, the payment referred to in paragraph 13(d) (1) (C) above, is inclusive of
all statutory payments, including statutory termination and severance, which may
be owed to you following termination.

       The amounts paid to you pursuant to this paragraph shall be subject to
all required deductions.

       For the purposes of this Agreement, a Change of Control shall be deemed
to occur in the following circumstances.

       In the event that at any date following the date of signature hereof:

            (i)    any change in the ownership as of the date hereof, direct or
            indirect, of the outstanding shares of the Corporation as a result
            of which an individual, partnership, association, trust,
            unincorporated organization, ("Person") or group of Persons, hold
            shares and/or other securities in excessive of the number which,
            directly or following conversion or exercise thereof, will entitle
            the holders thereof to cast 20% or more of the votes attaching to

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL                                                   Page 8

            all such shares and/or other securities of the Corporation which may
            be cast to elect the directors of the Corporation; or

            (ii)   the sale, transfer or any manner of disposition of 50% or
            more of the assets of the Corporation to an arm's length Person;

       and the Board of Directors of the Corporation (the "Board of Directors")
recommends acceptance of such offer to the Shareholders of the Corporation (the
"Shareholders") or, if the Board of Directors has made no recommendation, the
Shareholders have approved or accepted the proposed transaction, then any
option, including options not then otherwise exercisable held by the you, shall
become immediately exercisable upon the issuance of the recommendation of the
Board of Directors or the approval or acceptance of the Shareholders, as the
case may be.

       For greater clarity, no provision in this employment agreement shall be
deemed to supersede any provision of the Stock Option Plan of DRAXIS, as amended
from time to time, with respect to the right to exercise options held by the
employee in certain circumstances.

       (2)    Except for the ability to exercise all stock options upon a Change
of Control as provided in paragraph 13(d)(1)(E), the payments and entitlements
outlined in paragraph 13(d) (1) shall become due and payable if, and only if:

            A.        there has been a Change of Control; and
            B.        within 12 months following any Change of Control:
                      (i)   your employment is terminated without cause by
                            DRAXIS or by any successor employer to DRAXIS, as
                            the case may be; or
                      (ii)  by its conduct as described below, DRAXIS or any
                            successor employer to DRAXIS, as the case may be,
                            constructively terminates your employment by:
                               -  relocating without just cause the position
                                  and/or location of your principal office more
                                  than 20 kilometers from the location of your
                                  office on the date immediately prior to the
                                  Change of Control, without your consent; or
                               -  materially reducing without just cause your
                                  title, reporting relationship,
                                  responsibilities or authority without your
                                  consent; or
                               -  reducing without just cause the salary paid to
                                  you by the successor employer or terminating
                                  without just cause or materially reducing
                                  without just cause the value of your benefit
                                  programs, including, but not limited to, life
                                  insurance benefits, accidental death and
                                  dismemberment benefits, long term disability
                                  benefits, extended health coverage and dental
                                  benefits, which are referred to in Section 3
                                  above;
            C.        and, you elect in writing to receive the payments outlined
                      in Section 13(d)(1)

       (e)    TERMINATION BY DRAXIS WITHOUT CAUSE UPON DISABILITY
       If, as a result of incapacity due to physical or mental illness, you are
unable to render services of substantially the kind and nature, and
substantially to the extent required to be rendered in accordance with this
Agreement, and if such incapacity is expected to continue for a period of at
least twelve consecutive months from the date such incapacity commenced
("Absence Date") this Agreement may be deemed to be frustrated. Your employment
hereunder shall cease to be effective on the tenth day after

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL                                                   Page 9

written notice of cessation of employment ("Notice of Cessation") to you,
provided that prior to such cessation DRAXIS has been furnished with the written
certification of a qualified medical doctor designated by DRAXIS and you jointly
which states that you are and are expected to continue to be for at least twelve
consecutive months from the Absence Date, unable to render such services by
reason of such incapacity and the date upon which such incapacity commenced. If
DRAXIS and you are unable to agree on the designation of a qualified medical
doctor to make such determination, then each party shall designate a medical
doctor who, together, shall agree upon a third qualified medical doctor to make
such determination. The decision of the third medical doctor shall be binding on
DRAXIS and you. You consent to submit to such examination as may be required by
any such medical doctor or doctors.

       If your employment ceases pursuant to this Section, you shall be entitled
to receive a total amount equivalent to one year of your then current Base
Salary, commencing on the date upon which the Notice of Cessation is delivered
and payable in 24 regular payments equivalent to your regular semi-monthly Base
Salary on the regular DRAXIS pay days. If you are in receipt of disability
benefits payable pursuant to the benefit plans described above, then each
semi-monthly payment payable by DRAXIS shall be reduced by an amount equivalent
to the disability benefits payment received during that pay period.
Notwithstanding the cessation of your employment pursuant to this Section, you
shall be entitled to retain and exercise, within a period of 6 months following
the Notice of Cessation, all stock options which have vested or accrued during
your employment with DRAXIS.

       (f)    DEATH
       In the event that you should die during the term of this Agreement, your
employment shall automatically terminate. All salary, vacation pay and any bonus
payments earned to date of death but unpaid will be paid to your estate,
however, no other payment of any compensation either by way of anticipated
earnings or damages of any kind shall be paid and Section 13(h) shall be
applicable.

       (g)    RESIGNATION AND RETIREMENT
       You shall provide DRAXIS with three months notice, in writing, of your
resignation or your retirement from DRAXIS. Unless the Board of Directors of
DRAXIS otherwise determines, you shall return to DRAXIS all stock options
granted to you during your employment with DRAXIS which become exercisable after
the date you cease to be an employee of DRAXIS and/ or the DRAXIS Group.

       (h)    NO FURTHER NOTICE OR COMPENSATION
       Upon termination of your employment under this Agreement, you shall not
be entitled to any further grants of stock options nor shall you be entitled to
any further participation in any other incentive plan of the DRAXIS Group other
than as specifically set forth in this Agreement. For all purposes, "termination
of your employment" and "termination date" shall be the final day of employment
with DRAXIS, and shall not be deemed to include any period during which you may
be entitled to statutory notice, statutory termination pay or any contractual or
common law notice period and in particular, shall not be deemed to include the
notice period identified in Sections 13(c) (1) or 13(d) (1) (C).

14.    FAIR AND REASONABLE
       The parties confirm that the notice requirements and pay in lieu of
notice provisions set out above in Section 13 are fair and reasonable and that
no further notice or payments of any kind are owed or required. The parties
agree that upon any termination of this Agreement by DRAXIS or upon any
termination of this Agreement by you, that you shall have no action, cause of
action, claim or demand, either statutory or at common law, against the DRAXIS
Group or any other Person as a consequence of such termination.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL                                                  Page 10

15.    RETURN OF PROPERTY
       In the event your employment with DRAXIS is terminated for any reason,
including resignation or retirement, you will immediately return all DRAXIS
property in your possession or under your control.

16.    PROVISIONS OPERATING FOLLOWING TERMINATION
       Notwithstanding any termination of your employment with or without cause,
Sections 11, 12, 13, 14, 17 and any provision of this Agreement necessary to
give it efficacy shall continue in full force and effect following such
termination.

17.    ACKNOWLEDGEMENT
       You acknowledge that the DRAXIS Group shall not, for any purpose,
including in the event of a subsequent termination, be required to recognize or
take into account any prior service with your previous employers.

18.    SEVERABILITY
       If any provision of this Agreement is determined to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
attach only to such provision or part thereof and the remaining part of such
provision and all other provisions hereof shall continue in full force and
effect.

19.    NOTICE
       Any notice to be given in connection with this Agreement shall be given
in writing and may be given by personal delivery or by registered mail addressed
to the recipient as follows:

       To:    Mark Oleksiw
              4265 Pinewood
              Pierrefonds, Quebec
              H9H 2W1

       To:    DRAXIS HEALTH Inc.
              6870 Goreway Drive, 2nd Floor
              Mississauga, Ontario
              L4V 1P1
              Attention:  President and Chief Executive Officer

or such other address or individual as may be designated by notice by either
party to the other. Any notice given by personal delivery or by fax shall be
deemed to have been given on the day of actual delivery and, if made or given by
registered mail on the third day, other than a Saturday, Sunday or a statutory
holiday in Quebec and/or Ontario, following the deposit thereof in the mail.

20.    GOVERNING LAW
       This Agreement shall be governed by and construed in accordance with the
laws of the Province of Quebec and Canada applicable thereto.

21.    BENEFIT OF AGREEMENT
       This Agreement shall enure to the benefit of and be binding upon your
heirs, executors, administrators and legal personal representatives and the
successors and assigns of DRAXIS respectively.

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL                                                  Page 11

22.    ENTIRE AGREEMENT
       This Agreement and its Schedules constitute the entire agreement between
the parties with respect to your terms and conditions of employment and cancel
and supersede any prior understandings and agreements between the parties to
this Agreement, including, without limitation the Original Agreement. There are
no representations, warranties, forms, conditions, undertakings or collateral
agreements expressed, implied or statutory between the parties other than as
expressly set forth in this Agreement and its Schedules. You waive any right to
assert a claim in tort based on any pre-contractual representations, negligent,
or otherwise, made by the DRAXIS Group.

