##### Table of Contents









UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549


FORM 10-K


|  |  |                                                                                             
|- |  | --------------------------------------------------------------------------------------------
|þ |  | Annual Report pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934    
| 
|  |  | For the Fiscal Year Ended March 31, 2006                                                    
| 
|o |  | Transition Report pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934
| 
|  |  | For the transition period
    from           to                                             

Commission File
No. 1-9114


MYLAN LABORATORIES INC.




|                         |  |                                  
|------------------------ |  | ---------------------------------
|Pennsylvania             |  | 25-1211621                       
|(State of Incorporation) |  | (IRS Employer Identification No.)

1500 Corporate Drive, Canonsburg, Pennsylvania 15317


(724) 514-1800




Securities registered pursuant to Section 12(b) of the
Act:


|                                        |  |                                           
|--------------------------------------- |  | ------------------------------------------
|Title of Each Class:                    |  | Name of Each Exchange on Which Registered:
|Common Stock, par value $0.50 per share |  | New York Stock Exchange                   

Securities registered pursuant to Section 12(g) of the
Act: None


þ o


o þ


þ o


S-K 10-K 10-K. o


12b-2


þ o o


12b-2 o þ






DOCUMENTS INCORPORATED BY REFERENCE


10-14












---



##### 










MYLAN LABORATORIES INC.


INDEX TO
FORM 10-K


For the Fiscal Year Ended March 31, 2006


|                                                                                                                             |  |  |    |      |  | 
|---------------------------------------------------------------------------------------------------------------------------- |  |  | -- | ---- |  | 
|                                                                                                                             |  |  |    | Page | 
|                                                                                                                             |  |  |    |      | 
|PART I                                                                                                                      
|ITEM 1. Business                                                                                                             |  |  | 3  |     
|Overview of
    Our Business                                                                                                 |  |  | 3  |     
|Product
    Development                                                                                                      |  |  | 5  |     
|Patents,
    Trademarks and Licenses                                                                                         |  |  | 7  |     
|Customers and
    Marketing                                                                                                  |  |  | 7  |     
|Competition                                                                                                                  |  |  | 8  |     
|Product
    Liability                                                                                                        |  |  | 8  |     
|Raw
    Materials                                                                                                            |  |  | 8  |     
|Government
    Regulation                                                                                                    |  |  | 9  |     
|Seasonality                                                                                                                  |  |  | 10 |     
|Environment                                                                                                                  |  |  | 10 |     
|Employees                                                                                                                    |  |  | 10 |     
|Backlog                                                                                                                      |  |  | 10 |     
|Securities
    Exchange Act Reports                                                                                          |  |  | 10 |     
|ITEM 1A. Risk Factors                                                                                                        |  |  | 10 |     
|ITEM 1B. Unresolved Staff Comments                                                                                           |  |  | 22 |     
|ITEM 2. Properties                                                                                                           |  |  | 22 |     
|ITEM 3. Legal Proceedings                                                                                                    |  |  | 23 |     
|ITEM 4. Submission of Matters to a
    Vote of Security Holders                                                              |  |  | 24 |     
|PART II                                                                                                                     
|ITEM 5. Market for Registrants
    Common Equity, Related Stockholder Matters and Issuer Purchases
    of Equity Securities |  |  | 25 |     
|ITEM 6. Selected Financial Data                                                                                              |  |  | 26 |     
|ITEM 7. Managements Discussion
    and Analysis of Results of Operations and Financial Condition                            |  |  | 27 |     
|ITEM 7A. Quantitative and Qualitative
    Disclosures about Market Risk                                                      |  |  | 37 |     
|ITEM 8. Financial Statements and
    Supplementary Data                                                                      |  |  | 39 |     
|ITEM 9. Changes in and Disagreements
    with Accountants on Accounting and Financial Disclosure                             |  |  | 66 |     
|ITEM 9A. Controls and Procedures                                                                                             |  |  | 66 |     
|ITEM 9B. Other Information                                                                                                   |  |  | 67 |     
|PART III                                                                                                                    
|ITEM 10. Directors and Executive
    Officers of the Registrant                                                              |  |  | 67 |     
|ITEM 11. Executive Compensation                                                                                              |  |  | 67 |     
|ITEM 12. Security Ownership of Certain
    Beneficial Owners and Management and Related Stockholder
    Matters              |  |  | 67 |     
|ITEM 13. Certain Relationships and
    Related Transactions                                                                  |  |  | 67 |     
|ITEM 14. Principal Accounting Fees and
    Services                                                                          |  |  | 67 |     
|PART IV                                                                                                                     
|ITEM 15. Exhibits and Financial
    Statement Schedules                                                                      |  |  | 67 |     
|Signatures                                                                                                                   |  |  | 72 |     
|EX-10.4.D                                                                                                                   
|EX-10.4.E                                                                                                                   
|EX-10.5                                                                                                                     
|EX-10.6.B                                                                                                                   
|EX-10.7.B                                                                                                                   
|EX-10.8.B                                                                                                                   
|EX-10.9.B                                                                                                                   
|EX-10.10.B                                                                                                                  
|EX-10.11.B                                                                                                                  
|EX.10.12.B                                                                                                                  
|EX-10.13.B                                                                                                                  
|EX-10.14.B                                                                                                                  
|EX-10.15.B                                                                                                                  
|EX-10.19.C                                                                                                                  
|EX-10.20.C                                                                                                                  
|EX-10.21.C                                                                                                                  
|EX-10.22.C                                                                                                                  
|EX-10.23                                                                                                                    
|EX-10.24.B                                                                                                                  
|EX-21                                                                                                                       
|EX-23                                                                                                                       
|EX-31.1                                                                                                                     
|EX-31.2                                                                                                                     
|EX-32                                                                                                                       



2



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PART I







|        |         
|------- | --------
|ITEM 1. | Business






Overview of Our Business




Approved Drug Products with Therapeutic Equivalence
Evaluations,






3



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Disclosures about Segments of an Enterprise and Related
Information,






®






4



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®


first-to





Product Development






| |   |                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | development of controlled-release technologies and the
    application of these technologies to reference products;                                                                                               
|
| |  | development of NDA and ANDA transdermal and polymer film
    products;                                                                                                                                            
|
| |  | development of drugs technically difficult to formulate or
    manufacture because of either unusual factors that affect their
    stability or bioequivalence or unusually stringent regulatory
    requirements;
|
| |  | development of drugs that target smaller, specialized or
    underserved markets;                                                                                                                                 
|
| |  | development of generic drugs that represent
    first-to-file
    opportunities;                                                                                                                                  
|
| |  | expansion of our existing solid oral dosage product portfolio,
    including with respect to additional dosage strengths;                                                                                         
|
| |  | completion of additional preclinical and clinical studies for
    approved NDA products required by the FDA, known as
    post-approval (Phase IV) commitments; and                                               
|
| |  | conducting of life cycle management studies intended to further
    define the profile of products subject to pending or approved
    NDAs.                                                                       



New Drug Application (NDA).


5



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Abbreviated New Drug Application (ANDA).




Generic Product Development










difficult-to


Brand Product Development






| |   |                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------
| |  | laboratory and preclinical tests;                                                                                                    
|
| |  | submission of an Investigational New Drug (IND)
    application, which must become effective before clinical studies
    may begin;

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| |   |                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | adequate and well-controlled human clinical studies to establish
    the safety and efficacy of the proposed product for its intended
    use;                                                                                                                                        
|
| |  | submission of an NDA containing the results of the preclinical
    tests and clinical studies establishing the safety and efficacy
    of the proposed product for its intended use, as well as
    extensive data addressing matters such as manufacturing and
    quality assurance;
|
| |  | scale-up to commercial
    manufacturing; and                                                                                                                                                                                                                                         
|
| |  | FDA approval of an NDA.                                                                                                                                                                                                                                                               

30-day






| |   |                                                                                                                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Phase I: The drug is initially introduced into a relatively
    small number of healthy human subjects or patients and is tested
    for safety, dosage tolerance, mechanism of action, absorption,
    metabolism, distribution and excretion.                                                                                                               
|
| |  | Phase II: Studies are performed with a limited patient
    population to identify possible adverse effects and safety
    risks, to assess the efficacy of the product for specific
    targeted diseases or conditions, and to determine dosage
    tolerance and optimal dosage.                                                                            
|
| |  | Phase III: When Phase II evaluations demonstrate that
    a dosage range of the product is effective and has an acceptable
    safety profile, Phase III trials are undertaken to evaluate
    further dosage and clinical efficacy and to test further for
    safety in an expanded patient population at geographically
    dispersed clinical study sites.






Patents, Trademarks and Licenses







Customers and Marketing




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Competition











Product Liability









Raw Materials




8



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Government Regulation
















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Seasonality







Environment







Employees









Backlog


12-month





Securities Exchange Act Reports


10-K, 10-Q 8-K. 10-K





ITEM 1A. Risk Factors




10



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OUR FUTURE REVENUE GROWTH AND PROFITABILITY ARE DEPENDENT
UPON OUR ABILITY TO DEVELOP AND/ OR LICENSE, OR OTHERWISE
ACQUIRE, AND INTRODUCE NEW PRODUCTS ON A TIMELY BASIS IN
RELATION TO OUR COMPETITORS PRODUCT INTRODUCTIONS. OUR
FAILURE TO DO SO SUCCESSFULLY COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR FINANCIAL POSITION AND RESULTS OF OPERATIONS AND
COULD CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO DECLINE.










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OUR APPROVED PRODUCTS MAY NOT ACHIEVE EXPECTED LEVELS OF
MARKET ACCEPTANCE, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON
OUR PROFITABILITY, FINANCIAL POSITION AND RESULTS OF OPERATIONS
AND COULD CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO
DECLINE.






| |   |                                                                            
| | - | ---------------------------------------------------------------------------
| |  | the availability of alternative products from our competitors;             
|
| |  | the price of our products relative to that of our competitors;             
|
| |  | the timing of our market entry;                                            
|
| |  | the ability to market our products effectively to the retail
    level; and
|
| |  | the acceptance of our products by government and private
    formularies.  



A RELATIVELY SMALL GROUP OF PRODUCTS MAY REPRESENT A
SIGNIFICANT PORTION OF OUR NET REVENUES, GROSS PROFIT OR NET
EARNINGS FROM TIME TO TIME. IF THE VOLUME OR PRICING OF ANY OF
THESE PRODUCTS DECLINES, IT COULD HAVE A MATERIAL ADVERSE EFFECT
ON OUR BUSINESS, FINANCIAL POSITION AND RESULTS OF OPERATIONS
AND COULD CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO DECLINE.




WE FACE VIGOROUS COMPETITION FROM OTHER PHARMACEUTICAL
MANUFACTURERS THAT THREATENS THE COMMERCIAL ACCEPTANCE AND
PRICING OF OUR PRODUCTS, WHICH COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND RESULTS OF
OPERATIONS AND COULD CAUSE THE MARKET VALUE OF OUR COMMON STOCK
TO DECLINE.






| |   |                                                                  
| | - | -----------------------------------------------------------------
| |  | proprietary processes or delivery systems;                       
|
| |  | larger research and development and marketing staffs;            
|
| |  | larger production capabilities in a particular therapeutic area; 
|
| |  | more experience in preclinical testing and human clinical trials;

12



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| |   |                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------
| |  | more products; or                                                                                                    
|
| |  | more experience in developing new drugs and financial resources,
    particularly with regard to brand manufacturers.



BECAUSE THE PHARMACEUTICAL INDUSTRY IS HEAVILY REGULATED, WE
FACE SIGNIFICANT COSTS AND UNCERTAINTIES ASSOCIATED WITH OUR
EFFORTS TO COMPLY WITH APPLICABLE REGULATIONS. SHOULD WE FAIL TO
COMPLY WE COULD EXPERIENCE MATERIAL ADVERSE EFFECTS ON OUR
BUSINESS, FINANCIAL POSITION AND RESULTS OF OPERATIONS, AND THE
MARKET VALUE OF OUR COMMON STOCK COULD DECLINE.








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OUR REPORTING AND PAYMENT OBLIGATIONS UNDER THE MEDICAID
REBATE PROGRAM AND OTHER GOVERNMENTAL PURCHASING AND REBATE
PROGRAMS ARE COMPLEX AND MAY INVOLVE SUBJECTIVE DECISIONS. ANY
DETERMINATION OF FAILURE TO COMPLY WITH THOSE OBLIGATIONS COULD
SUBJECT US TO PENALTIES AND SANCTIONS WHICH COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND
RESULTS OF OPERATIONS, AND THE MARKET VALUE OF OUR COMMON STOCK
COULD DECLINE.


10-K,


10-K,




WE EXPEND A SIGNIFICANT AMOUNT OF RESOURCES ON RESEARCH AND
DEVELOPMENT EFFORTS THAT MAY NOT LEAD TO SUCCESSFUL PRODUCT
INTRODUCTIONS. FAILURE TO SUCCESSFULLY INTRODUCE PRODUCTS INTO
THE MARKET COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS,
FINANCIAL POSITION AND RESULTS OF OPERATIONS, AND THE MARKET
VALUE OF OUR COMMON STOCK COULD DECLINE.


difficult-to


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A SIGNIFICANT PORTION OF OUR NET REVENUES ARE DERIVED FROM
SALES TO A LIMITED NUMBER OF CUSTOMERS. ANY SIGNIFICANT
REDUCTION OF BUSINESS WITH ANY OF THESE CUSTOMERS COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND
RESULTS OF OPERATIONS, AND THE MARKET VALUE OF OUR COMMON STOCK
COULD DECLINE.




