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                                                                    EXHIBIT 4.26

                                                               DR. MARTIN BARKIN
                                                               President and CEO
                                                            Mississauga Location
                                    Tel: (905) 677-0898 #236 Fax: (905) 677-5494
                                                        Cellular: (416) 726-8870
                                                              mbarkin@draxis.com

March 26, 2004


PERSONAL & CONFIDENTIAL

Mr. Jack A. Carter
31 Briarglen Court
Scarborough, ON M1W 3Z8

RE: EMPLOYMENT AGREEMENT

Dear Jack:

By this letter we hereby confirm that your employment agreement with Draxis
Health Inc. dated October 18, 2000 (the "Employment Agreement") is amended as
follows:

   -  By deleting the second paragraph of Section 14 and replacing it with the
      following :

      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.

   -  By deleting Section 16(d) and replacing it with the following Section
      16(d):

      (d)   TERMINATION PAYMENT FOLLOWING A CHANGE OF CONTROL

      (1)   In accordance with section 16(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.

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                                                                  MARCH 26, 2004
                             PERSONAL & CONFIDENTIAL                 JACK CARTER
                                                                          PAGE 2

     The payments referred to in paragraph 16(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 16(d) (1) (D)
above, the payment referred to in paragraph 16(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 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 16(d)(1)(E), the payments and entitlements
outlined in paragraph 16(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

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                                                                  MARCH 26, 2004
                             PERSONAL & CONFIDENTIAL                 JACK CARTER
                                                                          PAGE 3

                         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
         16(d)(1)

   -  By deleting Section 16(h) and replacing it with the following section
      16(h):

      (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 16(c) (1) or 16(d) (1) (C).

All of the other terms and conditions of your Employment Agreement remain
unchanged. We would ask that you confirm your acceptance of this modification by
signing the duplicate of this letter.

If you have any questions concerning this modification, please do not hesitate
to communicate with the undersigned.

Regards,

DRAXIS HEALTH INC.

/s/ Martin Barkin

Per:  Dr. Martin Barkin
      President and CEO

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I hereby confirm having read the above mentioned modification to my employment
agreement dated October 8, 2000 and hereby confirm my acceptance of said
modification.

Signed this ______ day of ___________, 2004 at ________________________________.


   /s/ Jack A. Carter
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JACK A. CARTER