23.    LANGUAGE

The parties hereto have expressly required that this Agreement, its Schedules
and any notice or document relating thereto be drafted in the English language
only. Les parties aux presentes ont expressement exige que la presente
Convention, ses annexes ainsi que tout avis ou document s'y rattachant soient
rediges en langue anglaise seulement.

       To acknowledge that the terms of employment as expressed in this
Agreement are acceptable to you, please execute the enclosed copy of this letter
as indicated below and return it to me at your earliest opportunity.

                                 Yours truly,

                                 DRAXIS PHARMA INC.

                                 /s/ Martin Barkin

                          Per:
                                 Martin Barkin, M.D., F.R.C.S.C.
                                 President and Chief Executive Officer of Draxis
                                 Health Inc.


       I accept the above-noted terms of employment with Draxis Health Inc. as
Chief Financial Officer, I agree to comply with and be bound by the terms of
employment outlined in this Agreement.

       Dated at                 , the       day of                 , 2004.


                                 -----------------------------------
Witness                          Mark Oleksiw

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

                                   SCHEDULE A

                     STOCK OPTION PLAN OF DRAXIS HEALTH INC.

                       AS AMENDED AND SUBMITTED TO THE TSE
                                  JUNE 27, 2001

                                STOCK OPTION PLAN

                                       OF

                               DRAXIS HEALTH INC.

1.        PURPOSE OF THE PLAN

          The Draxis Health Inc. Stock Option Plan (the "Plan) is intended to
attract and retain highly qualified officers, directors and employees who will
be motivated towards the success of Draxis Health Inc. (the "Corporation") or
any of its subsidiaries.

2.        ADMINISTRATION

          This Plan shall be administered by the Board of Directors of the
Corporation (the "Board"). Subject to the terms of the Plan, the Board is
authorized to approve persons to whom options may be granted, to construe and
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, and to make all determinations and take all actions
necessary or advisable for the Plan's administration.

3.        GRANTING OF OPTIONS

          The Board may from time to time in the manner herein provided grant
options ("Options") to purchase common shares ("Shares") of the Corporation to
directors, officers, employees or area managers or arm's length consultants of
the Corporation and may provide for the number of Shares to be optioned to each
such director, officer, employee, area manager or arm's length consultant..
Options shall be exercised on or prior to a date determined by the Board of
Directors at the date of the grant, which shall be no later than ten years from
the date of the grant and shall be subject to the terms, conditions, limitations
and prohibitions as are herein contained or as may be in effect at the date of
the grant.

4.        SHARES SUBJECT TO PLAN

          The aggregate number of Shares that may be issued pursuant to the Plan
shall be 7,500,000 Shares. The number of Shares reserved for issuance to any one
person pursuant to options granted pursuant to this Plan or otherwise shall not
exceed 5% of the outstanding Shares.

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

5.        PARTICIPANTS

          The individuals who are eligible to receive Options hereunder shall be
directors, officers or employees of the Corporation or a subsidiary of the
Corporation or arm's length consultants of the Corporation or a subsidiary of
the Corporation (the "Eligible Optionees"). The Board shall from time to time,
in its sole discretion, determine which of those Eligible Optionees will be
granted Options under the Plan (the "Optionees") and the number of Shares to be
optioned to such Eligible Optionees. The Board shall not be precluded from
granting an Option to an Eligible Optionee solely because such Eligible Optionee
may previously have been granted an Option under the plan.

6.        OPTION PRICE

          The exercise price for an Option shall be fixed by the Board when such
Option is granted. Under no circumstances shall the exercise price for any
Option be less than the closing price of the Shares on The Toronto Stock
Exchange on the trading day immediately preceding the date of the grant.

7.        OPTION TERMS

          (a)    Subject to paragraph 3 hereof, the period during which any
                 Option may be exercised, in whole or in part, shall be such
                 period as the Board may determine (the "Option Period").

          (b)    In the event that any Option has not been exercised in respect
                 of all Shares covered by the Option at the expiry of the Option
                 Period, the Option shall thereupon expire.

          (c)    In the event of the death of an Optionee on or prior to the
                 expiry of an Option, while in office and at a time when such
                 Optionee has not fully exercised any outstanding Options, such
                 Options, to the extent then exercisable but unexercised, shall
                 be exercisable by such Optionee's executors or personal
                 representatives within six (6) months after such Optionee's
                 death notwithstanding the expiration date of the Option. In the
                 event such Options are not exercised at the expiry of such
                 six-month period, such Options shall expire.

          (d)    In the event of the total and permanent disability of an
                 Optionee (as determined by the Board of Directors), such
                 Optionee may, within six months after the date of such
                 determination of disability or such other longer period as the
                 Board of Directors may approve, notwithstanding the expiration
                 date of the Option, exercise such part of the Option as is then
                 exercisable. Unless the Board of Directors otherwise
                 determines, in the event the Optionee has not exercised such
                 Option at the expiry of such six-month period, the Option shall
                 expire.

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

          (e)    Except as provided in subparagraphs 7(c) and (d) above, if an
                 Optionee ceases to hold office as a director, officer, employee
                 or area manager of the Corporation during the Option Period,
                 such part of the Option as is then exercisable may be exercised
                 by such Optionee for a period of thirty (30) days after such
                 Optionee ceases to hold such office or position or for such
                 longer period as the Board of Directors may approve, after
                 which time the Option shall terminate; provided, however, that
                 in no event may any option be exercised outside the Option
                 Period.

8.        NON-ASSIGNABILITY

          Each Option shall be non-assignable and non-transferable and shall,
subject to the terms hereof, be exercisable only by the Optionee to whom it is
granted.

9.        RIGHTS OF OPTIONEES BEFORE EXERCISE OF OPTION

          The Optionees shall not have any rights whatsoever as shareholders in
respect of the Shares covered by such Options until such Options are exercised
and payment for such Shares has been made.

10.       EXERCISE OF OPTION

          Subject to the provisions of the Plan, an Option may be exercised from
time to time by delivery to the Corporation at its registered office of a
written notice of exercise in the form attached hereto as Schedule A specifying
the number of Shares with respect to which the Option is being exercised, and
accompanied by payment in full of the purchase price for the Shares then being
purchased and a duly executed Stock Option Agreement.

11.       SHARE CAPITAL ADJUSTMENTS

          If the outstanding Shares subject to this Plan are changed into or
exchanged for a different number or kind of shares or securities, as a result of
one or more amalgamations, reorganizations, re-capitalization, stock splits,
consolidations, stock dividends in the nature of stock splits or the like,
appropriate adjustments shall be made in the number and/or kind of shares or
securities for which the Options may thereafter be granted under this Plan and
for which Options then outstanding under this Plan may thereafter be exercised.
Any such adjustment in outstanding Options shall be made without changing the
aggregate exercise price applicable to the unexercised portions of such Option.

          No fractional securities shall be issued upon the exercise of an
Option. Accordingly, if as a result of any adjustment under this paragraph, an
Optionee would be entitled to a fractional security, the Optionee shall have the
right to acquire only the adjusted number of whole securities and no payment or
other adjustment will be made with respect to fractional securities so
disregarded.

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

12.       LIQUIDATION, DISSOLUTION OR WINDING-UP

          In the event that the Corporation proposes to liquidate, dissolve or
wind-up, the Corporation shall give written notice thereof to each Optionee and
such Optionee shall be entitled to exercise all then exercisable Options within
thirty (30) days of the giving of such notice, provided, however, that in no
event may such Option be exercised outside of the Option Period. Upon the
expiration of such thirty (30) day period, all rights of Optionees to such
Options or to exercise the same shall terminate and cease to have any further
force or effect, unless otherwise determined by the Board of Directors.

13.       CHANGE OF CONTROL

          Notwithstanding the foregoing, in the event that at any date following
the date hereof:

          (a)    any change in the ownership as of the date hereof, direct or
                 indirect, of the outstanding shares of the Corporation as a
                 result of which an individual, partnership, association, trust,
                 unincorporated organization, ("person") or group of Persons,
                 hold shares and/or other securities in excessive of the number
                 which, directly or following conversion or exercise thereof,
                 will entitle the holders thereof to cast 20% or more of the
                 votes attaching all such shares and/or other securities of the
                 Corporation which may be cast to elect the directors of the
                 Corporation; or

          (b)    the sale, transfer or any manner of disposition of 50% or more
                 of the assets of the Corporation to an arm's length Person;

and the Board of Directors recommends acceptance of such offer to the
Shareholders of the Corporation or, if the Board of Directors has made no
recommendation, the Shareholders have approved or accepted the proposed
transaction, then any Option outstanding hereunder, including Options not then
otherwise exercisable, shall become immediately exercisable upon the issuance of
the recommendation of the Board of Directors or the approval or acceptance of
the Shareholders, as the case may be.