THE USE OF LEGAL, REGULATORY AND LEGISLATIVE STRATEGIES BY
COMPETITORS, BOTH BRAND AND GENERIC, INCLUDING AUTHORIZED
GENERICS AND CITIZENS PETITIONS, AS WELL AS THE
POTENTIAL IMPACT OF PROPOSED LEGISLATION, MAY INCREASE OUR COSTS
ASSOCIATED WITH THE INTRODUCTION OR MARKETING OF OUR GENERIC
PRODUCTS, COULD DELAY OR PREVENT SUCH INTRODUCTION AND/ OR
SIGNIFICANTLY REDUCE OUR PROFIT POTENTIAL. THESE FACTORS COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL
POSITION AND RESULTS OF OPERATIONS AND COULD CAUSE THE MARKET
VALUE OF OUR COMMON STOCK TO DECLINE.






| |   |                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | entering into agreements whereby other generic companies will
    begin to market an authorized generic, a generic
    equivalent of a branded product, at the same time generic
    competition initially enters the market;                   
|
| |  | filing citizens petitions with the FDA, including timing
    the filings so as to thwart generic competition by causing
    delays of our product approvals;                                                                                     
|
| |  | seeking to establish regulatory and legal obstacles that would
    make it more difficult to demonstrate bioequivalence;                                                                                                                          
|
| |  | initiating legislative efforts in various states to limit the
    substitution of generic versions of brand pharmaceuticals;                                                                                                                      
|
| |  | filing suits for patent infringement that automatically delay
    FDA approval of many generic products;                                                                                                                                          
|
| |  | introducing next-generation products prior to the
    expiration of market exclusivity for the reference product,
    which often materially reduces the demand for the first generic
    product for which we seek FDA approval;               
|
| |  | obtaining extensions of market exclusivity by conducting
    clinical trials of brand drugs in pediatric populations or by
    other potential methods as discussed below;                                                                        
|
| |  | persuading the FDA to withdraw the approval of brand name drugs
    for which the patents are about to expire, thus allowing the
    brand name company to obtain new patented products serving as
    substitutes for the products withdrawn; and
|
| |  | seeking to obtain new patents on drugs for which patent
    protection is about to expire.                                                                                                                                                        



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THE INDENTURE FOR OUR SENIOR NOTES AND OUR SENIOR
SECURED CREDIT FACILITY IMPOSE SIGNIFICANT OPERATING AND
FINANCIAL RESTRICTIONS, WHICH MAY PREVENT US FROM CAPITALIZING
ON BUSINESS OPPORTUNITIES AND TAKING SOME ACTIONS. THESE FACTORS
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL
POSITION AND RESULTS OF OPERATIONS AND COULD CAUSE THE MARKET
VALUE OF OUR COMMON STOCK TO DECLINE.




OUR ABILITY TO SERVICE OUR DEBT AND MEET OUR CASH
REQUIREMENTS DEPENDS ON MANY FACTORS, SOME OF WHICH ARE BEYOND
OUR CONTROL. THESE FACTORS COULD HAVE A MATERIAL ADVERSE EFFECT
ON OUR BUSINESS, FINANCIAL POSITION AND RESULTS OF OPERATIONS
AND COULD CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO
DECLINE.




16



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WE DEPEND ON THIRD-PARTY SUPPLIERS AND DISTRIBUTORS FOR THE
RAW MATERIALS, PARTICULARLY THE CHEMICAL COMPOUND(S) COMPRISING
THE ACTIVE PHARMACEUTICAL INGREDIENT, THAT WE USE TO MANUFACTURE
OUR PRODUCTS, AS WELL AS CERTAIN FINISHED GOODS. A PROLONGED
INTERRUPTION IN THE SUPPLY OF SUCH PRODUCTS COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND
RESULTS OF OPERATIONS, AND THE MARKET VALUE OF OUR COMMON STOCK
COULD DECLINE.








WE USE SEVERAL MANUFACTURING FACILITIES TO MANUFACTURE OUR
PRODUCTS. HOWEVER, A SIGNIFICANT NUMBER OF OUR PRODUCTS ARE
PRODUCED AT ONE LOCATION. PRODUCTION AT THIS FACILITY COULD BE
INTERRUPTED, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS, FINANCIAL POSITION AND RESULTS OF OPERATIONS AND COULD
CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO DECLINE.




17



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WE MAY EXPERIENCE DECLINES IN THE SALES VOLUME AND PRICES OF
OUR PRODUCTS AS THE RESULT OF THE CONTINUING TREND TOWARD
CONSOLIDATION OF CERTAIN CUSTOMER GROUPS, SUCH AS THE WHOLESALE
DRUG DISTRIBUTION AND RETAIL PHARMACY INDUSTRIES, AS WELL AS THE
EMERGENCE OF LARGE BUYING GROUPS. THE RESULT OF SUCH
DEVELOPMENTS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS, FINANCIAL POSITION AND RESULTS OF OPERATIONS AND COULD
CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO DECLINE.




WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL AND OTHER
PROPRIETARY PROPERTY IN AN EFFECTIVE MANNER, WHICH COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND
RESULTS OF OPERATIONS AND COULD CAUSE THE MARKET VALUE OF OUR
COMMON STOCK TO DECLINE.




OUR COMPETITORS INCLUDING BRAND COMPANIES OR OTHER THIRD
PARTIES MAY ALLEGE THAT WE ARE INFRINGING THEIR INTELLECTUAL
PROPERTY, FORCING US TO EXPEND SUBSTANTIAL RESOURCES IN
RESULTING LITIGATION, THE OUTCOME OF WHICH IS UNCERTAIN. ANY
UNFAVORABLE OUTCOME OF SUCH LITIGATION COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND RESULTS
OF OPERATIONS AND COULD CAUSE THE MARKET VALUE OF OUR COMMON
STOCK TO DECLINE.






18



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WE MAY EXPERIENCE REDUCTIONS IN THE LEVELS OF REIMBURSEMENT
FOR PHARMACEUTICAL PRODUCTS BY GOVERNMENTAL AUTHORITIES, HMOS OR
OTHER THIRD-PARTY PAYERS. ANY SUCH REDUCTIONS COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND
RESULTS OF OPERATIONS AND COULD CAUSE THE MARKET VALUE OF OUR
COMMON STOCK TO DECLINE.




LEGISLATIVE OR REGULATORY PROGRAMS THAT MAY INFLUENCE PRICES
OF PRESCRIPTION DRUGS COULD HAVE A MATERIAL ADVERSE EFFECT ON
OUR BUSINESS, FINANCIAL POSITION AND RESULTS OF OPERATIONS AND
COULD CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO DECLINE.




WE ARE INVOLVED IN VARIOUS LEGAL PROCEEDINGS AND CERTAIN
GOVERNMENT INQUIRIES AND MAY EXPERIENCE UNFAVORABLE OUTCOMES OF
SUCH PROCEEDINGS OR INQUIRIES, WHICH COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND RESULTS
OF OPERATIONS AND COULD CAUSE THE MARKET VALUE OF OUR COMMON
STOCK TO DECLINE.






19



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WE ENTER INTO VARIOUS AGREEMENTS IN THE NORMAL COURSE OF
BUSINESS WHICH PERIODICALLY INCORPORATE PROVISIONS WHEREBY WE
INDEMNIFY THE OTHER PARTY TO THE AGREEMENT. IN THE EVENT THAT WE
WOULD HAVE TO PERFORM UNDER THESE INDEMNIFICATION PROVISIONS, IT
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL
POSITION AND RESULTS OF OPERATIONS AND COULD CAUSE THE MARKET
VALUE OF OUR COMMON STOCK TO DECLINE.




OUR ACQUISITION STRATEGIES IN GENERAL INVOLVE A NUMBER OF
INHERENT RISKS. THESE RISKS COULD CAUSE A MATERIAL ADVERSE
EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND RESULTS OF
OPERATIONS AND COULD CAUSE A DECLINE IN THE MARKET VALUE OF OUR
COMMON STOCK.






OUR FUTURE SUCCESS IS HIGHLY DEPENDENT ON OUR CONTINUED
ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL. ANY FAILURE TO
ATTRACT AND RETAIN KEY PERSONNEL COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND RESULTS OF
OPERATIONS AND COULD CAUSE THE MARKET VALUE OF OUR COMMON STOCK
TO DECLINE.




20



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RECENT DECISIONS BY THE FDA, CURRENT BRAND TACTICS AND OTHER
FACTORS BEYOND OUR CONTROL HAVE PLACED OUR BUSINESS UNDER
INCREASING PRESSURE, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT
ON OUR BUSINESS, FINANCIAL POSITION AND RESULTS OF OPERATIONS
AND COULD CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO
DECLINE.




WE HAVE BEGUN THE IMPLEMENTATION OF AN ENTERPRISE RESOURCE
PLANNING SYSTEM. AS WITH ANY IMPLEMENTATION OF A SIGNIFICANT NEW
SYSTEM, DIFFICULTIES ENCOUNTERED COULD RESULT IN BUSINESS
INTERRUPTIONS, AND COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS, FINANCIAL POSITION AND RESULTS OF OPERATIONS AND COULD
CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO DECLINE.




WE MUST MAINTAIN ADEQUATE INTERNAL CONTROLS AND BE ABLE, ON
AN ANNUAL BASIS, TO PROVIDE AN ASSERTION AS TO THE EFFECTIVENESS
OF SUCH CONTROLS. FAILURE TO MAINTAIN ADEQUATE INTERNAL CONTROLS
OR TO IMPLEMENT NEW OR IMPROVED CONTROLS COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL POSITION AND RESULTS
OF OPERATIONS AND COULD CAUSE THE MARKET VALUE OF OUR COMMON
STOCK TO DECLINE.




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THERE ARE INHERENT UNCERTAINTIES INVOLVED IN ESTIMATES,
JUDGMENTS AND ASSUMPTIONS USED IN THE PREPARATION OF FINANCIAL
STATEMENTS IN ACCORDANCE WITH GAAP. ANY FUTURE CHANGES IN
ESTIMATES, JUDGMENTS AND ASSUMPTIONS USED OR NECESSARY REVISIONS
TO PRIOR ESTIMATES, JUDGMENTS OR ASSUMPTIONS COULD LEAD TO A
RESTATEMENT WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS, FINANCIAL POSITION AND RESULTS OF OPERATIONS AND COULD
CAUSE THE MARKET VALUE OF OUR COMMON STOCK TO DECLINE.









|         |                          
|-------- | -------------------------
|ITEM 1B. | Unresolved Staff Comments








|        |           
|------- | ----------
|ITEM 2. | Properties





|               |  |        |  |                                                                              
|-------------- |  | ------ |  | -----------------------------------------------------------------------------
|Location       |  | Status |  | Primary Use                                                                  
|               |  |        |  |                                                                              
|North Carolina |  | Owned  |  | Distribution
    Warehousing                                                 
|West Virginia  |  | Owned  |  | Manufacturing
    Warehousing
    Research and Development
    Administrative
|               |  | Leased |  | Warehousing
    Administrative                                               
|Illinois       |  | Owned  |  | Manufacturing
    Warehousing
    Administrative                             
|               |  | Leased |  | Warehousing                                                                  
|Puerto Rico    |  | Owned  |  | Manufacturing
    Warehousing
    Administrative                             
|Texas          |  | Owned  |  | Manufacturing
    Warehousing                                                
|Vermont        |  | Owned  |  | Manufacturing
    Research and Development
    Administrative
    Warehousing
|Pennsylvania   |  | Owned  |  | Administrative                                                               

22



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|        |                  
|------- | -----------------
|ITEM 3. | Legal Proceedings



Omeprazole




Lorazepam and Clorazepate




Pricing and Medicaid Litigation




23



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Other Litigation









|        |                                                    
|------- | ---------------------------------------------------
|ITEM 4. | Submission of Matters to a Vote of Security Holders



24



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PART II







|        |                                                                                                                 
|------- | ----------------------------------------------------------------------------------------------------------------
|ITEM 5. | Market for Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity Securities



|               |  |      |       |  |     |   |       | 
|-------------- |  | ---- | ----- |  | --- | - | ----- | 
|Fiscal 2006    |  | High |       |  | Low |  
|               |  |      |       |  |     |  
|First quarter  |  | $    | 20.03 |  |     | $ | 15.21 | 
|Second quarter |  |      | 20.00 |  |     |   | 17.19 | 
|Third quarter  |  |      | 21.69 |  |     |   | 18.29 | 
|Fourth quarter |  |      | 25.00 |  |     |   | 19.05 | 

|               |  |      |       |  |     |   |       | 
|-------------- |  | ---- | ----- |  | --- | - | ----- | 
|Fiscal 2005    |  | High |       |  | Low |  
|               |  |      |       |  |     |  
|First quarter  |  | $    | 24.95 |  |     | $ | 19.80 | 
|Second quarter |  |      | 20.65 |  |     |   | 14.24 | 
|Third quarter  |  |      | 20.00 |  |     |   | 16.24 | 
|Fourth quarter |  |      | 18.19 |  |     |   | 15.50 | 





10-K.




|                                     |  |           |           |  |            |                 |                  |                    |                    |                 |                 |     |  |   |            | 
|------------------------------------ |  | --------- | --------- |  | ---------- | --------------- | ---------------- | ------------------ | ------------------ | --------------- | --------------- | --- |  | - | ---------- | 
|                                     |  |           |           |  |            | Total Number of |                  |                    | Approximate Dollar |                
|                                     |  | Total     |           |  |            |                 | Shares Purchased |                    |                    | Value of Shares |                
|                                     |  | Number    |           |  | Average    |                 |                  | as Part of         |                    |                 | that May Yet Be |    
|                                     |  | of Shares |           |  | Price Paid |                 |                  | Publicly Announced |                    |                 | Purchased Under |    
|Period                               |  | Purchased |           |  | per Share  |                 |                  | Plans or Programs  |                    |                 | the Program     |    
|                                     |  |           |           |  |            |                 |                  |                    |                    |                 |                 |    
|January 1, 2006  January 31, 2006   |  |           |          |  |            |                 |                 |                    |                    |                 |                |     |  | $ | 39,447,565 | 
|February 1, 2006  February 28, 2006 |  |           | 1,805,600 |  |            | $               | 21.85            |                    |                    |                 | 1,805,600       | (1) |  |   |           | 
|March 1, 2006  March 31, 2006       |  |           |          |  |            |                 |                 |                    |                    |                 |                |     |  |   |           | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | On June 14, 2005, in connection with the announcement of a
    modified Dutch Auction self-tender for up to
    $1.0 billion, which commenced on June 16, 2005 and
    closed on July 21, 2005, Mylan also announced a
    $250.0 million follow-on share repurchase program in the
    open market or otherwise. The follow-on share repurchase program
    was completed on February 14, 2006.

25



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##### Table of Contents








|        |                        
|------- | -----------------------
|ITEM 6. | Selected Financial Data

10-K.


|                            |                              |                                     |   |           |         |  |   |           |         |   |      |           |         |      |   |           |         |   |   |           |         | 
|--------------------------- | ---------------------------- | ----------------------------------- | - | --------- | ------- |  | - | --------- | ------- | - | ---- | --------- | ------- | ---- | - | --------- | ------- | - | - | --------- | ------- | 
|Fiscal Year Ended March 31, |                              | 2006                                |   |           | 2005    |  |   | 2004      |         |   | 2003 |           |         | 2002 |  
|                            |                              |                                     |   |           |         |  |   |           |         |   |      |           |         |      |  
|Statements of Earnings:     |                              |                                     |   |           |         |  |   |           |         |   |      |           |         |      |   |           |         |   |   |          
|                            | Total revenues               |                                     | $ | 1,257,164 |         |  | $ | 1,253,374 |         |   | $    | 1,374,617 |         |      | $ | 1,269,192 |         |   | $ | 1,104,050 |        
|                            | Cost of sales                |                                     |   | 629,548   |         |  |   | 629,834   |         |   |      | 612,149   |         |      |   | 597,756   |         |   |   | 480,111   |        
|                            |                              |                                     |   |           |         |  |   |           |         |   |      |           |         |      |  
|                            | Gross profit                 |                                     |   | 627,616   |         |  |   | 623,540   |         |   |      | 762,468   |         |      |   | 671,436   |         |   |   | 623,939   |        
|                            | Operating expenses:          |                                     |   |           |         |  |   |           |         |   |      |           |         |      |   |           |         |   |   |           |        
|                            |                              | Research and development            |   |           | 102,057 |  |   |           | 87,881  |   |      |           | 100,813 |      |   |           | 86,748  |   |   |           | 58,847  | 
|                            |                              | Selling, general and administrative |   |           | 225,754 |  |   |           | 259,478 |   |      |           | 201,612 |      |   |           | 173,070 |   |   |           | 169,913 | 
|                            |                              | Litigation settlements, net         |   |           | 12,417  |  |   |           | (25,990 | ) |      |           | (34,758 | )    |   |           | (2,370  | ) |   |           |        | 
|                            |                              |                                     |   |           |         |  |   |           |         |   |      |           |         |      |  
|                            | Earnings from operations     |                                     |   | 287,388   |         |  |   | 302,171   |         |   |      | 494,801   |         |      |   | 413,988   |         |   |   | 395,179   |        
|                            | Interest expense             |                                     |   | 31,285    |         |  |   |          |         |   |      |          |         |      |   |          |         |   |   |          |        
|                            | Other income, net            |                                     |   | 18,502    |         |  |   | 10,076    |         |   |      | 17,807    |         |      |   | 12,525    |         |   |   | 13,144    |        
|                            |                              |                                     |   |           |         |  |   |           |         |   |      |           |         |      |  
|                            | Earnings before income taxes |                                     |   | 274,605   |         |  |   | 312,247   |         |   |      | 512,608   |         |      |   | 426,513   |         |   |   | 408,323   |        
|                            | Provision for income taxes   |                                     |   | 90,063    |         |  |   | 108,655   |         |   |      | 177,999   |         |      |   | 154,160   |         |   |   | 148,072   |        
|                            |                              |                                     |   |           |         |  |   |           |         |   |      |           |         |      |  
|                            | Net earnings                 |                                     | $ | 184,542   |         |  | $ | 203,592   |         |   | $    | 334,609   |         |      | $ | 272,353   |         |   | $ | 260,251   |        
|                            |                              |                                     |   |           |         |  |   |           |         |   |      |           |         |      |  

|                                            |                                  |         |   |           |      |  |   |           |      |  |      |           |      |      |   |           |      |  |   |           |      | 
|------------------------------------------- | -------------------------------- | ------- | - | --------- | ---- |  | - | --------- | ---- |  | ---- | --------- | ---- | ---- | - | --------- | ---- |  | - | --------- | ---- | 
|March 31,                                   |                                  | 2006    |   |           | 2005 |  |   | 2004      |      |  | 2003 |           |      | 2002 |  
|                                            |                                  |         |   |           |      |  |   |           |      |  |      |           |      |      |  
|Selected balance sheet data:                |                                  |         |   |           |      |  |   |           |      |  |      |           |      |      |   |           |      |  |   |          
|                                            | Total assets                     |         | $ | 1,870,526 |      |  | $ | 2,135,673 |      |  | $    | 1,885,061 |      |      | $ | 1,745,223 |      |  | $ | 1,619,880 |     
|                                            | Working capital                  |         |   | 926,650   |      |  |   | 1,282,945 |      |  |      | 1,144,073 |      |      |   | 962,440   |      |  |   | 891,598   |     
|                                            | Deferred revenue                 |         |   | 89,417    |      |  |   |          |      |  |      |          |      |      |   |          |      |  |   |          |     
|                                            | Long-term obligations            |         |   | 22,435    |      |  |   | 19,325    |      |  |      | 19,130    |      |      |   | 19,943    |      |  |   | 23,883    |     
|                                            | Long-term debt                   |         |   | 685,188   |      |  |   |          |      |  |      |          |      |      |   |          |      |  |   |          |     
|                                            | Total shareholders equity       |         |   | 787,651   |      |  |   | 1,845,936 |      |  |      | 1,659,788 |      |      |   | 1,446,332 |      |  |   | 1,402,239 |     
|Per common share data:                      |                                  |         |   |           |      |  |   |           |      |  |      |           |      |      |   |           |      |  |   |          
|                                            | Net earnings                     |         |   |           |      |  |   |           |      |  |      |           |      |      |   |           |      |  |   |           |     
|                                            |                                  | Basic   |   | $         | 0.80 |  |   | $         | 0.76 |  |      | $         | 1.24 |      |   | $         | 0.98 |  |   | $         | 0.92 | 
|                                            |                                  | Diluted |   | $         | 0.79 |  |   | $         | 0.74 |  |      | $         | 1.21 |      |   | $         | 0.96 |  |   | $         | 0.91 | 
|                                            | Shareholders equity  diluted   |         | $ | 3.36      |      |  | $ | 6.75      |      |  | $    | 6.01      |      |      | $ | 5.12      |      |  | $ | 4.89      |     
|                                            | Cash dividends declared and paid |         | $ | 0.24      |      |  | $ | 0.12      |      |  | $    | 0.10      |      |      | $ | 0.08      |      |  | $ | 0.07      |     
|Weighted average common shares outstanding: |                                  |         |   |           |      |  |   |           |      |  |      |           |      |      |   |           |      |  |   |          
|                                            | Basic                            |         |   | 229,389   |      |  |   | 268,985   |      |  |      | 268,931   |      |      |   | 278,789   |      |  |   | 282,432   |     
|                                            | Diluted                          |         |   | 234,209   |      |  |   | 273,621   |      |  |      | 276,318   |      |      |   | 282,330   |      |  |   | 286,578   |     

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 7. | Managements Discussion and Analysis of Results of
    Operations and Financial Condition

12-month


forward-looking 10-K.


Overview




self-tender,










| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Nebivolol Licensing Agreement  On
    January 11, 2006, the Company announced an agreement with
    Forest Laboratories Holdings, Ltd. (Forest), a
    wholly owned subsidiary of Forest Laboratories, Inc., for the
    commercialization, development and distribution of Mylans
    beta blocker, nebivolol, in the United States (U.S.)
    and Canada. Under the terms of the agreement, Mylan received an
    up-front payment of $75.0 million, which will be deferred
    until the commercial launch of the product. Mylan also has the
    potential to earn future milestone payments as well as royalties
    based on nebivolol sales. Upon commercial launch, the up-front
    payment will be amortized into revenue over the remaining term
    of the license agreement. Forest has assumed all expenses for
    future nebivolol development programs and will be responsible
    for all sales and marketing expenses. Mylan has retained an
    option to co-promote the product in the future.
|
| |  | EMSAM®Approval  On February 28, 2006,
    Bristol-Myers Squibb Company (BMS) and Somerset
    Pharmaceuticals, Inc. (Somerset), a joint venture
    between Mylan and Watson Pharmaceuticals, Inc., announced that
    the FDA approved EMSAM (selegiline transdermal system),                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | the first transdermal patch for the treatment of major
    depressive disorder. In the prior fiscal year, Somerset entered
    into an agreement with BMS for the commercialization and
    distribution of EMSAM. EMSAM patches are manufactured by Mylan
    Technologies Inc., a subsidiary of Mylan. The product was
    launched in early fiscal 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Oxybutynin Agreements  On December 20,
    2005, Mylan announced that Mylan Pharmaceuticals Inc.
    (MPI) entered into two agreements with Ortho-McNeil
    Pharmaceutical, Inc. and Alza Corporation relating to oxybutynin
    chloride extended-release tablets, the generic equivalent of
    Ditropan XL. Under these agreements, an exclusive supply
    agreement on all strengths of oxybutynin will be triggered upon
    a final appellate court decision in the current patent
    litigation between the parties. Ortho-McNeil has also agreed to
    supply Mylan with a generic version of Ditropan XL sooner
    than a final appellate court decision if another generic version
    enters the market. Additionally, Mylan will be granted a
    non-exclusive, royalty bearing license to make and sell its ANDA
    products. The terms of these agreements differ depending upon
    the final outcome of the pending patent litigation. The terms of
    the agreements are confidential and subject to a number of
    conditions, including review by the U.S. Federal Trade
    Commission. Mylan has received tentative approval and is
    currently awaiting final approval from the FDA for its 5 mg
    and 10 mg strengths of oxybutynin. Prior to a final
    appellate court decision, Mylan retains all of the options that
    had been available to it with respect to oxybutynin prior to the
    signing of these agreements.
|
| |  | Sale of
    Apokyn® 
    On November 24, 2005, the Company announced the sale of the
    U.S. and Canadian rights for Apokyn to Vernalis plc. Under the
    terms of the agreement, Mylan received a cash payment of
    $23.0 million. In addition, Mylan will perform certain
    transitional services for one year, including supply chain
    management and customer service assistance. During fiscal 2006,
    $8.9 million of revenue associated with the sale was
    recognized and included in other revenues. The remainder, net of
    certain related assets, has been recorded as deferred revenue
    and is being recognized over the one-year period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Share Buyback  On July 21, 2005, Mylan
    closed on its modified Dutch Auction self-tender and
    accepted for payment an aggregate purchase price of
    approximately $1.0 billion, 51,282,051 shares of its
    common stock at a price of $19.50 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Subsequent to the completion of the Dutch Auction
    self-tender, Mylan completed a previously announced open market
    follow-on repurchase by repurchasing 12,595,200 shares of
    its common stock on the open market for an aggregate purchase
    price of approximately $250.0 million.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Financing  The share buyback described above
    was financed through Mylans existing cash reserves as well
    as $500.0 million in Senior Notes and a $275.0 million
    borrowing under a $500.0 million senior secured credit
    facility. The Senior Notes, which were issued on July 21,
    2005, consist of $150.0 million of Senior Notes due 2010,
    and bearing interest at
    53/4% per
    annum, and $350.0 million of Senior Notes due 2015, and
    bearing interest at
    63/8% per annum. The senior secured credit facility,
    which was also entered into on July 21, 2005, consists of a
    $225.0 million five-year revolving credit facility, which
    the Company expects to use for working capital and general
    corporate purposes, and a $275.0 million five-year term
    loan. The term loan bears interest at LIBOR plus 150 basis
    points or prime plus 50 basis points at the Companys
    option. The interest rate in effect on the term loan at
    March 31, 2006, was 6.33%. At March 31, 2006,
    $188.0 million was outstanding under the term loan and no
    borrowings were outstanding under the revolving credit facility.
|
| |  | Closure of Mylan Bertek  During the first
    quarter of fiscal 2006, Mylan announced that it was closing
    Mylan Bertek Pharmaceuticals Inc. (Mylan Bertek),
    its branded subsidiary, and transferring responsibility for
    selling Mylan Berteks products to its other subsidiaries,
    MPI and UDL Laboratories, Inc. In connection with this
    restructuring, the Company incurred restructuring charges of
    $20.9 million, of which $19.9 million was included in
    selling, general and administrative (SG&A)
    expense. The restructuring charge consisted primarily of
    employee termination and severance costs associated with the
    Mylan Bertek sales force, along with lease termination costs and
    asset write-downs. As of March 31, 2006, the restructuring
    was substantially completed.                                                                                                                                                                                                                                                                                                                                              

28



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Results of Operations


Fiscal 2006 Compared to Fiscal 2005


Total Revenues and Gross Profit












Operating Expenses




29



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write-downs.