14.       AMENDMENT OR TERMINATION

          The Board of Directors may terminate the Plan any time or, with the
consent of The Toronto Stock Exchange, amend the Plan at any time provided,
however, that except as permitted herein, the Board may not, without the
approval of the Optionee to whom Options have been granted, alter or impair such
Option.

          The Board may from time to time make, amend and repeal such
regulations under the Plan as they deem expedient for the purpose of carrying
out the Plan and such regulations from time to time in force shall, together
with the Plan, be binding and conclusive on the Corporation and on all holders
of Options granted under the Plan and their legal personal representatives.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

                                  SCHEDULE "A"

                                STOCK OPTION PLAN

                               DRAXIS HEALTH INC.

                              ELECTION TO PURCHASE

TO:       The Secretary of
          Draxis Health Inc.


          Pursuant to the terms of the stock option granted to me on
(the "Date of the Grant"), I hereby elect to purchase          common shares of
Draxis Health Inc. which were the subject of such stock option. I understand
that such purchase is subject to all the terms and conditions of such stock
option and of the Draxis Health Inc. Stock Option Plan.

          Enclosed is a certified cheque, bank draft or money order payable to
Draxis Health Inc. in the amount of $        , the full amount of the exercise
price for the number of common shares indicated above.


-------------------------------     ------------------------------------
DATE                                (PRINT NAME)


                                    ------------------------------------
                                    (SIGNATURE)

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL


                                   SCHEDULE B

                            DEFERRED SHARE UNIT PLAN

                               DRAXIS HEALTH INC.
                            DEFERRED SHARE UNIT PLAN
                                  FOR EMPLOYEES

1.        INTRODUCTION

1.1       PURPOSE

          The Draxis Health Inc. Deferred Share Unit Plan for senior management
employees has been established to provide such employees of Draxis Health Inc.
and its subsidiaries with the opportunity to acquire share equivalent units
convertible to cash or Common Shares of Draxis Health Inc. upon the termination
of employment of an employee. Acquiring such units will allow these employees to
participate in the long-term success of Draxis Health Inc. and will promote a
greater alignment of interests between such employees and the shareholders.

1.2       DEFINITIONS

          For purposes of the Plan:

          (a)    "Annual Remuneration" means the Base Salary and Bonus payable
                 to an Eligible Employee by the Company in or in respect of each
                 financial year;

          (b)    "Applicable Withholding Taxes" means any and all taxes and
                 other source deductions or other amounts which the Company is
                 required by law to withhold from any amounts to be paid or
                 credited hereunder;

          (c)    "Award Date" means each date on which Deferred Share Units are
                 credited to an Eligible Employee in accordance with Section
                 3.1, which shall be, unless otherwise determined by the
                 Committee, January 1st of each financial year in which the
                 Eligible Employee is eligible to participate in the Plan,
                 except 2000 the first year of the Plan in which case the Award
                 Date shall be February 1, 2000;

          (d)    "Award Market Value" means the average of the daily high and
                 low board lot trading prices of Common Shares on The Toronto or
                 Nasdaq Stock Exchanges on each of the five trading days prior
                 to the Award Date on which there was a trade of a board lot of
                 Common Shares. Should Common Shares no longer be publicly
                 traded at the relevant time such that the Award Market Value
                 cannot be determined in accordance with the formula set out
                 herein, such value shall be determined by the Committee in good
                 faith and shall depend upon the fair market value of the Common
                 Shares within the period that commences one year before the
                 Award Date and ends at the time of the Award Date;

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

          (e)    "Base Salary" means the regular base salary received by an
                 Eligible Employee from the Company during the relevant
                 financial year as determined by the Company from time to time
                 excluding vacation pay in lieu of time off, Bonuses, service
                 awards or any special compensation;

          (f)    "Bonus" means an amount in addition to Base Remuneration
                 calculated and awarded by the Board to an Eligible Employee
                 following completion of a financial year in respect of such
                 Employee's contribution to the operations of the Company for
                 such financial year, excluding for greater certainty, any
                 payments under the Stock Ownership Plan or, its predecessor,
                 the Stock Purchases and Bonus Plan;

          (g)    "Board" means the board of directors of the Company;

          (h)    "Committee" means the committee of the Board responsible for
                 recommending to the Board the eligibility of an employee to
                 participate in this Plan;

          (i)    "Common Shares" means the common shares of the Company;

          (j)    "Company" means Draxis Health Inc. or any of its subsidiaries
                 or affiliates as defined in paragraph 3 of the Canada Customs
                 and Revenue Agency Interpretation Bulletin IT-337R3 that may
                 adopt the Plan pursuant to its terms;

          (k)    "Deferred Share Unit" means a unit equivalent in value to a
                 Common Share, credited by means of a bookkeeping entry in the
                 books of the Company in accordance with an election made by an
                 Eligible Employee pursuant to Section 3;

          (l)    "Deferred Share Units outstanding under the Plan" or "Deferred
                 Share Units credited to an Employee's Account" at a particular
                 time for the purposes of Articles 4 and 5 shall be deemed to
                 mean and include at any particular time in any particular
                 financial year Deferred Share Units subsequently granted in
                 respect of a Bonus determined in respect of a completed
                 financial year and in respect of which an Eligible Employee has
                 made an election pursuant to Section 3.2;

          (m)    "Deferred Share Unit Amount" has the meaning given thereto in
                 Section 4.1;

          (n)    "Dividend Equivalents" means a bookkeeping entry whereby each
                 Deferred Share Unit is credited with the equivalent amount of
                 the dividend or other distribution paid on a Common Share in
                 accordance with Section 3.3;

          (o)    "Dividend Market Value" means the average of the daily high and
                 low board lot trading prices of Common Shares on The Toronto or
                 Nasdaq Stock Exchanges on each of the five trading days prior
                 to the Award Date on which there was a trade of a board lot of
                 Common Shares;

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

          (p)    "Election Form" means a document substantially in the form of
                 Schedule "A" to this Plan;

          (q)    "Eligible Employee" means a person who is, at the relevant
                 time, an employee of the Company or any of its subsidiaries and
                 is designated by the Committee as eligible to participate in
                 the Plan;

          (r)    "Plan" means this Draxis Health Inc. Deferred Share Unit Plan
                 for Employees, as amended from time to time;

          (s)    "Redemption Date" means the date upon which an Eligible
                 Employee ceases to be employed by the Company or any of its
                 subsidiaries or affiliates as defined in paragraph 3 of the
                 Canada Customs and Revenue Agency's Interpretation Bulletin IT
                 337R3; and

          (t)    "Redemption Value" means the average of the daily high and low
                 board lot trading prices of Common Shares on The Toronto or
                 Nasdaq Stock Exchanges on each of the five trading days prior
                 to the Redemption Date on which there was a trade of a board
                 lot of Common Shares. Should Common Shares no longer be
                 publicly traded at the relevant time such that the Redemption
                 Value cannot be determined in accordance with the formula set
                 out herein the provisions in this regard described in the
                 definition of Award Value shall apply mutatis mutandis.

1.3       EFFECTIVE DATE OF PLAN

          The effective date of the Plan shall be February 1, 2000 or such other
later date as the Board may determine.

2.        ADMINISTRATION

2.1       ADMINISTRATION OF THE PLAN

          The Plan shall be administered by the Board of Directors which shall,
without limitation, have full and final authority in its discretion, but subject
to the express provisions of the Plan, to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
The Board of Directors may delegate any or all of its authority with respect to
the administration of the Plan and any or all of the rights, powers and
discretions with respect to the Plan granted to it hereunder to the Committee or
such other committee of directors of the Company as the Board of Directors may
designate and upon such delegation the Committee or other committee of
directors, as the case may be, as well as the Board of Directors, shall be
entitled to exercise any or all of such authority, rights, powers and
discretions with respect to the Plan. The directors of the Company may fully
participate in voting and in other deliberations or proceedings of the Board of
Directors in respect of the Plan, notwithstanding: (i) the eligibility of any of
the directors to participate in the Plan; and (ii) that any of the directors may
hold Deferred Share Units granted pursuant to the Plan.

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

2.2       TAXES AND OTHER SOURCE DEDUCTIONS

          The Company shall be authorized to deduct from any amount to be paid
or credited hereunder any Applicable Withholding Taxes in such manner as the
Company determines.

3.        DEFERRED SHARE UNITS

3.1       AWARD OF DEFERRED SHARE UNITS

(a)       Each Eligible Employee shall be credited with Deferred Share Units in
respect of that part of an Eligible Employee's Base Salary which such Eligible
Employee has elected to receive in the form of Deferred Share Units as provided
in Section 3.2, in the manner set forth in this Plan. All Deferred Share Units
to be credited to an Eligible Employee will be credited to an account maintained
for the Eligible Employee on the books of the Company. The Deferred Share Units
to be credited to an Eligible Employee will be credited to such account on each
Award Date in respect of the portion of his or her base Salary to be credited in
Deferred Share Units to be earned in the financial year commencing on the Award
Date. The number of Deferred Share Units (including fractional Deferred Share
Units) to be credited on each Award Date shall be determined by dividing (a) the
amount of the applicable portion of the Base Salary to be credited in Deferred
Share Units on that Award Date by (b) the Award Market Value.