Litigation Settlements, net




Interest Expense




Other Income, net






Income Taxes




Fiscal 2005 Compared to Fiscal 2004


Total Revenues and Gross Profit




30



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tm












Operating Expenses






31



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##### Table of Contents



payroll-related product-related


Litigation Settlements, net




® co-defendants


Other Income, net




The Equity Method of Accounting for
Investments in Common Stock,


Liquidity and Capital Resources










32



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33



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##### Table of Contents



Contractual Obligations




|                            |  |       |           |           |          |   |           |       |  |            |         |  |  |            |         |  |  |   |         | 
|--------------------------- |  | ----- | --------- | --------- | -------- | - | --------- | ----- |  | ---------- | ------- |  |  | ---------- | ------- |  |  | - | ------- | 
|                            |  |       |           | Less than |          |   | One-Three |       |  | Three-Five |         |  | 
|As of March 31, 2006        |  | Total |           |           | One Year |   |           | Years |  |            | Years   |  |  | Thereafter |        
|                            |  |       |           |           |          |   |           |       |  |            |         |  |  |            |        
|(in thousands)              |  |       |           |           |          |   |           |       |  |           
|Operating leases            |  | $     | 9,911     |           |          | $ | 3,944     |       |  | $          | 5,466   |  |  | $          | 321     |  |  | $ | 180     | 
|Other long-term obligations |  |       | 22,435    |           |          |   | 1,821     |       |  |            | 5,463   |  |  |            | 5,463   |  |  |   | 9,688   | 
|Long-term debt              |  |       | 691,927   |           |          |   | 6,739     |       |  |            | 8,250   |  |  |            | 176,938 |  |  |   | 500,000 | 
|Scheduled interest payments |  |       | 286,889   |           |          |   | 42,660    |       |  |            | 122,817 |  |  |            | 47,967  |  |  |   | 73,445  | 
|Revolving credit facility   |  |       |          |           |          |   |          |       |  |            |        |  |  |            |        |  |  |   |        | 
|Letter of credit            |  |       | 975       |           |          |   | 975       |       |  |            |        |  |  |            |        |  |  |   |        | 
|                            |  |       |           |           |          |   |           |       |  |            |         |  |  |            |        
|                            |  | $     | 1,012,137 |           |          | $ | 56,139    |       |  | $          | 141,996 |  |  | $          | 230,689 |  |  | $ | 583,313 | 
|                            |  |       |           |           |          |   |           |       |  |            |         |  |  |            |        



3 4 3 8










34



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##### Table of Contents







Application of Critical Accounting Policies




Net Revenue Provisions






|                                    |  |            |         |  |                 |                   |            |                  |  |   |            |  |  |   |         | 
|----------------------------------- |  | ---------- | ------- |  | --------------- | ----------------- | ---------- | ---------------- |  | - | ---------- |  |  | - | ------- | 
|                                    |  |            |         |  |                 | Current Provision |            |                  | 
|                                    |  | Balance at |         |  | Checks/Credits  |                   |            | Related to Sales |  |   | Balance at | 
|                                    |  | March 31,  |         |  | Issued to Third |                   |            | Made in the      |  |   | March 31,  | 
|                                    |  | 2005       |         |  | Parties         |                   |            | Current Period   |  |   | 2006       | 
|(in thousands)                      |  |            |         |  |                 |                   |            |                  |  |   |            | 
|Chargebacks                         |  | $          | 166,066 |  |                 | $                 | (1,081,389 | )                |  | $ | 1,106,560  |  |  | $ | 191,237 | 
|Customer performance and promotions |  | $          | 69,802  |  |                 | $                 | (167,837   | )                |  | $ | 160,797    |  |  | $ | 62,762  | 
|Returns                             |  | $          | 46,544  |  |                 | $                 | (39,177    | )                |  | $ | 44,401     |  |  | $ | 51,768  | 





35



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Price Adjustments


Returns over-the


Chargebacks


Legal Matters




36



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##### Table of Contents





Recent Accounting Pronouncements


Share-Based Payment. Accounting for
Stock Issued to Employees.







|         |                                                           
|-------- | ----------------------------------------------------------
|ITEM 7A. | Quantitative and Qualitative Disclosures about Market Risk







|                             |  |      |         |  |      |   |         | 
|---------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                             |  | 2006 |         |  | 2005 |  
|                             |  |      |         |  |      |  
|(in thousands)               |  |      |         | 
|Marketable debt securities   |  | $    | 362,458 |  |      | $ | 667,170 | 
|Marketable equity securities |  |      | 5,545   |  |      |   | 3,178   | 
|                             |  |      |         |  |      |  
|                             |  | $    | 368,003 |  |      | $ | 670,348 | 
|                             |  |      |         |  |      |  

Marketable Debt Securities




37



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Long-Term Debt






38



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|        |                                            
|------- | -------------------------------------------
|ITEM 8. | Financial Statements and Supplementary Data

Index to Consolidated Financial Statements and


Supplementary Financial Information


|                                                                                                                 |  |      |    | 
|---------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                                 |  | Page |   
|                                                                                                                 |  |      |   
|Consolidated Balance Sheets as of
    March 31, 2006 and 2005                                                    |  |      | 40 | 
|Consolidated Statements of Earnings for the
    fiscal years ended March 31, 2006, 2005 and 2004                 |  |      | 41 | 
|Consolidated Statements of
    Shareholders Equity for the fiscal years ended
    March 31, 2006, 2005 and 2004 |  |      | 42 | 
|Consolidated Statements of Cash Flows for
    the fiscal years ended March 31, 2006, 2005 and 2004               |  |      | 43 | 
|Notes to Consolidated Financial
    Statements                                                                   |  |      | 44 | 
|Managements Report on Internal
    Control over Financial Reporting                                             |  |      | 63 | 
|Reports of Independent Registered Public
    Accounting Firm                                                     |  |      | 64 | 
|Supplementary Financial Information                                                                              |  |      | 66 | 

39



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Mylan Laboratories Inc.





Consolidated Balance Sheets




|                                           |                                    |                                             |                                                            |                           |           |           |           |           |           |           |         | 
|------------------------------------------ | ---------------------------------- | ------------------------------------------- | ---------------------------------------------------------- | ------------------------- | --------- | --------- | --------- | --------- | --------- | --------- | ------- | 
|March 31,                                  |                                    | 2006                                        |                                                            |                           | 2005      |          
|                                           |                                    |                                             |                                                            |                           |           |          
|Assets                                     |                                    |                                             |                                                            |                           |           |           |           |          
|                                           | Current assets:                    |                                             |                                                            |                           |           |           |           |           |          
|                                           |                                    | Cash and cash equivalents                   |                                                            | $                         | 150,124   |           |           | $         | 137,733   |          
|                                           |                                    | Marketable securities                       |                                                            |                           | 368,003   |           |           |           | 670,348   |          
|                                           |                                    | Accounts receivable, net                    |                                                            |                           | 242,193   |           |           |           | 297,334   |          
|                                           |                                    | Inventories                                 |                                                            |                           | 279,008   |           |           |           | 286,267   |          
|                                           |                                    | Deferred income tax benefit                 |                                                            |                           | 137,672   |           |           |           | 119,327   |          
|                                           |                                    | Prepaid expenses and other current assets   |                                                            |                           | 14,900    |           |           |           | 17,443    |          
|                                           |                                    |                                             |                                                            |                           |           |          
|                                           |                                    |                                             | Total current assets                                       |                           |           | 1,191,900 |           |           |           | 1,528,452 |        
|                                           | Property, plant and equipment, net |                                             |                                                            | 406,875                   |           |           |           | 336,719   |          
|                                           | Intangible assets, net             |                                             |                                                            | 105,595                   |           |           |           | 120,493   |          
|                                           | Goodwill                           |                                             |                                                            | 102,579                   |           |           |           | 102,579   |          
|                                           | Other assets                       |                                             |                                                            | 63,577                    |           |           |           | 47,430    |          
|                                           |                                    |                                             |                                                            |                           |           |          
|Total assets                               |                                    | $                                           | 1,870,526                                                  |                           |           | $         | 2,135,673 |          
|                                           |                                    |                                             |                                                            |                           |           |          
|Liabilities and shareholders equity       |                                    |                                             |                                                            |                           |           |           |           |          
|                                           | Liabilities                        |                                             |                                                            |                           |           |           |           |           |          
|                                           |                                    | Current liabilities:                        |                                                            |                           |           |           |           |           |           |          
|                                           |                                    |                                             | Trade accounts payable                                     |                           | $         | 76,859    |           |           | $         | 78,114    |        
|                                           |                                    |                                             | Income taxes payable                                       |                           |           | 12,963    |           |           |           | 44,123    |        
|                                           |                                    |                                             | Current portion of long-term obligations                   |                           |           | 4,336     |           |           |           | 1,586     |        
|                                           |                                    |                                             | Cash dividends payable                                     |                           |           | 12,605    |           |           |           | 8,078     |        
|                                           |                                    |                                             | Other current liabilities                                  |                           |           | 158,487   |           |           |           | 113,606   |        
|                                           |                                    |                                             |                                                            |                           |           |          
|                                           |                                    |                                             |                                                            | Total current liabilities |           |           | 265,250   |           |           |           | 245,507 | 
|                                           |                                    | Deferred revenue                            |                                                            |                           | 89,417    |           |           |           |          |          
|                                           |                                    | Long-term debt                              |                                                            |                           | 685,188   |           |           |           |          |          
|                                           |                                    | Other long-term obligations                 |                                                            |                           | 22,435    |           |           |           | 19,325    |          
|                                           |                                    | Deferred income tax liability               |                                                            |                           | 20,585    |           |           |           | 24,905    |          
|                                           |                                    |                                             |                                                            |                           |           |          
|Total liabilities                          |                                    |                                             | 1,082,875                                                  |                           |           |           | 289,737   |          
|                                           |                                    |                                             |                                                            |                           |           |          
|                                           | Shareholders equity               |                                             |                                                            |                           |           |           |           |           |          
|                                           |                                    | Preferred stock  par value $0.50 per share |                                                            |                           |           |           |           |           |           |          
|                                           |                                    |                                             | Shares authorized: 5,000,000 Shares issued: none           |                           |           |          |           |           |           |          |        
|                                           |                                    | Common stock  par value $0.50 per share    |                                                            |                           |           |           |           |           |           |          
|                                           |                                    |                                             | Shares authorized: 600,000,000 in 2006 and 2005            |                           |           |           |           |           |           |           |        
|                                           |                                    |                                             | Shares issued: 309,150,251 in 2006 and 304,434,724 in 2005 |                           |           | 154,575   |           |           |           | 152,217   |        
|                                           |                                    | Additional paid-in capital                  |                                                            |                           | 418,954   |           |           |           | 354,172   |          
|                                           |                                    | Retained earnings                           |                                                            |                           | 1,939,045 |           |           |           | 1,808,802 |          
|                                           |                                    | Accumulated other comprehensive earnings    |                                                            |                           | 2,450     |           |           |           | 870       |          
|                                           |                                    |                                             |                                                            |                           |           |          
|                                           |                                    |                                             |                                                            |                           | 2,515,024 |           |           |           | 2,316,061 |          
|                                           |                                    | Less treasury stock  at cost               |                                                            |                           |           |           |           |           |           |          
|                                           |                                    |                                             | Shares: 98,971,431 in 2006 and 35,129,643 in 2005          |                           |           | 1,727,373 |           |           |           | 470,125   |        
|                                           |                                    |                                             |                                                            |                           |           |          
|                                           | Total shareholders equity         |                                             |                                                            | 787,651                   |           |           |           | 1,845,936 |          
|                                           |                                    |                                             |                                                            |                           |           |          
|Total liabilities and shareholders equity |                                    | $                                           | 1,870,526                                                  |                           |           | $         | 2,135,673 |          
|                                           |                                    |                                             |                                                            |                           |           |          

See Notes to Consolidated Financial Statements.


40



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##### Table of Contents



Mylan Laboratories Inc.





Consolidated Statements of Earnings




|                                            |                                     |                          |           |           |         |   |           |           |         |   |           |           |         | 
|------------------------------------------- | ----------------------------------- | ------------------------ | --------- | --------- | ------- | - | --------- | --------- | ------- | - | --------- | --------- | ------- | 
|Fiscal Year Ended March 31,                 |                                     | 2006                     |           |           | 2005    |   |           | 2004      |        
|                                            |                                     |                          |           |           |         |   |           |           |        
|Revenues:                                   |                                     |                          |           |           |         |   |           |           |         |   |           |          
|                                            | Net revenues                        |                          | $         | 1,239,988 |         |   | $         | 1,247,785 |         |   | $         | 1,355,150 |        
|                                            | Other revenues                      |                          |           | 17,176    |         |   |           | 5,589     |         |   |           | 19,467    |        
|                                            |                                     |                          |           |           |         |   |           |           |        
|Total revenues                              |                                     |                          | 1,257,164 |           |         |   | 1,253,374 |           |         |   | 1,374,617 |          
|Cost of sales                               |                                     |                          | 629,548   |           |         |   | 629,834   |           |         |   | 612,149   |          
|                                            |                                     |                          |           |           |         |   |           |           |        
|Gross profit                                |                                     |                          | 627,616   |           |         |   | 623,540   |           |         |   | 762,468   |          
|Operating expenses:                         |                                     |                          |           |           |         |   |           |           |         |   |           |          
|                                            | Research and development            |                          |           | 102,057   |         |   |           | 87,881    |         |   |           | 100,813   |        
|                                            | Selling, general and administrative |                          |           | 225,754   |         |   |           | 259,478   |         |   |           | 201,612   |        
|                                            | Litigation settlements, net         |                          |           | 12,417    |         |   |           | (25,990   | )       |   |           | (34,758   | )      
|                                            |                                     |                          |           |           |         |   |           |           |        
|                                            |                                     | Total operating expenses |           |           | 340,228 |   |           |           | 321,369 |   |           |           | 267,667 | 
|                                            |                                     |                          |           |           |         |   |           |           |        
|Earnings from operations                    |                                     |                          | 287,388   |           |         |   | 302,171   |           |         |   | 494,801   |          
|Interest expense                            |                                     |                          | 31,285    |           |         |   |          |           |         |   |          |          
|Other income, net                           |                                     |                          | 18,502    |           |         |   | 10,076    |           |         |   | 17,807    |          
|                                            |                                     |                          |           |           |         |   |           |           |        
|Earnings before income taxes                |                                     |                          | 274,605   |           |         |   | 312,247   |           |         |   | 512,608   |          
|Provision for income taxes                  |                                     |                          | 90,063    |           |         |   | 108,655   |           |         |   | 177,999   |          
|                                            |                                     |                          |           |           |         |   |           |           |        
|Net earnings                                |                                     | $                        | 184,542   |           |         | $ | 203,592   |           |         | $ | 334,609   |          
|                                            |                                     |                          |           |           |         |   |           |           |        
|Earnings per common share:                  |                                     |                          |           |           |         |   |           |           |         |   |           |          
|                                            | Basic                               |                          | $         | 0.80      |         |   | $         | 0.76      |         |   | $         | 1.24      |        
|                                            |                                     |                          |           |           |         |   |           |           |        
|                                            | Diluted                             |                          | $         | 0.79      |         |   | $         | 0.74      |         |   | $         | 1.21      |        
|                                            |                                     |                          |           |           |         |   |           |           |        
|Weighted average common shares outstanding: |                                     |                          |           |           |         |   |           |           |         |   |           |          
|                                            | Basic                               |                          |           | 229,389   |         |   |           | 268,985   |         |   |           | 268,931   |        
|                                            |                                     |                          |           |           |         |   |           |           |        
|                                            | Diluted                             |                          |           | 234,209   |         |   |           | 273,621   |         |   |           | 276,318   |        
|                                            |                                     |                          |           |           |         |   |           |           |        

See Notes to Consolidated Financial Statements.