(b)       Each Eligible Employee shall be credited with Deferred Share Units in
respect of that part of an Eligible Employee's Bonus which such Eligible
Employee has elected to receive in the form of Deferred Share Units as provided
in Section 3.2, in the manner set forth in this Plan. All Deferred Share Units
to be credited to an Eligible Employee will be credited to an account maintained
for the Eligible Employee on the books of the Company. The Deferred Share Units
to be credited to an Eligible Employee will be credited to such account as of
the Award Date for a relevant financial year upon determination of the Bonus
earned following completion of such financial year. The number of Deferred Share
Units (including fractional Deferred Share Units) to be credited effective each
Award Date shall be determined by dividing (a) the amount of the applicable
portion of the Bonus to be credited in Deferred Share Units effective that Award
Date by (b) the Award Market Value determined in respect of that Award Date.

3.2       ELECTION

          Each Eligible Employee shall have the right to elect on December 1 of
each financial year (except 2000 the first year of the Plan in which case the
date shall be February 1, 2000) whether such Employee wishes to receive some of
such Employee's Annual Remuneration for the immediately succeeding financial
year (or for that part of the year remaining in the case of 2000) in the form of
Deferred Share Units. This election shall be made by completing, signing and
delivering to the Secretary of the Company the Election Form: (a) in the case of
an existing employee, by December of the financial year preceding the financial
year to which such election is to apply; or (b) in the case of 2000 by February
1, 2000. In each case, the election, when made, shall only apply prospectively
with respect to the Eligible Employee's Annual Remuneration yet to be earned.

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

3.3       CREDITS FOR DIVIDENDS

(a)       An Eligible Employee's account shall be credited with Dividend
Equivalents in the form of additional Deferred Share Units on each dividend
payment date in respect of which ordinary course cash dividends are paid on
Common Shares. Such Dividend Equivalents shall be computed by dividing: (a) the
amount obtained by multiplying the amount of the dividend declared and paid per
Common Share by the number of Deferred Share Units recorded in the Eligible
Employee's account on the record date for the payment of such dividend, by (b)
the Dividend Market Value, with fractions computed to three decimal places.

(b)       All Dividend Equivalents credited hereunder at any particular time in
a year to an Eligible Employee in the form of Deferred Share Units shall be
adjusted as of the particular dividend payment date to reflect the determination
at the end of a year of additional Deferred Share Units in respect of a Bonus
concerning which an Eligible Employee has made an election pursuant to the
provisions of 3.1 and 3.2.

3.4       REPORTING OF DEFERRED SHARE UNITS

          Statements of the Deferred Share Unit accounts will be provided to the
Eligible Employees at least annually.

4.        REDEMPTION OF DEFERRED SHARE UNITS

4.1       REDEMPTION OF DEFERRED SHARE UNITS

(a)       An Eligible Employee shall be entitled on the Redemption Date to
redeem the Deferred Share Units credited to the Eligible Employee's account for
an amount (the "Deferred Share Unit Amount") equal to the product that results
from multiplying (i) the number of Deferred Share Units recorded in the Eligible
Employee's account on the Redemption Date by (ii) the Redemption Value of the
Common Shares. Upon payment in full by the Company to the Eligible Employee of
the value of the Deferred Share Unit Amount, the Deferred Share Units shall be
cancelled.

(b)       The Deferred Share Unit Amount payable to an Eligible Employee, less
any Applicable Withholding Taxes, may be used to acquire Common Shares on the
open market through an independent broker designated by the Company (the
"Designated Broker") or may be paid in cash less Applicable Withholding Taxes to
the Eligible Employee, at the discretion of the Company. The Company will also
make a cash payment, less any Applicable Withholding Taxes, to the Eligible
Employee with respect to the value of fractional Deferred Share Units standing
to the Eligible Employee's credit.

(c)       If the Company has determined, that payment of the Deferred Share Unit
Amount be made in the form of Common Shares purchased on the open market through
a Designated Broker, as described in Section 4.1 (b) above, the Company will
calculate the number of whole Common Shares to be purchased by the Designated
Broker on the open market on behalf and for

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

the benefit of the Eligible Employee. The number of Common Shares will be
determined by dividing (i) the Deferred Share Unit Amount payable, less any
Applicable Withholdings Taxes, by (ii) the Redemption Value of a Common Share as
determined on the Redemption Date or, if the Redemption Date is not a trading
date for shares on the Toronto and Nasdaq Stock Exchanges, on the next such
trading date and the Company shall advise the Designated Broker of the specified
number of whole Common Shares to be purchased on behalf of the Eligible
Employee. The Designated Broker will purchase the specified number of whole
Common Shares as soon practicable after being notified by the Company. On or
before the date of settlement with respect to the purchase of the Common Shares
by the Designated Broker, the Company, acting as agent for the Eligible
Employee, will pay the purchase price of the specified number of Common Shares
to the Designated Broker, together with any reasonable brokerage fees or
commissions related thereto. The Company will also make a cash payment, less any
Applicable Withholdings Taxes, to the Eligible Employee with respect to the
value of fractional Deferred Share Units still standing to the Eligible
Employee's credit after the maximum number of whole Common Shares has been
purchased as described above.

(d)       Deferred Share Unit Amounts paid by the Company in accordance with (a)
through (c) above will be paid to or on behalf of the Eligible Employee no later
than the end of the first calendar year after the Redemption Date.

4.2       DEATH OF ELIGIBLE EMPLOYEE PRIOR TO REDEMPTION

          Upon the death of an Eligible Employee prior to the redemption of the
Deferred Share Units credited to the account of such Eligible Employee under the
Plan, a dependant relation or legal representative, shall be entitled to redeem
the Deferred Share Units in accordance with Section 4.1. For greater certainty,
the Deferred Share Unit Amount payable shall be equivalent to the amount which
would have been paid to the Eligible Employee pursuant to and subject to Section
4.1, calculated as if the Eligible Employee had previously ceased to be an
employee of the Company on the day prior to his or her death.

4.3       In the event a Redemption Date occurs prior to the end of a financial
year, the number of Deferred Share Units awarded to an Eligible Employee in
respect of his Annual Remuneration for that particular year shall, for the
purposes of calculating the Redemption Value, be reduced proportionately to
reflect that the Eligible Employee was employed by the Company for less than
that particular full financial year.

5.        GENERAL

5.1       ADJUSTMENTS TO DEFERRED SHARE UNITS

          In the event of the declaration of any stock dividend, a subdivision,
consolidation, reclassification, exchange, or other change with respect to the
Common Shares, or a merger, consolidation, spin-off, or other distribution
(other than ordinary course cash dividends) of the Company's assets to its
shareholders, the account of each Eligible Employee and the Deferred Share Units
outstanding under the Plan shall be adjusted to appropriately reflect the event.
However, no amount will be paid to, or in respect of, an Eligible Employee under
the Plan or

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

pursuant to any other arrangement, and no Deferred Share Units will be granted
to such Eligible Employee to compensate for a downward fluctuation in the price
of Common Shares, nor will any other form of benefit be conferred upon, or in
respect of, an Eligible Employee for such purpose.

5.2       DESIGNATION OF BENEFICIARY

          An Eligible Employee may, by written notice to the Secretary of the
Company, designate a person to receive the benefits payable under the Plan on
the Eligible Employee's death, and may also by written notice to the Secretary
of the Company alter or revoke such designation from time to time, subject
always to the provisions of any applicable law. Such written notice shall be in
such form and shall be executed in such manner as the Committee in its
discretion may from time to time determine.

5.3       AMENDMENT, SUSPENSION, OR TERMINATION OF PLAN

(a)       The Board may from time to time amend or suspend the Plan in whole or
in part and may at any time terminate the Plan. However, any such amendment,
suspension, or termination shall not adversely affect the right of any Eligible
Employee with respect to Deferred Share Units credited to such Eligible Employee
at the time of such amendment, suspension or termination, without the consent of
the affected Eligible Employee.

(b)       If the Board terminates the Plan, no new Deferred Share Units will be
credited to the account of an Eligible Employee, but previously credited
Deferred Share Units and Deferred Share Units to be credited to the end of a
financial year with respect to any Bonus pursuant to Section 3.1 shall remain
outstanding and shall be entitled to Dividend Equivalents as provided under
section 3.3, and be paid in accordance with the terms and conditions of the Plan
existing at the time of termination. The Plan will finally cease to operate for
all purposes when the last remaining Eligible Employee receives payment, in cash
or Common Shares, in satisfaction of all Deferred Share Units recorded in the
Eligible Employee's account.