41



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##### Table of Contents



Mylan Laboratories Inc.





Consolidated Statements of Shareholders Equity




|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |             |        |             |             |             |        |  
|----------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------ | ------------------------------------------- | ----------- | ----------- | ----- | ----------- | ----------- | ----------- | ------ | ----------- | ----------- | ----------- | ------ | -
|Fiscal Year Ended March 31,               |                                                                                                                                | 2006                                                         |                                             |             | 2005        |       |             | 2004        |            
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|Common stock  shares issued:             |                                                                                                                                |                                                              |                                             |             |             |       |             |             |             |        |             |            
|                                          | Shares at beginning of year                                                                                                    |                                                              |                                             | 304,434,724 |             |       |             | 303,553,121 |             |        |             | 300,904,262 |            
|                                          | Stock options exercised                                                                                                        |                                                              |                                             | 4,715,527   |             |       |             | 881,603     |             |        |             | 2,648,859   |            
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|                                          |                                                                                                                                | Shares at end of year                                        |                                             |             | 309,150,251 |       |             |             | 304,434,724 |        |             |             | 303,553,121 |       
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|Treasury stock:                           |                                                                                                                                |                                                              |                                             |             |             |       |             |             |             |        |             |            
|                                          | Shares at beginning of year                                                                                                    |                                                              |                                             | (35,129,643 | )           |       |             | (35,129,643 | )           |        |             | (29,143,443 | )          
|                                          | Issuance of restricted stock                                                                                                   |                                                              |                                             | 35,463      |             |       |             |            |             |        |             | 472,500     |            
|                                          | Stock purchases                                                                                                                |                                                              |                                             | (63,877,251 | )           |       |             |            |             |        |             | (6,458,700  | )          
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|                                          |                                                                                                                                | Shares at end of year                                        |                                             |             | (98,971,431 | )     |             |             | (35,129,643 | )      |             |             | (35,129,643 | )     
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|Common shares outstanding                 |                                                                                                                                |                                                              | 210,178,820                                 |             |             |       | 269,305,081 |             |             |        | 268,423,478 |            
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|Common stock, $0.50 par:                  |                                                                                                                                |                                                              |                                             |             |             |       |             |             |             |        |             |            
|                                          | Balance at beginning of year                                                                                                   |                                                              | $                                           | 152,217     |             |       | $           | 151,777     |             |        | $           | 150,452     |            
|                                          | Stock options exercised                                                                                                        |                                                              |                                             | 2,358       |             |       |             | 440         |             |        |             | 1,325       |            
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|                                          |                                                                                                                                | Balance at end of year                                       |                                             |             | 154,575     |       |             |             | 152,217     |        |             |             | 151,777     |       
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|Additional paid-in capital:               |                                                                                                                                |                                                              |                                             |             |             |       |             |             |             |        |             |            
|                                          | Balance at beginning of year                                                                                                   |                                                              |                                             | 354,172     |             |       |             | 338,143     |             |        |             | 304,350     |            
|                                          | Stock options exercised                                                                                                        |                                                              |                                             | 54,531      |             |       |             | 9,628       |             |        |             | 25,342      |            
|                                          | Issuance of restricted stock                                                                                                   |                                                              |                                             | 181         |             |       |             |            |             |        |             | 5,656       |            
|                                          | Unearned compensation                                                                                                          |                                                              |                                             | 3,142       |             |       |             | 3,901       |             |        |             | (9,352      | )          
|                                          | Tax benefit of stock option plans                                                                                              |                                                              |                                             | 7,221       |             |       |             | 2,500       |             |        |             | 12,159      |            
|                                          | Other                                                                                                                          |                                                              |                                             | (293        | )           |       |             |            |             |        |             | (12         | )          
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|                                          |                                                                                                                                | Balance at end of year                                       |                                             |             | 418,954     |       |             |             | 354,172     |        |             |             | 338,143     |       
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|Retained earnings:                        |                                                                                                                                |                                                              |                                             |             |             |       |             |             |             |        |             |            
|                                          | Balance at beginning of year                                                                                                   |                                                              |                                             | 1,808,802   |             |       |             | 1,637,497   |             |        |             | 1,330,933   |            
|                                          | Net earnings                                                                                                                   |                                                              |                                             | 184,542     |             |       |             | 203,592     |             |        |             | 334,609     |            
|                                          | Dividends declared ($0.24 per share for fiscal 2006,
    $0.12 per share for fiscal 2005, $0.10 per share for
    fiscal 2004) |                                                              |                                             | (54,299     | )           |       |             | (32,287     | )           |        |             | (28,045     | )          
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|                                          |                                                                                                                                | Balance at end of year                                       |                                             |             | 1,939,045   |       |             |             | 1,808,802   |        |             |             | 1,637,497   |       
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|Accumulated other comprehensive earnings: |                                                                                                                                |                                                              |                                             |             |             |       |             |             |             |        |             |            
|                                          | Balance at beginning of year                                                                                                   |                                                              |                                             | 870         |             |       |             | 2,496       |             |        |             | 3,718       |            
|                                          | Net unrealized gain (loss) on marketable securities                                                                            |                                                              |                                             | 1,580       |             |       |             | (1,626      | )           |        |             | (1,222      | )          
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|                                          |                                                                                                                                | Balance at end of year                                       |                                             |             | 2,450       |       |             |             | 870         |        |             |             | 2,496       |       
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|Treasury stock, at cost:                  |                                                                                                                                |                                                              |                                             |             |             |       |             |             |             |        |             |            
|                                          | Balance at beginning of year                                                                                                   |                                                              |                                             | (470,125    | )           |       |             | (470,125    | )           |        |             | (343,121    | )          
|                                          | Issuance of restricted stock                                                                                                   |                                                              |                                             | 619         |             |       |             |            |             |        |             | 6,084       |            
|                                          | Stock purchases                                                                                                                |                                                              |                                             | (1,257,867  | )           |       |             |            |             |        |             | (133,088    | )          
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|                                          |                                                                                                                                | Balance at end of year                                       |                                             |             | (1,727,373  | )     |             |             | (470,125    | )      |             |             | (470,125    | )     
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|Total shareholders equity                |                                                                                                                                | $                                                            | 787,651                                     |             |             | $     | 1,845,936   |             |             | $      | 1,659,788   |            
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|Comprehensive earnings:                   |                                                                                                                                |                                                              |                                             |             |             |       |             |             |             |        |             |            
|                                          | Net earnings                                                                                                                   |                                                              | $                                           | 184,542     |             |       | $           | 203,592     |             |        | $           | 334,609     |            
|                                          | Other comprehensive earnings (loss), net of tax:                                                                               |                                                              |                                             |             |             |       |             |             |             |        |             |             |            
|                                          |                                                                                                                                | Net unrealized holding gains (losses) gains on securities    |                                             |             | 1,397       |       |             |             | (1,711      | )      |             |             | 3,009       |       
|                                          |                                                                                                                                | Reclassification for losses (gains) included in net earnings |                                             |             | 183         |       |             |             | 85          |        |             |             | (4,231      | )     
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|                                          |                                                                                                                                |                                                              | Other comprehensive gain (loss), net of tax |             |             | 1,580 |             |             |             | (1,626 | )           |             |             | (1,222 | )
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            
|                                          | Comprehensive earnings                                                                                                         |                                                              | $                                           | 186,122     |             |       | $           | 201,966     |             |        | $           | 333,387     |            
|                                          |                                                                                                                                |                                                              |                                             |             |             |       |             |             |            

See Notes to Consolidated Financial Statements.


42



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##### Table of Contents



Mylan Laboratories Inc.





Consolidated Statements of Cash Flows




|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |          |          |          |          |          |          |         |  
|---------------------------------------------------- | ----------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ------------------------------------------------------- | ------------------------------------------- | -------- | ------- | ------- | ------- | -------- | -------- | -------- | -------- | -------- | -------- | ------- | -
|Fiscal Year Ended March 31,                          |                                                                                           | 2006                                                       |                                                         |                                             | 2005     |         |         | 2004    |         
|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |         
|Cash flows from operating activities:                |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |          |          |          |         
|                                                     | Net earnings                                                                              |                                                            | $                                                       | 184,542                                     |          |         | $       | 203,592 |          |          | $        | 334,609  |         
|                                                     | Adjustments to reconcile net earnings to net cash provided from
    operating activities: |                                                            |                                                         |                                             |          |         |         |         |          |          |          |          |         
|                                                     |                                                                                           |                                                            | Depreciation and amortization                           |                                             |          | 46,827  |         |         |          | 45,100   |          |          |          | 44,323   |        
|                                                     |                                                                                           |                                                            | Realized gain on sale of marketable securities          |                                             |          |        |         |         |          |         |          |          |          | (6,509   | )      
|                                                     |                                                                                           |                                                            | Net loss from equity method investees                   |                                             |          | 2,538   |         |         |          | 2,372    |          |          |          | 4,459    |        
|                                                     |                                                                                           |                                                            | Change in estimated sales allowances                    |                                             |          | 41,047  |         |         |          | 108,778  |          |          |          | (24,016  | )      
|                                                     |                                                                                           |                                                            | Restructuring provision                                 |                                             |          | 20,921  |         |         |          |         |          |          |          |         |        
|                                                     |                                                                                           |                                                            | Deferred income tax (benefit) expense                   |                                             |          | (23,635 | )       |         |          | (36,899  | )        |          |          | 32,275   |        
|                                                     |                                                                                           |                                                            | Gain on sale of building                                |                                             |          |        |         |         |          |         |          |          |          | (5,000   | )      
|                                                     |                                                                                           |                                                            | Other non-cash items                                    |                                             |          | 15,768  |         |         |          | 7,951    |          |          |          | 765      |        
|                                                     |                                                                                           |                                                            | Loss (gain) from litigation, net                        |                                             |          | 12,417  |         |         |          | (25,990  | )        |          |          | (34,758  | )      
|                                                     |                                                                                           |                                                            | Receipts from (payments of) litigation settlements, net |                                             |          | 1,691   |         |         |          | 42,990   |          |          |          | (16,630  | )      
|                                                     |                                                                                           |                                                            | Cash received from Somerset                             |                                             |          |        |         |         |          |         |          |          |          | 10,000   |        
|                                                     |                                                                                           |                                                            | Changes in operating assets and liabilities:            |                                             |          |         |         |         |          |          |          |          |          |          |        
|                                                     |                                                                                           |                                                            |                                                         | Accounts receivable                         |          |         | 19,081  |         |          |          | (192,799 | )        |          |          | 18,617  |  
|                                                     |                                                                                           |                                                            |                                                         | Inventories                                 |          |         | 6,012   |         |          |          | 34,530   |          |          |          | (83,020 | )
|                                                     |                                                                                           |                                                            |                                                         | Trade accounts payable                      |          |         | 20,534  |         |          |          | 8,082    |          |          |          | (25,378 | )
|                                                     |                                                                                           |                                                            |                                                         | Income taxes                                |          |         | (23,821 | )       |          |          | 22,010   |          |          |          | (11,096 | )
|                                                     |                                                                                           |                                                            |                                                         | Deferred revenue                            |          |         | 106,642 |         |          |          |         |          |          |          |        |  
|                                                     |                                                                                           |                                                            |                                                         | Other operating assets and liabilities, net |          |         | (14,003 | )       |          |          | (16,006  | )        |          |          | (13,063 | )
|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |         
|                                                     |                                                                                           |                                                            | Net cash provided by operating activities               |                                             |          | 416,561 |         |         |          | 203,711  |          |          |          | 225,578  |        
|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |         
|Cash flows from investing activities:                |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |          |          |          |         
|                                                     | Proceeds from (purchase of):                                                              |                                                            |                                                         |                                             |          |         |         |         |          |          |          |          |         
|                                                     |                                                                                           | Capital assets                                             |                                                         |                                             | (103,689 | )       |         |         | (90,746  | )        |          |          | (118,451 | )       
|                                                     |                                                                                           | Reduction of investment in a limited liability partnership |                                                         |                                             |         |         |         |         |         |          |          |          | 7,269    |         
|                                                     |                                                                                           | Sale of assets                                             |                                                         |                                             |         |         |         |         |         |          |          |          | 12,000   |         
|                                                     |                                                                                           | Purchase of marketable securities                          |                                                         |                                             | (686,569 | )       |         |         | (780,806 | )        |          |          | (793,539 | )       
|                                                     |                                                                                           | Proceeds from sale of marketable securities                |                                                         |                                             | 991,060  |         |         |         | 693,289  |          |          |          | 640,511  |         
|                                                     |                                                                                           | Other items, net                                           |                                                         |                                             | (5,710   | )       |         |         | 3,372    |          |          |          | 1,884    |         
|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |         
|                                                     |                                                                                           |                                                            | Net cash provided by (used in) investing activities     |                                             |          | 195,092 |         |         |          | (174,891 | )        |          |          | (250,326 | )      
|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |         
|Cash flows from financing activities:                |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |          |          |          |         
|                                                     | Cash dividends paid                                                                       |                                                            |                                                         | (49,772                                     | )        |         |         | (32,261 | )        |          |          | (26,024  | )       
|                                                     | Payment of financing fees                                                                 |                                                            |                                                         | (14,662                                     | )        |         |         |        |          |          |          |         |         
|                                                     | Proceeds from long-term debt                                                              |                                                            |                                                         | 775,000                                     |          |         |         |        |          |          |          |         |         
|                                                     | Payment of long-term debt                                                                 |                                                            |                                                         | (87,062                                     | )        |         |         |        |          |          |          |         |         
|                                                     | Purchase of common stock                                                                  |                                                            |                                                         | (1,257,867                                  | )        |         |         |        |          |          |          | (133,088 | )       
|                                                     | Proceeds from exercise of stock options                                                   |                                                            |                                                         | 56,889                                      |          |         |         | 10,068  |          |          |          | 26,671   |         
|                                                     | (Decrease) increase in outstanding checks in excess of cash in
    disbursement accounts  |                                                            |                                                         | (21,788                                     | )        |         |         | 19,622  |          |          |          | 9,771    |         
|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |         
|                                                     |                                                                                           | Net cash used in financing activities                      |                                                         |                                             | (599,262 | )       |         |         | (2,571   | )        |          |          | (122,670 | )       
|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |         
|Net increase (decrease) in cash and cash equivalents |                                                                                           |                                                            | 12,391                                                  |                                             |          |         | 26,249  |         |          |          | (147,418 | )       
|Cash and cash equivalents  beginning of year        |                                                                                           |                                                            | 137,733                                                 |                                             |          |         | 111,484 |         |          |          | 258,902  |         
|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |         
|Cash and cash equivalents  end of year              |                                                                                           | $                                                          | 150,124                                                 |                                             |          | $       | 137,733 |         |          | $        | 111,484  |         
|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |         
|Supplemental disclosures of cash flow information:   |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |          |          |          |         
|Cash paid during the year for:                       |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |          |          |          |         
|                                                     | Income taxes                                                                              |                                                            | $                                                       | 137,519                                     |          |         | $       | 123,725 |          |          | $        | 156,821  |         
|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |         
|                                                     | Interest                                                                                  |                                                            | $                                                       | 29,110                                      |          |         | $       |        |          |          | $        |         |         
|                                                     |                                                                                           |                                                            |                                                         |                                             |          |         |         |         |         

See Notes to Consolidated Financial Statements.