5.4       COMPLIANCE WITH LAWS

          The administration of the Plan shall be subject to and performed in
conformity with all applicable laws and any applicable regulations of a duly
constituted authority. Should the Committee, in its sole discretion, determine
that it is not feasible or desirable to honour an election in favour of Deferred
Share Units due to such laws or regulations, its obligation shall be satisfied
by means of an equivalent cash payment (equivalence being determined on a
before-tax basis).

5.5       REORGANIZATION OF THE COMPANY

          The existence of any Deferred Share Units shall not affect in any way
the right or power of the Company or its shareholders to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, or any amalgamation, combination, merger or
consolidation involving the Company or to create or issue

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

any bonds, debentures, shares or other securities of the Company or the rights
and conditions attaching thereto or to effect the dissolution or liquidation of
the Company or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar nature
or otherwise.

5.6       GENERAL RESTRICTIONS AND ASSIGNMENT

(a)       Except as required by law, the rights of an Eligible Employee under
the Plan are not capable of being anticipated, assigned, transferred, alienated,
sold, encumbered, pledged, mortgaged or charged and are not capable of being
subject to attachment or legal process for the payment of any debts or
obligations of the Eligible Employee.

(b)       Rights and  obligations  under the Plan may be assigned by the Company
to a successor in the business of the Company.

5.7       NO RIGHT TO SERVICE

          Neither participation in the Plan nor any action taken under the Plan
shall give or be deemed to give any Eligible Employee a right to continued
employment with the Company or any of its subsidiaries and shall not interfere
with any right of the Company to terminate the employment of any Eligible
Employee at any time.

5.8       NO SHAREHOLDER RIGHTS

          Under no circumstances shall Deferred Share Units be considered Common
Shares or shares of any other class of the Company, nor entitle any Eligible
Employee to exercise voting rights or any other rights attaching to the
ownership of Common Shares, nor shall any Eligible Employee be considered the
owner of the Common Shares by virtue of the award of Deferred Share Units.

5.9       GOVERNING LAW

          The Plan shall be governed by, and interpreted in accordance with, the
laws of the Province of Ontario and the laws of Canada applicable therein.

5.10      INTERPRETATION

          In this text words importing the singular meaning shall include the
plural and VICE VERSA, and words importing the masculine shall include the
feminine and neuter genders.

5.11      SEVERABILITY

          The invalidity or unenforceability of any provision of this Plan shall
not affect the validity or enforceability of any other provision and any invalid
or unenforceable provision shall be severed from this Plan.

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

                                  SCHEDULE "A"

                   DRAXIS HEALTH INC. DEFERRED SHARE UNIT PLAN
                           FOR DIRECTORS (THE "PLAN")

                              ANNUAL ELECTION FORM

1.        ANNUAL REMUNERATION

(a)       I elect to receive my Base Remuneration as follows (please check
either Box "A" or Box "B"):

              A.    _________% in Deferred Share Units (not to exceed 20%)

                    and

              B.    _________% in cash.

(b)       I elect to receive my Bonus, if any, as follows: (Please check either
Box "C" or Box "D"

              C.    __________% in Deferred Share Units (not to exceed 100%)

              D.    __________% in cash.

                 i. DESIGNATION OF BENEFICIARY

In accordance with the terms of the Plan, I appoint as designated beneficiary,
          or if previously done, I hereby revoke any designation of beneficiary
          heretofore made by me under the Plan, and hereby appoint as designated
          beneficiary to receive any payment in accordance with the Plan that
          may fall due after my death:
          ______________________________________ [INSERT FULL NAME]; provided,
          however, that if the above named beneficiary predeceases me such
          payment shall be made to my estate.

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

3.        I UNDERSTAND THAT:

     -    All capitalized terms shall have the meanings attributed to them under
          the Plan.
     -    All payments will be net of any Applicable Withholding Taxes.

                                      )  ----------------------------------
          Witness Signature           )  Eligible Employee's  Signature
                                      )
                                      )  ----------------------------------)
          Witness Name (please print) )  Eligible Employee's Name (please print)
                                      )
                                      )  ----------------------------------
                                      )  Date

UNTIL THIS ELECTION FORM IS RETURNED TO THE SECRETARY OF THE COMPANY, 100% OF
THE ANNUAL REMUNERATION WILL BE RECEIVED IN THE FORM OF CASH.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

                                   SCHEDULE C

                         DRAXIS HEALTH DISCLOSURE POLICY

OBJECTIVE AND SCOPE

DRAXIS is committed to providing timely, factual, accurate and balanced
disclosure of material information about the Company, consistent with legal and
regulatory requirements. The Company will disseminate good news and bad on a
timely basis, except where confidentiality issues require a delay. It is
imperative that the general public has timely access to this information.

This policy confirms in writing our existing disclosure policies and practices.
Its goal is to raise awareness of the Company's approach to disclosure among the
Board of Directors, senior management and employees.

This policy extends to all employees of the Company and its subsidiaries, its
Board of Directors and those authorized to speak on its behalf. It covers
disclosures in documents filed with the securities commissions and written
statements made in the Company's annual and quarterly reports, news releases,
letters to shareholders, speeches by senior management and information contained
on the Company's website and other electronic communications. It also extends to
oral statements and in particular in meetings and telephone conversations with
analysts and investors, interviews with the media as well as press conferences
and conference calls.

DISCLOSURE POLICY COMMITTEE

The chief executive officer, upon consultation with the Board of Directors'
Corporate Governance Committee, has established a Disclosure Policy Committee
consisting of the Chief Executive Officer (CEO), Chief Financial Officer (CFO),
the Executive Director Investor Relations (IRO), and the General Counsel and
Secretary

The Disclosure Policy Committee will determine when developments require public
disclosure and will meet as conditions dictate. It is essential that the
Disclosure Policy Committee be fully apprised of all material Company
developments in order to evaluate and discuss those events to determine the
appropriateness and timing for public release of information or whether the
information should remain confidential, and if so, how that inside information
will be controlled and for what time period. The Disclosure Policy Committee
will be chaired by a designated member of the committee.

The Disclosure Policy Committee will review and update, if necessary, this
policy on an annual basis.

DESIGNATED SPOKESPERSONS

The Company designates a limited number of spokespersons responsible for
communication with the media, investors and analysts. The CEO, the CFO and the
IRO shall be the official spokespersons for the Company. Individuals holding
these offices may, from time to time, designate others within the Company to
speak on behalf of the Company as back-ups or to respond to specific inquiries
from the investment community or the media.

Employees who are not authorized spokespersons must not respond under any
circumstances to inquiries from the investment community or the media unless
specifically asked to do so by an authorized spokesperson.

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

Except for discussions with business partners by senior management, employees
should refrain from discussing confidential and potentially material affairs of
the Company with third parties, unless expressly authorized to do so.

RESPONSIBILITY FOR ELECTRONIC COMMUNICATIONS

This policy also applies to electronic communications. Accordingly, officers and
personnel responsible for written public disclosures shall also be responsible
for electronic communications. The IRO is responsible for updating and
maintaining the investor relations section of the Company's website and is
responsible, along with the General Counsel, for monitoring all Company
information placed on the website to ensure that it is accurate, timely,
complete and up to date. Any material changes in information must be updated
immediately. Although the Company views electronic communications as an
extension of its formal disclosure record, it recognizes that disclosure on its
website does not constitute adequate disclosure of information that is
considered material non-public information. Any disclosures of material
information on its website will be coordinated with full disclosure, which
generally includes appropriate dissemination of a news release.

Policies and practices relating to the construction and use of the Company
website shall be reviewed periodically by the Disclosure Policy Committee, using
in part the guidelines set out in Appendix A, Guidelines for the Company website
and the recommendation of any reports from external website audits/reviews.

The IRO shall also be responsible for responses to electronic inquiries. Only
[previously disclosed] public information or information which could otherwise
be disclosed in accordance with this policy shall be utilized in responding to
electronic inquiries.

Employees are prohibited from participating in Internet chat room or newsgroup
discussions on matters pertaining to the Company's activities or its securities.
Employees who encounter a discussion pertaining to the Company should advise the
IRO immediately, so the discussion may be monitored.

MATERIAL INFORMATION

Material information is any information relating to the business and affairs of
the Company that results in, or would reasonably be expected to result in, a
significant change in the market price or value of the Company's securities. To
qualify as material information, the United States Securities and Exchange
Commission (SEC) states that there must be a substantial likelihood that a fact
would be viewed by a reasonable investor as significantly altering the total mix
of information available about the Company. Material information consists of
both material facts and material changes relating to the business and affairs of
the Company. Examples of developments that may give rise to material information
include, but are not limited to, the following:

-      Development of new products and developments affecting the Company's
       resources, technology, products or market
-      Entering into or loss of significant contracts
-      A significant acquisition, disposition or merger involving the Company
-      A new issue of securities or a significant change in the Company's
       capital structure
-      Significant changes in management
-      Significant litigation o A significant change in the Company's lending
       arrangements
-      A significant change in previously disclosed near-term expected earnings

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

-      Any other developments relating to the business and affairs of the
       Company that would reasonably be expected to significantly affect the
       market price or value of any of the Company's securities or that would
       reasonably be expected to have a significant influence on a reasonable
       investor's investment decisions.

PRINCIPLES OF DISCLOSURE OF MATERIAL INFORMATION

In complying with the requirement to disclose forthwith all material information
under applicable laws and stock exchange rules, the Company will adhere to the
following basic disclosure rules:

1.     Material information will be publicly disclosed immediately, unless the
       Disclosure Policy Committee determines that such disclosure would be
       unduly detrimental to the Company (in which case the information will be
       kept confidential for a limited period of time until the Committee
       determines it is appropriate to publicly disclose).

2.     Disclosure must include any information the omission of which would make
       the rest of the disclosure misleading (half truths are misleading).

3.     Unfavourable material information must be disclosed as promptly and
       completely as favourable information.

4.     No selective disclosure. Previously undisclosed material information must
       not be disclosed to selected individuals (for example, in an interview
       with an analyst or in a telephone conversation with a major shareholder).
       If previously undisclosed material information has been inadvertently
       disclosed to an analyst or any other person, such information must be
       disclosed promptly via news release in compliance with the SEC's
       Regulation FD and applicable Canadian regulatory and legal requirements.

5.     Disclosure of material information must be updated if earlier disclosure
       has become misleading as a result of intervening events.

CONFIDENTIAL INFORMATION

The withholding of confidential material information on the basis that
disclosure would be unduly detrimental to the Company's interest must be
infrequent and can only be justified where the potential harm to the Company or
to shareholders caused by immediate disclosure may reasonably be considered to
significantly outweigh the undesirable consequences of delaying disclosure.
Stock exchanges, specifically NASDAQ and the TSE, discourage delaying disclosure
for a lengthy period of time, since it is unlikely that confidentiality can be
maintained beyond the short term.

Examples of instances where disclosure might be unduly detrimental to the
Company include:

1.     Release of the information would prejudice the ability of the Company to
       pursue specific and limited near-term objectives or to complete a
       transaction or series of transactions that are underway.

2.     Disclosure of the information would provide competitors with confidential
       corporate information that would be of significant benefit to them. A
       decision to release a new product for example, or the details of the
       features of a new product, may be withheld for competitive reasons.

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Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

3.     Disclosure of information concerning the status of ongoing negotiations
       would prejudice the successful completion of those negotiations.

NEWS RELEASES

Once the Disclosure Policy Committee determines that a development is material,
it will authorize the prompt issuance of a news release, unless the Disclosure
Policy Committee determines that such developments must remain confidential for
the time being and appropriate control of that inside information is instituted.
Should a material statement inadvertently be made in a selective forum, the
Company will promptly issue a news release in order to fully and publicly
disclose that information in accordance with SEC's Regulation FD and applicable
Canadian regulatory and legal requirements.

News releases will be disseminated through an approved news wire service that
provides national and simultaneous service. News releases will be transmitted to
all stock exchange members, relevant regulatory bodies, major national financial
media and the local media in areas where the Company has its headquarters and
operations.

If a stock exchange upon which shares of the Company are listed is open for
trading at the time of a proposed announcement, prior notice of a news release
announcing material information must be provided to the market surveillance
department of the exchange. If a news release announcing material information is
issued outside of trading hours, market surveillance must be notified before the
market opens.

RUMOURS

So long as it is clear that the Company is not the source of the market rumour,
the Company does not comment, affirmatively or negatively, on rumours. This also
applies to rumours on the Internet. The Company's spokespersons will respond
consistently to those rumours, saying, "It is our policy not to comment on
market rumours or speculation." Should the stock exchange request that the
Company make a definitive statement in response to a market rumour that is
causing significant volatility in the stock, the Disclosure Policy Committee
will consider the matter and decide whether to make a policy exception.

FORWARD LOOKING INFORMATION

The Company will not release earnings projections other than in a prospectus
grade offering document as required by appropriate securities regulators or
confirm analysts' earnings estimates and will not attempt to influence an
analyst's conclusions. The Company may continue to publicly disseminate
non-material, forward-looking information to enable the investment community to
better evaluate the Company and its prospects. To the extent that forward
looking information is provided in a disclosure document, the document is to be
accompanied by meaningful cautionary language that warns investors that there is
a risk that the statement could change materially. In the case of oral or
electronically presented forward-looking statements, the statement will be
identified as such and the spokesperson will refer to a readily available
written document (news release, annual report) for the cautionary language.

CONTACTS WITH ANALYSTS AND INVESTORS

The Company recognizes that analysts are important conduits for disseminating
corporate information to the investing public and that analysts play a key role
in interpreting and clarifying existing public data and in providing investors
with background information and details that cannot practically be put in public
documents. The Company will meet with analysts and investors on an individual or
small group basis as needed and will initiate contacts or respond to analyst and
investor calls in a timely, consistent and

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

accurate fashion in accordance with this disclosure policy. The Company will not
engage in selective disclosure of material non-public information to analysts,
however it will provide to individual investors or reporters who request it, the
same sort of detailed, non-material information that has been provided to
analysts. It is highly desirable that where practicable more than one Company
representative be present at all individual and group meetings with investors
and media representatives.

The Company recognizes that analyst disclosure does not constitute adequate
disclosure of information that is considered material non-public information. If
material information is to be announced at an analyst or shareholder meeting or
a press conference, its announcement must be coordinated with a general public
announcement via news release.

QUIET PERIODS

In order to avoid the potential for selective disclosure or even the perception
or appearance of selective disclosure, the Company will observe a quarterly
quiet period, during which no meetings or telephone contacts with analysts and
investors will be initiated and no earnings guidance will be provided. The quiet
period comprises the three weeks immediately preceding the issuance of a news
release disclosing quarterly results.

REVIEWING ANALYST DRAFT REPORTS AND MODELS

It is the Company's policy, when analysts inquire with respect to their earnings
and/or cash flow estimates to provide no guidance or confirmation. The Company
will not confirm, or attempt to influence, an analyst's opinions or conclusions.
If requested, the Company will review the draft research report or model for the
purpose of identifying factual errors.

Analyst reports are proprietary products of the analysts' firms. Re-circulating
a report by an analyst may be viewed as an endorsement by the Company of the
report. For these reasons, the Company will not provide analyst reports through
any means to persons outside of the Company or to employees of the Company,
including posting such information on its website. The Company may post on its
website a complete list, regardless of the recommendation, of all the investment
firms and analysts who provide research coverage on the Company. If provided,
such lists will not include links to the analysts' or any other third parties'
websites or publications.

CONFERENCE CALLS

A conference call may be held with members of the investment community to
discuss quarterly or annual financial and operating results or major material
corporate developments The Company will announce the date and time of the
conference call in advance on its website and/or in a news release and the
conference call may be broadcast simultaneously via webcast over the Internet.
The media and individual investors may call a toll-free number (or access the
webcast over the Internet and listen to the call on a real-time basis). A tape
recording of the conference call will be made available for a period of at least
one month following the call on either a toll-free number or an archived audio
webcast on the Internet, for anyone interested in listening to a replay.

A debriefing will be held after the conference call and if such debriefing
uncovers selective disclosure of previously undisclosed material information,
the Company will promptly disclose such information, generally via news release.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

DISCLOSURE RECORD

The Company will maintain a file containing all public information about the
Company, including continuous disclosure documents, news releases, analysts'
reports, transcripts or tape recordings of conference calls and newspaper
articles.

The minimum retention period for material corporate information posted on the
website shall be one year. Specifically, news releases shall be kept for a
period of two years, quarterly and annual reports for five years.

TRADING RESTRICTIONS AND BLACKOUT PERIODS

It is illegal for anyone to purchase or sell securities of any public company
with knowledge of material information affecting that company that has not been
publicly disclosed. Except in the necessary course of business, it is also
illegal for anyone to inform any other person of material non-public
information.

Insiders and employees with knowledge of confidential or material information
about the Company are prohibited from trading until the information has been
fully disclosed and a reasonable period of time has passed for the information
to be widely disseminated.

Blackout periods may be prescribed from time to time as a result of special
circumstances relating to the Company pursuant to which insiders of the Company
would be precluded from trading in securities of the Company. Quarterly blackout
periods will also apply for all employees during periods when financial
statements are being prepared but results have not yet been publicly disclosed.
The blackout period extends from five days prior to the release of the Company's
quarterly or annual financial results until two full business days following
such release.

MAINTAINING CONFIDENTIALITY

Any employee privy to confidential information is prohibited from communicating
such information to anyone else, unless it is necessary to do so in the course
of business. Efforts will be made to limit access to such confidential
information to only those who need to know the information and such persons will
be advised that the information is to be kept confidential.

Communication by e-mail leaves a physical track of its passage that may be
subject to later decryption attempts. All confidential information being
transmitted over the Internet must be secured by the strongest encryption and
validation methods practically available. Where possible, employees should avoid
using e-mail to transmit confidential information.