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Mylan Laboratories Inc.





Notes to Consolidated Financial Statements




|        |                     
|------- | --------------------
|Note 1. | Nature of Operations





|        |                                           
|------- | ------------------------------------------
|Note 2. | Summary of Significant Accounting Policies

Principles of Consolidation.


Disclosures about Segments of an Enterprise and Related
Information,


Cash Equivalents.


Marketable Securities.


Concentrations of Credit Risk.






Inventories. first-in,


scale-up scale-up


44



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scale-up






Property, Plant and Equipment.


Intangible Assets.


Impairment of Long-Lived Assets.






Other Assets.


Revenue Recognition.






45



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Revenue Recognition,
corrected copy 00-21, Revenue Arrangements with Multiple Deliverables.








46



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|                            |  |      |           |  |      |   |           |      |  |   |           | 
|--------------------------- |  | ---- | --------- |  | ---- | - | --------- | ---- |  | - | --------- | 
|Fiscal Year Ended March 31, |  | 2006 |           |  | 2005 |   |           | 2004 | 
|                            |  |      |           |  |      |   |           |      | 
|(in thousands)              |  |      |           |  |      |  
|Central Nervous System      |  | $    | 475,898   |  |      | $ | 366,654   |      |  | $ | 322,790   | 
|Cardiovascular              |  |      | 422,727   |  |      |   | 484,588   |      |  |   | 530,613   | 
|Dermatology                 |  |      | 72,843    |  |      |   | 74,048    |      |  |   | 102,513   | 
|Gastrointestinal            |  |      | 46,701    |  |      |   | 93,713    |      |  |   | 137,743   | 
|Other(1)                    |  |      | 221,819   |  |      |   | 228,782   |      |  |   | 261,491   | 
|                            |  |      |           |  |      |   |           |      | 
|                            |  | $    | 1,239,988 |  |      | $ | 1,247,785 |      |  | $ | 1,355,150 | 
|                            |  |      |           |  |      |   |           |      | 






|    |                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------
|(1) | Other consists of numerous therapeutic classes, none of which
    individually exceeds 5% of consolidated revenues.

Research and Development.


Advertising Costs.


Income Taxes.


Earnings per Common Share.




|                                                                                      |         |      |         |      |      |   |         |      |  |   |         |      | 
|------------------------------------------------------------------------------------- | ------- | ---- | ------- | ---- | ---- | - | ------- | ---- |  | - | ------- | ---- | 
|Fiscal Year Ended March 31,                                                           |         | 2006 |         |      | 2005 |   |         | 2004 | 
|                                                                                      |         |      |         |      |      |   |         |      | 
|(in thousands, except per share data)                                                 |         |      |         |      |      |  
|Net earnings                                                                          |         | $    | 184,542 |      |      | $ | 203,592 |      |  | $ | 334,609 |     
|                                                                                     
|Weighted average common shares outstanding                                            |         |      | 229,389 |      |      |   | 268,985 |      |  |   | 268,931 |     
|Assumed exercise of dilutive stock options, restricted stock and
    restricted units |         |      | 4,820   |      |      |   | 4,636   |      |  |   | 7,387   |     
|                                                                                      |         |      |         |      |      |   |         |      | 
|Diluted weighted average common shares outstanding                                    |         |      | 234,209 |      |      |   | 273,621 |      |  |   | 276,318 |     
|                                                                                      |         |      |         |      |      |   |         |      | 
|Earnings per common share:                                                            |         |      |         |      |      |   |         |      |  |   |         |     
|                                                                                      | Basic   |      | $       | 0.80 |      |   | $       | 0.76 |  |   | $       | 1.24 | 
|                                                                                      | Diluted |      | $       | 0.79 |      |   | $       | 0.74 |  |   | $       | 1.21 | 

Stock Options. Accounting for Stock-Based
Compensation, , Accounting for
Stock-Based Compensation-Transition and Disclosure, an amendment
of FASB Statement No. 123 Accounting for Stock Issued to Employees.


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|                                                                                                                                     |                       |      |         |      |      |   |         |      |  |   |         |      | 
|------------------------------------------------------------------------------------------------------------------------------------ | --------------------- | ---- | ------- | ---- | ---- | - | ------- | ---- |  | - | ------- | ---- | 
|Fiscal Year Ended March 31,                                                                                                          |                       | 2006 |         |      | 2005 |   |         | 2004 | 
|                                                                                                                                     |                       |      |         |      |      |   |         |      | 
|(in thousands, except per share data)                                                                                                |                       |      |         |      |      |  
|Net earnings, as reported                                                                                                            |                       | $    | 184,542 |      |      | $ | 203,592 |      |  | $ | 334,609 |     
|Add:    Stock-based compensation expense
    included in reported net earnings, net of related tax effects                           |                       |      | 2,649   |      |      |   | 2,543   |      |  |   | 1,553   |     
|Deduct: Total compensation expense determined under
    fair-value based method for all stock awards, net of related tax
    effects |                       |      | (11,845 | )    |      |   | (14,852 | )    |  |   | (24,674 | )   
|                                                                                                                                     |                       |      |         |      |      |   |         |      | 
|Pro forma net earnings                                                                                                               |                       | $    | 175,346 |      |      | $ | 191,283 |      |  | $ | 311,488 |     
|                                                                                                                                     |                       |      |         |      |      |   |         |      | 
|Earnings per share:                                                                                                                  |                       |      |         |      |      |   |         |      |  |   |         |     
|                                                                                                                                     | Basic  as reported   |      | $       | 0.80 |      |   | $       | 0.76 |  |   | $       | 1.24 | 
|                                                                                                                                     |                       |      |         |      |      |   |         |      | 
|                                                                                                                                     | Basic  pro forma     |      | $       | 0.76 |      |   | $       | 0.71 |  |   | $       | 1.16 | 
|                                                                                                                                     |                       |      |         |      |      |   |         |      | 
|                                                                                                                                     | Diluted  as reported |      | $       | 0.79 |      |   | $       | 0.74 |  |   | $       | 1.21 | 
|                                                                                                                                     |                       |      |         |      |      |   |         |      | 
|                                                                                                                                     | Diluted  pro forma   |      | $       | 0.75 |      |   | $       | 0.70 |  |   | $       | 1.14 | 
|                                                                                                                                     |                       |      |         |      |      |   |         |      | 

Use of Estimates in the Preparation of Financial
Statements.


Reclassification.


Fiscal Year.


Recent Accounting Pronouncements. Share-Based Payment.




|        |              
|------- | -------------
|Note 3. | Restructuring



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|                                             |  |             |        |   |                 |   |         |            |  |   |        |   |  |   |         |  
|-------------------------------------------- |  | ----------- | ------ | - | --------------- | - | ------- | ---------- |  | - | ------ | - |  | - | ------- | -
|                                             |  | Non-Cash    |        |   | Employee        |   |         |            |  |  
|                                             |  | Asset       |        |   | Termination and |   |         | Other      |  |   |       
|                                             |  | Write-downs |        |   | Severance Costs |   |         | Exit Costs |  |   | Total  |  
|(in thousands)                               |  |             |        |   |                 |   |         |            |  |   |        |  
|Accrued restructuring costs  March 31, 2005 |  | $           |       |   |                 | $ |        |            |  | $ |       |   |  | $ |        |  
|Restructuring charge  fiscal 2006           |  |             | 1,636  |   |                 |   | 15,117  |            |  |   | 4,168  |   |  |   | 20,921  |  
|Amounts utilized  fiscal 2006               |  |             | (1,636 | ) |                 |   | (14,603 | )          |  |   | (2,516 | ) |  |   | (18,755 | )
|                                             |  |             |        |   |                 |   |         |            |  |   |        |  
|Accrued restructuring costs  March 31, 2006 |  | $           |       |   |                 | $ | 514     |            |  | $ | 1,652  |   |  | $ | 2,166   |  
|                                             |  |             |        |   |                 |   |         |            |  |   |        |  





|        |                         
|------- | ------------------------
|Note 4. | Balance Sheet Components



|                               |                                            |      |         |         |      |   |         |         | 
|------------------------------ | ------------------------------------------ | ---- | ------- | ------- | ---- | - | ------- | ------- | 
|                               |                                            | 2006 |         |         | 2005 |  
|(in thousands)                 |                                            |      |         |         |      |  
|Inventories:                   |                                            |      |         |         |      |   |         |        
|                               | Raw materials                              |      | $       | 98,259  |      |   | $       | 119,654 | 
|                               | Work in process                            |      |         | 36,073  |      |   |         | 39,589  | 
|                               | Finished goods                             |      |         | 144,676 |      |   |         | 127,024 | 
|                               |                                            |      |         |         |      |  
|                               |                                            | $    | 279,008 |         |      | $ | 286,267 |        
|                               |                                            |      |         |         |      |  
|Property, plant and equipment: |                                            |      |         |         |      |   |         |        
|                               | Land and improvements                      |      | $       | 10,639  |      |   | $       | 9,704   | 
|                               | Buildings and improvements                 |      |         | 175,343 |      |   |         | 161,050 | 
|                               | Machinery and equipment                    |      |         | 287,202 |      |   |         | 269,208 | 
|                               | Construction in progress                   |      |         | 144,429 |      |   |         | 85,324  | 
|                               |                                            |      |         |         |      |  
|                               |                                            |      | 617,613 |         |      |   | 525,286 |        
|Less accumulated depreciation  |                                            |      | 210,738 |         |      |   | 188,567 |        
|                               |                                            |      |         |         |      |  
|                               |                                            | $    | 406,875 |         |      | $ | 336,719 |        
|                               |                                            |      |         |         |      |  
|Other current liabilities:     |                                            |      |         |         |      |   |         |        
|                               | Payroll and employee benefit plan accruals |      | $       | 24,323  |      |   | $       | 21,251  | 
|                               | Accrued rebates                            |      |         | 60,374  |      |   |         | 51,772  | 
|                               | Royalties and product license fees         |      |         | 9,320   |      |   |         | 11,446  | 
|                               | Deferred revenue                           |      |         | 17,225  |      |   |         |        | 
|                               | Legal and professional                     |      |         | 30,074  |      |   |         | 18,148  | 
|                               | Other                                      |      |         | 17,171  |      |   |         | 10,989  | 
|                               |                                            |      |         |         |      |  
|                               |                                            | $    | 158,487 |         |      | $ | 113,606 |        
|                               |                                            |      |         |         |      |  

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|        |                      
|------- | ---------------------
|Note 5. | Marketable Securities



|                  |  |           |         |       |            |   |       |            |  |   |       |  |  |   |         | 
|----------------- |  | --------- | ------- | ----- | ---------- | - | ----- | ---------- |  | - | ----- |  |  | - | ------- | 
|                  |  |           |         | Gross |            |   | Gross |            |  |  
|                  |  | Amortized |         |       | Unrealized |   |       | Unrealized |  |   | Fair  | 
|                  |  | Cost      |         |       | Gains      |   |       | Losses     |  |   | Value | 
|(in thousands)    |  |           |         |       |            |   |       |            |  |   |       | 
|March 31, 2006    |  |           |         |       |            |   |       |            |  |   |       |  |  |   |         | 
|Debt securities   |  | $         | 364,266 |       |            | $ | 79    |            |  | $ | 1,887 |  |  | $ | 362,458 | 
|Equity securities |  |           |        |       |            |   | 5,545 |            |  |   |      |  |  |   | 5,545   | 
|                  |  |           |         |       |            |   |       |            |  |   |       | 
|                  |  | $         | 364,266 |       |            | $ | 5,624 |            |  | $ | 1,887 |  |  | $ | 368,003 | 
|                  |  |           |         |       |            |   |       |            |  |   |       | 
|March 31, 2005    |  |           |         |       |            |   |       |            |  |   |       |  |  |   |         | 
|Debt securities   |  | $         | 669,044 |       |            | $ | 194   |            |  | $ | 2,068 |  |  | $ | 667,170 | 
|Equity securities |  |           |        |       |            |   | 3,178 |            |  |   |      |  |  |   | 3,178   | 
|                  |  |           |         |       |            |   |       |            |  |   |       | 
|                  |  | $         | 669,044 |       |            | $ | 3,372 |            |  | $ | 2,068 |  |  | $ | 670,348 | 
|                  |  |           |         |       |            |   |       |            |  |   |       | 





|                               |  |   |         | 
|------------------------------ |  | - | ------- | 
|(in thousands)                 |  |  
|Mature within one year         |  | $ | 82,447  | 
|Mature in one to five years    |  |   | 35,855  | 
|Mature in five years and later |  |   | 244,156 | 
|                               |  |   |        
|                               |  | $ | 362,458 | 
|                               |  |   |        