Outside parties privy to undisclosed material information concerning the Company
will be told that they must not divulge such information to anyone else, other
than in the necessary course of business and that they may not trade in the
Company's securities until the information is generally disclosed. The obtaining
of a signed confidentiality agreement is desirable in these situations.

In order to prevent the misuse or inadvertent disclosure of material
information, the procedures set forth below should be observed at all times:

1.     Confidential matters should not be discussed in places where the
       discussion may be overheard, such as elevators, hallways, restaurants,
       airplanes or taxis.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

2.     Confidential documents should not be read in public places and should not
       be discarded where others can retrieve them. Similarly, employees should
       not leave confidential information at their homes or other locations
       outside of their work location.

3.     Transmission of documents by electronic means, such as by fax or directly
       from one computer to another, should be made only where it is reasonable
       to believe that the transmission can be made and received under secure
       conditions.

4.     Unnecessary copying of confidential documents should be avoided and
       documents containing confidential information should be promptly removed
       from conference rooms and work areas after meetings have concluded. Extra
       copies of confidential documents should be shredded or otherwise
       destroyed.

5.     Access to confidential electronic data should be restricted through the
       use of passwords.

6.     Documents and files containing confidential information should be kept in
       a safe place to which access is restricted to individuals who "need to
       know" that information in the necessary course of business.

7.     All proprietary information, including computer programs and other
       records, remain the property of the Company and may not be removed,
       disclosed, copied or otherwise used except in the normal course of
       employment or with the prior permission.

INSIDER TRADING

Insider trading is strictly regulated by Part XXI of the TSE Company Manual,
applicable provincial securities legislation such as Section 76 and 134 of the
Ontario Securities Act and the Regulations under the Act and Part XI of the
Canadian Business Corporations Act.

An "insider" is defined in the Ontario Securities Act as every director or
senior officer of a reporting issuer (ie. the Company), every director or senior
officer of a company that is itself an insider or subsidiary of a reporting
issuer (ie. Draximage and DPI) and any person or company who beneficially owns,
directly or indirectly, voting securities of a reporting issuer or who exercises
control or direction over voting securities of a reporting issuer or a
combination of both carrying more than 10% of the voting rights attached to all
voting securities of that reporting issuer. Similar definitions apply in other
provincial legislation.

Section 76 of the Ontario Securities Act prohibits any person or company in a
"special relationship" with a listed company from trading on the basis of
undisclosed material information on the affairs of that company. Those
considered to be in a "special relationship" with a listed company include those
that are insiders, affiliates or associates of the listed company, a person or
company proposing to make a take over bid of the listed company and a person or
company proposing to become a party to a reorganization, amalgamation, merger or
similar business relationship with the listed company. A person or company in a
"special relationship" also includes those involved, or which were involved, in
the provision of business or professional services for the listed company,
including employees.

The contravention of applicable insider trading regulations and laws is a
serious civil offence and may lead to civil and/or criminal sanction.

Employees are encouraged to discuss any questions or concerns they might have
about insider trading activities with the General Counsel and Secretary of the
Company.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

The Company designates all its officers, directors, and certain employees as
insiders or designated insiders for the purpose of compliance with applicable
securities laws. Such individuals have strict controls on their ability to trade
shares of the Company and have stringent insider reporting obligations to
various Canadian securities commissions. Such obligations may even continue for
a reasonable period of time after an individual ceases to be an officer,
director or employee because of his/her continued possession of insider
information. There may also be times when other individuals employed by the
Company or its affiliates will be deemed insiders for a period of time (i.e.
because of close involvement in a transaction, in-licensing or access to
confidential information not yet publicly disseminated). Those individuals will
be advised of their status at that time by the General Counsel and Secretary of
the Company.

COMMUNICATION AND ENFORCEMENT

All current and new directors, officers, authorized spokespersons and employees
will be advised of this policy and educated about its importance. This policy
will be brought to the attention of all employees and directors on an annual
basis.
An employee who violates this policy may face disciplinary action up to and
including termination of his or her employment with the Company. The violation
of this policy may also violate certain securities laws. If the Company
discovers that an employee has violated such securities laws, it may refer the
matter to the appropriate regulatory authorities, which could lead to penalties,
fines or imprisonment.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

APPENDIX A - GUIDELINES FOR THE COMPANY WEBSITE

Points to be considered in the evaluation and review of the Company website may
include, but are not limited to the following:

1.     Investor relations material will be contained within a separate section
       of the website and shall include a notice that advises the reader that
       the information posted was accurate at the time of posting, but may be
       superseded by subsequent disclosures. The investor relations portion of
       the Company website should be sufficiently different in graphic style
       and/or colours and/or page labelling to ensure users are aware they are
       in the investor relations section.

2.     All factual or material information and data posted to the website,
       including text and audio-visual material, should show the date such
       material was issued and/or posted to the website.

3.     News releases will be posted on the Company's website immediately or as
       soon as possible after notification by the wire service provider of
       release over the news wire.

4.     The Company may post on the investor relations section of its website a
       complete list, regardless of the recommendation, of all the investment
       firms and analysts who provide formal research coverage on the Company.
       The Company may request the approval of analysts to be included on such a
       list. This list, if provided on the website, will not include links to
       the analysts' or any other third party websites or publications.

5.     Links from the Company website to a third party website will include a
       notice that advises the reader that he or she is leaving the Company's
       website and that the Company is not responsible for the contents of the
       other site. The Company will be sensitive to any concerns about the
       endorsement of information on third party websites (over which it has no
       control).

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

                                   SCHEDULE D

                        DRAXIS HEALTH INC. CODE OF ETHICS

                               DRAXIS HEALTH INC.

                                 CODE OF ETHICS

It is the policy of Draxis Health Inc. (the "Company") to conduct its business
affairs honestly, ethically and in full accordance with the law. Conduct that
may raise questions as to the Company's, or any of its employee's, director's or
representative's honesty, integrity, impartiality, or reputation, or activities
that could cause embarrassment to the Company or damage its reputation are
prohibited. Any activity, conduct, or transaction that may appear to be
unethical, illegal, or improper business conduct must be avoided. Under this
policy, "Company Representative" shall mean any employee, director, officer or
consultant engaged by the Company. All Company Representatives are subject to
this policy.

CONFLICT OF INTEREST

It is the policy of the Company that transactions with other business entities,
universities or other organizations and individuals shall not be influenced or
affected by the personal interests or activities of any Company Representative.
Activities or personal interests of the Company Representatives or their
immediate family members which create the appearance of a conflict of interest
should generally be avoided so as not to reflect negatively on the reputation of
the Company or its Representatives. For practical business reasons, primarily
cost efficiencies, and due to inter-corporate holdings, certain Company
Representatives are directors, officers or employees of affiliates of the
Company. All transactions between the Company and its affiliates shall be
completed on a fair market basis by reference to terms and conditions available
from arm's length third parties. Any actual or apparent conflicts of interest
between the Company and its affiliates shall be resolved on the basis that the
Company's Representatives must act in the best interests of the Company (the
"Affiliates Policy"). In addition, certain Representatives, with the Company's
knowledge and consent, carry-on a professional practice. Such Representatives
may provide professional services to competing businesses or entities conducting
business with the Company, provided that, such professional services do not
involve the Representative in an actual conflict of interest with the Company
(the "Professional Policy"). Such Representatives shall notify the President in
writing immediately of any actual conflict.

Subject to the Affiliates Policy and the Professional Policy, activities or
personal interests of Company Representatives, including those of their
immediately family members, which could appear to influence the objective
decisions required in the performance of their Company responsibilities are
considered to be a conflict of interest and are prohibited unless approved in
writing by the Company's audit committee. Such conflicts may create a
presumption of favouritism or damage the reputation of the Company or its
Representatives in the eyes of others with whom the Company may transact
business, including shareholders and the investment community.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

Subject to the Affiliates Policy and the Professional Policy, the following
activities or interests would be considered conflicts of interest under this
policy except with the Company's prior knowledge and consent:

1.     Ownership in any competing business or in any outside concern which does
       significant business with the Company.

2.     Provision of services as a director, manager or consultant, employee or
       independent contractor to any outside concern which does significant
       business with the Company or in a competing business.

3.     Acceptance of any compensation, gifts or favours of more than nominal
       value (less than $100), loans, excessive entertainment or other similar
       activities from any outside concern which does or seeks to do business
       with the Company or is its competitor.

4.     Representation of the Company in any transaction in which the employee or
       a related person has a substantial personal interest.

5.     Use of Company assets to promote personal interests.

6.     Direct or indirect competition with the Company in the purchase, sale, or
       development of property, property rights, or products.

7.     Authorization, payment, (or acceptance) of bribes in favour of
       influencing any decision or action or inaction by any party.

Subject to the Affiliates Policy and the Professional Policy, the following
rules of conduct are to be applied while serving as a Representative of the
Company to avoid any conflict or appearance of conflicts of interest.