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|        |                  
|------- | -----------------
|Note 6. | Intangible Assets



|                                                     |                             |              |  |    |          |   |         |              |  |   |          |        |  |   |         |        | 
|---------------------------------------------------- | --------------------------- | ------------ |  | -- | -------- | - | ------- | ------------ |  | - | -------- | ------ |  | - | ------- | ------ | 
|                                                     |                             | Weighted     |  |    |          |   |         |              | 
|                                                     |                             | Average Life |  |    | Original |   |         | Accumulated  |  |   | Net Book |       
|                                                     |                             | (years)      |  |    | Cost     |   |         | Amortization |  |   | Value    |       
|(in thousands)                                       |                             |              |  |    |          |   |         |              |  |   |          |       
|March 31, 2006                                       |                             |              |  |    |          |   |         |              |  |   |          |        |  |   |         |       
|Amortized intangible assets:                         |                             |              |  |    |          |   |         |              |  |   |          |        |  |   |         |       
|                                                     | Patents and technologies    |              |  | 20 |          |   | $       | 118,935      |  |   | $        | 54,836 |  |   | $       | 64,099 | 
|                                                     | Product rights and licenses |              |  | 12 |          |   |         | 111,135      |  |   |          | 77,444 |  |   |         | 33,691 | 
|                                                     | Other                       |              |  | 20 |          |   |         | 14,267       |  |   |          | 7,245  |  |   |         | 7,022  | 
|                                                     |                             |              |  |    |          |   |         |              |  |   |          |       
|                                                     |                             |              |  |    |          | $ | 244,337 |              |  | $ | 139,525  |        |  |   | 104,812 |       
|                                                     |                             |              |  |    |          |   |         |              |  |   |          |       
|Intangible assets no longer subject to amortization: |                             |              |  |    |          |   |         |              |  |   |          |        |  |   |         |       
|                                                     | Trademarks                  |              |  |    |          |   |         |              |  |   |          |        |  |   |         | 783    | 
|                                                     |                             |              |  |    |          |   |         |              |  |   |          |       
|                                                     |                             |              |  |    |          |   |         |              |  |   |          |        |  | $ | 105,595 |       
|                                                     |                             |              |  |    |          |   |         |              |  |   |          |       
|March 31, 2005                                       |                             |              |  |    |          |   |         |              |  |   |          |        |  |   |         |       
|Amortized intangible assets:                         |                             |              |  |    |          |   |         |              |  |   |          |        |  |   |         |       
|                                                     | Patents and technologies    |              |  | 19 |          |   | $       | 118,935      |  |   | $        | 48,478 |  |   | $       | 70,457 | 
|                                                     | Product rights and licenses |              |  | 12 |          |   |         | 111,433      |  |   |          | 69,923 |  |   |         | 41,510 | 
|                                                     | Other                       |              |  | 20 |          |   |         | 14,267       |  |   |          | 6,524  |  |   |         | 7,743  | 
|                                                     |                             |              |  |    |          |   |         |              |  |   |          |       
|                                                     |                             |              |  |    |          | $ | 244,635 |              |  | $ | 124,925  |        |  |   | 119,710 |       
|                                                     |                             |              |  |    |          |   |         |              |  |   |          |       
|Intangible assets no longer subject to amortization: |                             |              |  |    |          |   |         |              |  |   |          |        |  |   |         |       
|                                                     | Trademarks                  |              |  |    |          |   |         |              |  |   |          |        |  |   |         | 783    | 
|                                                     |                             |              |  |    |          |   |         |              |  |   |          |       
|                                                     |                             |              |  |    |          |   |         |              |  |   |          |        |  | $ | 120,493 |       
|                                                     |                             |              |  |    |          |   |         |              |  |   |          |       







|        |             
|------- | ------------
|Note 7. | Other Assets



|                                        |  |      |        |  |      |   |        | 
|--------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                                        |  | 2006 |        |  | 2005 |  
|                                        |  |      |        |  |      |  
|(in thousands)                          |  |      |        | 
|Cash surrender value                    |  | $    | 40,945 |  |      | $ | 38,965 | 
|Financing fees                          |  |      | 12,813 |  |      |   |       | 
|Investments in and advances to Somerset |  |      | 462    |  |      |   |       | 
|Other                                   |  |      | 9,357  |  |      |   | 8,465  | 
|                                        |  |      |        |  |      |  
|                                        |  | $    | 63,577 |  |      | $ | 47,430 | 
|                                        |  |      |        |  |      |  



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|        |               
|------- | --------------
|Note 8. | Long-Term Debt



|                          |  |           |         |  |           |   |   | 
|------------------------- |  | --------- | ------- |  | --------- | - | - | 
|                          |  | March 31, |         |  | March 31,
|                          |  | 2006      |         |  | 2005     
|                          |  |           |         |  |          
|(in thousands)            |  |           |         | 
|Senior Notes(A)           |  | $         | 500,000 |  |           | $ |  | 
|Senior credit facility(B) |  |           | 187,938 |  |           |   |  | 
|                          |  |           |         |  |           |  
|                          |  |           | 687,938 |  |           |   |  | 
|Less: Current portion     |  |           | 2,750   |  |           |   |  | 
|                          |  |           |         |  |           |  
|Total long-term debt      |  | $         | 685,188 |  |           | $ |  | 
|                          |  |           |         |  |           |  






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) |  | On July 21, 2005, the Company issued $500,000,000 in Senior
    Notes, which consisted of $150,000,000 of Senior Notes due
    August 15, 2010, and bearing interest at
    53/4% per
    annum (the 2010 Restricted Notes) and $350,000,000
    of Senior Notes due August 15, 2015, and bearing interest
    at
    63/8% per annum (the 2015 Restricted Notes,
    and collectively the Restricted Notes). The proceeds
    from the Restricted Notes were used to finance a portion of the
    Dutch Auction self-tender described in Note 11.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    |  | In connection with the completion of the issuance of the
    Restricted Notes, the Company entered into a registration rights
    agreement with the initial purchasers of the Restricted Notes
    (the Registration Rights Agreement), dated
    July 21, 2005. On January 19, 2006, pursuant to its
    obligations under the Registration Rights Agreement, the Company
    consummated an exchange offer of the Restricted Notes for
    $150,000,000 of Senior Notes due August 15, 2010, and
    bearing interest at
    53/4% per
    annum (2010 Notes) and $350,000,000 of Senior Notes
    due August 15, 2015, and bearing interest at
    63/8% per annum (2015 Notes, and
    collectively, the Notes), the issuance of each of
    which has been registered under the Securities Act of 1933, as
    amended. The form and terms of the 2010 Notes and the 2015 Notes
    are identical in all material respects to the 2010 Restricted
    Notes and the 2015 Restricted Notes, respectively, with the
    exception of the transfer restrictions, registration rights and
    additional interest provisions relating to the Restricted Notes
    which do not apply to the Notes. Interest is payable
    semiannually on February 15 and August 15 and commenced on
    February 15, 2006.
|   
|    |  | Prior to maturity, the Company may, under certain circumstances,
    redeem the Notes in whole or in part at prices specified in the
    bond indenture governing the Notes. Upon a change of control (as
    defined in the indenture governing the Notes) of the Company,
    each holder of the Notes may require the Company to purchase all
    or a portion of such holders Notes at 101% of the
    principal amount of such Notes, plus accrued and unpaid interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  | The Notes are senior unsecured obligations of the Company and
    rank junior to all of the Companys secured obligations.
    The Notes are guaranteed jointly and severally on a full and
    unconditional senior unsecured basis by all of the
    Companys wholly owned domestic subsidiaries except a
    captive insurance company, which is considered to be a minor
    subsidiary. Also, the assets and operations of Mylan
    Laboratories Inc. (Mylan Labs), the parent company,
    are not material, and, as such, condensed consolidating
    financial information for the parent and subsidiaries is not
    provided.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    |  | The Notes indenture contains covenants that, among other things,
    limit the ability of the Company to (a) incur additional
    secured indebtedness, (b) make investments or other
    restricted payments, (c) pay dividends on, redeem or
    repurchase the Companys capital stock, (d) engage in
    sale-leaseback transactions and (e) consolidate, merge or
    transfer all or substantially all of its assets. Certain of the
    covenants contained in the indenture will no longer be
    applicable or will be less restrictive if the Company achieves
    investment grade ratings as outlined in the indenture.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(B) |  | On July 21, 2005, the Company entered into a $500,000,000
    senior secured credit facility (the Credit
    Facility). The Credit Facility consists of a $225,000,000
    five-year revolving credit facility (the Revolving Credit
    Facility), which the Company intends to use for working
    capital and general corporate purposes, and a $275,000,000
    five-year term loan (the Term Loan), the proceeds of
    which were used to fund a portion of the Dutch
    Auction self-tender described in Note 11. Loans under
    the Revolving Credit Facility bear interest at a rate equal to
    either LIBOR plus 1.25% per annum or prime plus
    0.25% per annum, at the Companys option, and the Term
    Loan bears interest at a rate equal to LIBOR plus 1.50% per
    annum or prime plus 0.50% per annum also at the
    Companys option.                                                                                                                                                                                                                                           
|   
|    |  | The Term Loan interest rate in effect at March 31, 2006 was
    6.33%. The Company is required to pay a fee on the unused
    portion of the Revolving Credit Facility of 0.50% per
    annum. At March 31, 2006, no borrowings were outstanding
    under the Revolving Credit Facility. The Term Loan will amortize
    at a rate of 1% per year for the first four years, with the
    balance paid in four equal quarterly installments thereafter.
    Subject to exceptions, the Credit Facility has mandatory
    prepayments with respect to certain proceeds of asset sales,
    debt issuances and equity issuances and with respect to the
    Companys excess cash flows. Also, the Term Loan may be
    prepaid without penalty at any time in whole or in part at the
    Companys option. In March 2006, the Company elected to
    make a principal payment of $85,000,000. Because the amount of
    mandatory prepayment may vary from quarter to quarter and cannot
    be reasonably estimated, only the 1% per year amortization
    is included on the balance sheet as a current liability.
|   
|    |  | The Companys obligations under the Credit Facility are
    guaranteed jointly and severally on a full and unconditional
    senior secured basis by all of the Companys wholly owned
    domestic subsidiaries except a captive insurance company, which
    is considered to be a minor subsidiary. The obligations under
    the Credit Facility are also collateralized by a first priority
    lien on, and pledge of, 100% of the equity interests of certain
    of the Companys wholly owned domestic subsidiaries and 65%
    of the equity interests of each of the Companys foreign
    subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | The Credit Facility includes covenants that (a) require the
    Company to maintain a minimum interest coverage ratio and a
    maximum total leverage ratio, (b) place limitations on the
    Companys ability to incur debt; grant liens; carry out
    mergers, acquisitions and asset sales; and make investments and
    (c) place limitations on the Companys ability to pay
    dividends or make other restricted payments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | All financing fees associated with the Notes and the Credit
    Facility are being amortized over the life of the related debt.
    The total unamortized amounts of $12,813,000 are included in
    other assets in the Consolidated Balance Sheet at March 31,
    2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|    |  | At March 31, 2006, the carrying value of the Companys
    long-term debt approximated fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | Principal maturities of the Notes and Credit Facility for the
    next five years and thereafter, as of March 31, 2006, are
    as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

|               |  |   |         | 
|-------------- |  | - | ------- | 
|Fiscal         |  |  
|               |  |  
|(in thousands) | 
|2007           |  | $ | 2,750   | 
|2008           |  |   | 2,750   | 
|2009           |  |   | 2,750   | 
|2010           |  |   | 134,938 | 
|2011           |  |   | 194,750 | 
|Thereafter     |  |   | 350,000 | 
|               |  |   |        
|               |  | $ | 687,938 | 
|               |  |   |        

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|        |                            
|------- | ---------------------------
|Note 9. | Other Long-Term Obligations



|                                               |  |      |        |  |      |   |        | 
|---------------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                                               |  | 2006 |        |  | 2005 |  
|                                               |  |      |        |  |      |  
|(in thousands)                                 |  |      |        | 
|Deferred compensation                          |  | $    | 18,429 |  |      | $ | 17,196 | 
|Retirement benefits                            |  |      | 3,168  |  |      |   | 2,683  | 
|Other                                          |  |      | 2,424  |  |      |   | 1,032  | 
|                                               |  |      |        |  |      |  
|Total long-term obligations                    |  |      | 24,021 |  |      |   | 20,911 | 
|Less: Current portion of long-term obligations |  |      | 1,586  |  |      |   | 1,586  | 
|                                               |  |      |        |  |      |  
|Long-term obligations, net of current portion  |  | $    | 22,435 |  |      | $ | 19,325 | 
|                                               |  |      |        |  |      |  





|         |             
|-------- | ------------
|Note 10. | Income Taxes



|                            |          |      |         |         |      |   |         |         |   |   |         |         | 
|--------------------------- | -------- | ---- | ------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------- | 
|Fiscal Year Ended March 31, |          | 2006 |         |         | 2005 |   |         | 2004    |  
|                            |          |      |         |         |      |   |         |         |  
|(in thousands)              |          |      |         |         |      |  
|Federal:                    |          |      |         |         |      |   |         |         |   |   |         |        
|                            | Current  |      | $       | 104,204 |      |   | $       | 134,994 |   |   | $       | 133,223 | 
|                            | Deferred |      |         | (22,359 | )    |   |         | (34,513 | ) |   |         | 30,549  | 
|                            |          |      |         |         |      |   |         |         |  
|                            |          |      | 81,845  |         |      |   | 100,481 |         |   |   | 163,772 |        
|                            |          |      |         |         |      |   |         |         |  
|State and Puerto Rico:      |          |      |         |         |      |   |         |         |   |   |         |        
|                            | Current  |      |         | 9,494   |      |   |         | 10,560  |   |   |         | 12,501  | 
|                            | Deferred |      |         | (1,276  | )    |   |         | (2,386  | ) |   |         | 1,726   | 
|                            |          |      |         |         |      |   |         |         |  
|                            |          |      | 8,218   |         |      |   | 8,174   |         |   |   | 14,227  |        
|                            |          |      |         |         |      |   |         |         |  
|Income taxes                |          | $    | 90,063  |         |      | $ | 108,655 |         |   | $ | 177,999 |        
|                            |          |      |         |         |      |   |         |         |  
|Pre-tax earnings            |          | $    | 274,605 |         |      | $ | 312,247 |         |   | $ | 512,608 |        
|                            |          |      |         |         |      |   |         |         |  
|Effective tax rate          |          |      | 32.8%   |         |      |   | 34.8    | %       |   |   | 34.7    | %      
|                            |          |      |         |         |      |   |         |         |  