1.   GIFTS: Money, or its equivalent, may not be accepted from a vendor.
     Personal gifts of any kind must never be suggested or encouraged. Nominal
     and unsolicited gifts of minimal value (less than $100) may be accepted at
     the recipient's discretion.

2.   MEALS & REFRESHMENTS: At the vendor's invitation, a Representative may
     accept meals or refreshments at a vendor's expense. Excessive, elaborate or
     frequently repeated arrangements are not acceptable.

3.   ENTERTAINMENT: Occasional attendance at a theater or sporting event, or for
     similar entertainment at vendor's expense may be accepted.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

4.   LOANS: Personal loans may never be accepted from a vendor, or obtained or
     guaranteed for any purpose by a vendor. This does not apply to loans
     obtained independently and in the ordinary course of business from a bank
     or other public lending institution, including those which do business with
     the Company.

5.   TRAVEL & LODGING: Travel and lodging for an employee may not be accepted
     from, or reimbursed by, a vendor unless such travel and lodging is for
     educational or consultative purposes and is approved in advance by the
     President. All other business travel as a Representative of the Company
     will be at the Company's expense and according to the Company's business
     travel policies. Under no circumstance may a Company Representative accept
     travel or lodging from a vendor for a family member or friend.

6.   GAMBLING: Participation with a vendor in gambling or a contest which may
     result in personal gain or more than a nominal value is prohibited.

7.   CONTESTS, PRIZES, AWARDS & COMMISSIONS: Company Representatives may not
     participate in or receive personal benefit from a vendor-sponsored contest
     or promotional effort unless it has been approved by the President. No
     employee responsible for buying a vendor's product may participate in or
     personally benefit from a vendor-sponsored contest or economically valuable
     award, excluding frequent flyer programs. No employee may receive monetary
     or other incentive rewards or commissions for sales performance or
     otherwise, except from the Company, without prior approval by the
     President.

8.   PERSONAL SERVICES TO VENDORS: No Representative of the Company may render
     any personal or professional services to a vendor or competitor for
     compensation or other personal benefit, whether or not outside business
     hours. "Vendors" include any entity with which the Company has contractual
     relationships.

9.   COMPANY ASSETS: No Representative of the Company may use Company assets,
     facilities or positions to promote personal interests.

These rules must be interpreted broadly and not technically. "Vendor" includes
any representative of a vendor. "Goods" also includes services. Any employment
or similar involvement with a vendor of a Company Representative's immediate
family should be promptly disclosed to the Company. Ownership interest in a
vendor company should be avoided, and must be disclosed. Misinterpretation of
these rules does not excuse a violation.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

COMPLIANCE WITH LAWS

All Company Representatives are expected to act in full accordance with all
domestic and foreign laws and regulations applicable to the business of the
Company. Violation of laws or regulations or compromise of the Company's ethical
expectations could result in written reprimands or other disciplinary action,
including termination and criminal or civil legal proceedings where applicable.

The Company is involved, from time to time, in matters which are sensitive in
nature and important to the Company, its Representatives and its shareholders.
Securities laws impose certain obligations on the Company regarding the
disclosure of information to the investing public. To comply with these laws and
the regulations promulgated thereunder, the Company has established the
following policies and procedures which are applicable to all Company
Representatives:

1.   CONFIDENTIALITY: The Company's ability to effectively discharge its
     disclosure obligations under the securities laws can be adversely affected
     by the premature or otherwise unauthorized disclosure of internal
     information relating to the Company. All Company Representatives,
     therefore, must make every effort to maintain the confidentiality of the
     Company's internal information. These efforts include securely handling and
     storing all sensitive documents. Company Representatives should not
     communicate internal information to friends, family or other third party,
     except as may be required in the ordinary course of business.

2.   DESIGNATED SPOKESPERSON: The Company has designated the President and Chief
     Executive Officer and the Vice President and Chief Financial Officer of the
     Company as spokespersons for the Company in respect of general and
     financial matters respectively. No other Representatives of the Company are
     authorized to speak on behalf of the Company unless authorized by the
     President of the Company. All third party inquiries should be referred to
     the Company's President.

3.   TRADING OF SECURITIES: Securities laws prohibit any person from trading in
     the Company's securities while in possession of significant information
     concerning the Company which has not already been disclosed to the
     investing public, or from disclosing such information to another person who
     is likely to trade in the Company's securities. In addition, no
     Representative shall trade in the Company's securities during the period
     commencing five (5) trading days prior to and ending one (1) trading day
     following the release of the Company's quarterly or annual financial
     results. Similarly, no Representative shall trade in securities of any of
     the Company's associates or affiliates (as defined in the SECURITIES ACT
     (ONTARIO)) which are public companies during the period commencing five (5)
     trading days prior to and ending one (1) trading day following the release
     of the quarterly or annual results of such public companies.

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

4.   RESPONDING TO RUMORS: Rumors concerning the business and affairs of the
     Company may circulate from time to time. The Company and its
     Representatives will generally not comment or respond to rumors. All
     requests for comments or responses must be referred to the President of the
     Company.

CONFIDENTIALITY & PROPRIETARY INFORMATION

Except in specific performance of Company business or under specific
authorization by the Company, Company Representatives are prohibited from
disclosing or using confidential or proprietary information, both technical and
non-technical, which belongs to the Company and which the Company considers to
be its trade secrets. Such information may be, or may have been, made available
to, or developed by, Company Representatives during their association with the
Company.

Except in specific performance of Company business or under specific
authorization by the owner, Company Representatives are prohibited from
disclosing or using confidential, material or proprietary information or trade
secrets belonging to others. In addition, all Representatives will be required
to execute a Confidentiality Agreement with the Company as a condition of
employment or engagement.

DISCLOSURE & REVIEW

Subject to the Affiliates Policy and the Professional Policy, all Company
Representatives are required to disclose information concerning an actual or
potential conflict of interest to the President or audit committee. The audit
committee will review details of the conflict or violation and render a
determination or exception to the policy matter in question.

Any Company Representative whose activities or personal interests are determined
to be a conflict or interest or a violation of the Company's ethical
expectations must eliminate such conflict in a manner approved by the audit
committee. Failure to take appropriate action to eliminate the conflict or
violation shall be cause for written reprimand or other disciplinary action
including termination and criminal or civil legal proceedings where applicable.

I have read, understand and agree to comply with the letter and intent of this
policy.


-------------------------------     ------------------------------------
Witness                                       [NAME OF EMPLOYEE]


                                    ------------------------------------
                                              Date

<Page>

Mr. Mark Oleksiw                                                   March 9, 2004
PERSONAL & CONFIDENTIAL

TABLE OF CONTENTS

<Table>
<S>                                                                           <C>
1.    EMPLOYMENT...............................................................1

2.    BASE SALARY..............................................................1

3.    BENEFITS.................................................................2

4.    STOCK OPTION PLAN........................................................2

5.    DEFERRED SHARE UNIT PLAN.................................................2

6.    DISCRETIONARY BONUS......................................................2

7.    MEMBERSHIPS AND PUBLICATIONS.............................................3

8.    VACATION.................................................................3

9.    EXPENSES.................................................................3

10.     DEDUCTIONS.............................................................3

11.     EMPLOYEE'S COVENANTS...................................................3

12.     CONFIDENTIAL INFORMATION, NON-SOLICITATION AND NON-COMPETITION.........4

             (a)   NON-DISCLOSURE OF CONFIDENTIAL INFORMATION..................4
             (b)   NON-SOLICITATION AND NON-COMPETITION........................5
             (c)   REASONABLENESS..............................................5
             (d)   BREACH OF AGREEMENT.........................................6

13.     TERMINATION OF EMPLOYMENT..............................................6

        (a)  TERMINATION BY DRAXIS FOR CAUSE...................................6
        (b)  TERMINATION BY DRAXIS WITHOUT CAUSE BUT WITH NOTICE...............6
        (c)  TERMINATION BY DRAXIS WITHOUT CAUSE AND WITHOUT NOTICE............6
        (d)  TERMINATION PAYMENT FOLLOWING A CHANGE OF CONTROL.................7
        (e)  TERMINATION BY DRAXIS WITHOUT CAUSE UPON DISABILITY...............8
        (f)  DEATH.............................................................9
        (g)  RESIGNATION AND RETIREMENT........................................9
        (h)  NO FURTHER NOTICE OR COMPENSATION.................................9

14.     FAIR AND REASONABLE....................................................9

15.     RETURN OF PROPERTY....................................................10

16.     PROVISIONS OPERATING FOLLOWING TERMINATION............................10

17.     ACKNOWLEDGEMENT.......................................................10

18.     SEVERABILITY..........................................................10

19.     NOTICE................................................................10
</Table>

<Page>

<Table>
<S>                                                                           <C>
20.     GOVERNING LAW.........................................................10

21.     BENEFIT OF AGREEMENT..................................................10

22.     ENTIRE AGREEMENT......................................................11

23.     LANGUAGE..............................................................11
</Table>