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|                                                   |                                            |                                |         |         |         |   |        |         |         |   |        |        |         | 
|-------------------------------------------------- | ------------------------------------------ | ------------------------------ | ------- | ------- | ------- | - | ------ | ------- | ------- | - | ------ | ------ | ------- | 
|                                                   |                                            | 2006                           |         |         | 2005    |   |        | 2004    |        
|                                                   |                                            |                                |         |         |         |   |        |         |        
|(in thousands)                                     |                                            |                                |         |         |         |  
|Deferred tax assets:                               |                                            |                                |         |         |         |   |        |         |         |   |        |       
|                                                   | Employee benefits                          |                                | $       | 10,948  |         |   | $      | 10,301  |         |   | $      | 9,824  |        
|                                                   | Legal matters                              |                                |         | 4,551   |         |   |        |        |         |   |        |       |        
|                                                   | Intangible assets                          |                                |         | 14,488  |         |   |        | 10,615  |         |   |        | 9,721  |        
|                                                   | Accounts receivable allowances             |                                |         | 121,235 |         |   |        | 113,267 |         |   |        | 75,301 |        
|                                                   | Inventories                                |                                |         | 4,851   |         |   |        | 3,587   |         |   |        | 1,852  |        
|                                                   | Investments                                |                                |         | 6,028   |         |   |        | 6,003   |         |   |        | 8,099  |        
|                                                   | Other                                      |                                |         | 2,783   |         |   |        | 1,117   |         |   |        | 656    |        
|                                                   |                                            |                                |         |         |         |   |        |         |        
|                                                   |                                            | Total deferred tax assets      |         |         | 164,884 |   |        |         | 144,890 |   |        |        | 105,453 | 
|                                                   |                                            |                                |         |         |         |   |        |         |        
|Deferred tax liabilities:                          |                                            |                                |         |         |         |   |        |         |         |   |        |       
|                                                   | Plant and equipment                        |                                |         | 21,168  |         |   |        | 22,848  |         |   |        | 19,271 |        
|                                                   | Intangible assets                          |                                |         | 23,977  |         |   |        | 25,946  |         |   |        | 27,915 |        
|                                                   | Investments                                |                                |         | 2,547   |         |   |        | 1,569   |         |   |        | 2,394  |        
|                                                   | Other                                      |                                |         | 105     |         |   |        | 105     |         |   |        |       |        
|                                                   |                                            |                                |         |         |         |   |        |         |        
|                                                   |                                            | Total deferred tax liabilities |         |         | 47,797  |   |        |         | 50,468  |   |        |        | 49,580  | 
|                                                   |                                            |                                |         |         |         |   |        |         |        
|Deferred tax asset, net                            |                                            | $                              | 117,087 |         |         | $ | 94,422 |         |         | $ | 55,873 |       
|                                                   |                                            |                                |         |         |         |   |        |         |        
|Classification in the Consolidated Balance Sheets: |                                            |                                |         |         |         |   |        |         |         |   |        |       
|                                                   | Deferred income tax benefit  current      |                                | $       | 137,672 |         |   | $      | 119,327 |         |   | $      | 78,477 |        
|                                                   | Deferred income tax liability  noncurrent |                                |         | 20,585  |         |   |        | 24,905  |         |   |        | 22,604 |        
|                                                   |                                            |                                |         |         |         |   |        |         |        
|Deferred tax asset, net                            |                                            | $                              | 117,087 |         |         | $ | 94,422 |         |         | $ | 55,873 |       
|                                                   |                                            |                                |         |         |         |   |        |         |        



|                                       |  |      |      |    |      |  |      |      |  |  |      |   
|-------------------------------------- |  | ---- | ---- | -- | ---- |  | ---- | ---- |  |  | ---- | --
|Fiscal Year Ended March 31,            |  | 2006 |      |    | 2005 |  |      | 2004 | 
|                                       |  |      |      |    |      |  |      |      | 
|(in thousands)                         |  |      |      |    |      | 
|Statutory tax rate                     |  |      | 35.0 | %  |      |  | 35.0 | %    |  |  | 35.0 | % 
|State and Puerto Rico income taxes     |  |      | 4.0  | %  |      |  | 2.8  | %    |  |  | 2.7  | % 
|State and Puerto Rico tax credits      |  |      | (1.5 | %) |      |  | (1.3 | %)   |  |  | (0.7 | %)
|Federal tax credits                    |  |      | (1.0 | %) |      |  | (2.1 | %)   |  |  | (1.8 | %)
|Resolution of prior year tax positions |  |      | (2.7 | %) |      |  |     |      |  |  |     |   
|Other items                            |  |      | (1.0 | %) |      |  | 0.4  | %    |  |  | (0.5 | %)
|                                       |  |      |      |    |      |  |      |      | 
|Effective tax rate                     |  |      | 32.8 | %  |      |  | 34.8 | %    |  |  | 34.7 | % 
|                                       |  |      |      |    |      |  |      |      | 





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|         |                           
|-------- | --------------------------
|Note 11. | Preferred and Common Stock









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|         |                  
|-------- | -----------------
|Note 12. | Stock Option Plan

Mylan Laboratories Inc. 2003 Long-Term Incentive Plan




Mylan Laboratories Inc.
1997 Incentive Stock Option Plan




|                              |                   |                  |            |                  |                |   |       |       | 
|----------------------------- | ----------------- | ---------------- | ---------- | ---------------- | -------------- | - | ----- | ----- | 
|                              |                   |                  |            | Weighted Average |               
|                              |                   | Number of Shares |            |                  | Exercise Price |  
|                              |                   | Under Option     |            |                  | per Share      |  
|                              |                   |                  |            |                  |                |  
|Outstanding at March 31, 2003 |                   |                  | 23,888,481 |                  |                | $ | 13.13 |      
|                              | Options granted   |                  |            | 1,911,951        |                |   |       | 20.08 | 
|                              | Options exercised |                  |            | (2,667,593       | )              |   |       | 10.18 | 
|                              | Options forfeited |                  |            | (302,931         | )              |   |       | 17.12 | 
|                              |                   |                  |            |                  |                |  
|Outstanding at March 31, 2004 |                   |                  | 22,829,908 |                  |                |   | 13.99 |      
|                              |                   |                  |            |                  |                |  
|                              | Options granted   |                  |            | 649,900          |                |   |       | 19.05 | 
|                              | Options exercised |                  |            | (891,092         | )              |   |       | 11.30 | 
|                              | Options forfeited |                  |            | (286,928         | )              |   |       | 19.13 | 
|                              |                   |                  |            |                  |                |  
|Outstanding at March 31, 2005 |                   |                  | 22,301,788 |                  |                |   | 14.17 |      
|                              |                   |                  |            |                  |                |  
|                              | Options granted   |                  |            | 5,780,123        |                |   |       | 17.61 | 
|                              | Options exercised |                  |            | (4,729,113       | )              |   |       | 12.03 | 
|                              | Options forfeited |                  |            | (1,994,128       | )              |   |       | 18.65 | 
|                              |                   |                  |            |                  |                |  
|Outstanding at March 31, 2006 |                   |                  | 21,358,670 |                  |                | $ | 15.16 |      
|                              |                   |                  |            |                  |                |  

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|                   |             |                     |           |  |            |         |                     |  |          |  |  |           |       |  |          |  |            |  |  |   |       | 
|------------------ | ----------- | ------------------- | --------- |  | ---------- | ------- | ------------------- |  | -------- |  |  | --------- | ----- |  | -------- |  | ---------- |  |  | - | ----- | 
|                   |             | Options Outstanding |           |  |            |         | Options Exercisable | 
|                   |             |                     |           |  |            |         |                     | 
|Ranges of Exercise |             |                     | Number    |  |            | Average |                     |  | Average  |  |  | Number    |       |  | Average  | 
|Price per Share    |             |                     | of Shares |  |            | Life(1) |                     |  | Price(2) |  |  | of Shares |       |  | Price(2) | 
|                   |             |                     |           |  |            |         |                     |  |          |  |  |           |       |  |          | 
|$                  | 6.56-$10.97 |                     |           |  | 2,662,396  |         |                     |  | 4.25     |  |  | $         | 10.26 |  |          |  | 2,662,396  |  |  | $ | 10.26 | 
|                   | 10.97-13.19 |                     |           |  | 6,212,368  |         |                     |  | 5.30     |  |  |           | 11.71 |  |          |  | 6,202,806  |  |  |   | 11.71 | 
|                   | 13.19-17.45 |                     |           |  | 1,918,927  |         |                     |  | 6.32     |  |  |           | 14.70 |  |          |  | 1,819,077  |  |  |   | 14.63 | 
|                   | 17.46-17.46 |                     |           |  | 5,239,186  |         |                     |  | 9.34     |  |  |           | 17.46 |  |          |  | 2,298      |  |  |   | 17.46 | 
|                   | 17.72-26.00 |                     |           |  | 5,325,793  |         |                     |  | 7.17     |  |  |           | 19.55 |  |          |  | 2,519,839  |  |  |   | 19.59 | 
|                   |             |                     |           |  |            |         |                     |  |          |  |  |           |       |  |          | 
|$                  | 6.56-$26.00 |                     |           |  | 21,358,670 |         |                     |  | 6.72     |  |  | $         | 15.16 |  |          |  | 13,206,416 |  |  | $ | 13.33 | 
|                   |             |                     |           |  |            |         |                     |  |          |  |  |           |       |  |          | 






|    |                                                      
|--- | -----------------------------------------------------
|(1) | Weighted average contractual life remaining in years.
|   
|(2) | Weighted average exercise price per share.           





|                                       |  |      |      |   |      |   |      |      |  |   |      |  
|-------------------------------------- |  | ---- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|Fiscal Year Ended March 31,            |  | 2006 |      |   | 2005 |   |      | 2004 | 
|                                       |  |      |      |   |      |   |      |      | 
|Volatility                             |  |      | 38.7 | % |      |   | 41.8 | %    |  |   | 41.1 | %
|Risk-free interest rate                |  |      | 4.0  | % |      |   | 3.2  | %    |  |   | 2.7  | %
|Dividend yield                         |  |      | 1.3  | % |      |   | 0.6  | %    |  |   | 0.4  | %
|Expected term of options (in years)    |  |      | 4.5  |   |      |   | 4.2  |      |  |   | 6.5  |  
|Weighted average fair value per option |  | $    | 5.92 |   |      | $ | 6.73 |      |  | $ | 8.51 |  





|         |                  
|-------- | -----------------
|Note 13. | Employee Benefits

,
Employers Accounting for Postretirement Benefits Other
Than Pensions.






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|         |            
|-------- | -----------
|Note 14. | Commitments





|               |  |           |       | 
|-------------- |  | --------- | ----- | 
|               |  | Operating |      
|Fiscal         |  | Leases    |      
|               |  |           |      
|(in thousands) |  |          
|2007           |  | $         | 3,944 | 
|2008           |  |           | 3,273 | 
|2009           |  |           | 1,293 | 
|2010           |  |           | 900   | 
|2011           |  |           | 285   | 
|Thereafter     |  |           | 216   | 
|               |  |           |      
|               |  | $         | 9,911 | 
|               |  |           |      









|         |                   
|-------- | ------------------
|Note 15. | Product Agreements

®




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|         |              
|-------- | -------------
|Note 16. | Contingencies

Legal Proceedings




Omeprazole




Lorazepam and Clorazepate




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Pricing and Medicaid Litigation








Other Litigation




Previously Reported Matters That Have Been Resolved or
Dismissed


Shareholder Litigation




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Paclitaxel




Mirtazapine




Lorazepam and Clorazepate




Zagam®




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Managements Report on Internal Control over Financial
Reporting




Internal Control  Integrated Framework


10-K.


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Report of Independent Registered Public Accounting Firm












Internal Control 
Integrated Framework








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Report of Independent Registered Public Accounting Firm






Internal
Control  Integrated Framework








Internal
Control  Integrated Framework Internal Control  Integrated
Framework










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Mylan Laboratories Inc.





Supplementary Financial Information


Quarterly Financial Data




|                           |         |         |         |       |         |   |         |         |  |   |         |       |  |      |         |       |  |   |           |       | 
|-------------------------- | ------- | ------- | ------- | ----- | ------- | - | ------- | ------- |  | - | ------- | ----- |  | ---- | ------- | ----- |  | - | --------- | ----- | 
|                           |         | 1st     |         |       | 2nd     |   |         | 3rd     |  |   | 4th     |       |  |     
|                           |         | Quarter |         |       | Quarter |   |         | Quarter |  |   | Quarter |       |  | Year |        
|                           |         |         |         |       |         |   |         |         |  |   |         |       |  |      |        
|Fiscal 2006                |         |         |         |       |         |   |         |         |  |   |         |       |  |      |         |       |  |   |           |      
|Total revenues             |         | $       | 323,378 |       |         | $ | 297,994 |         |  | $ | 311,246 |       |  | $    | 324,546 |       |  | $ | 1,257,164 |      
|Gross profit               |         |         | 167,834 |       |         |   | 143,231 |         |  |   | 155,797 |       |  |      | 160,754 |       |  |   | 627,616   |      
|Net earnings               |         |         | 42,915  |       |         |   | 35,770  |         |  |   | 48,207  |       |  |      | 57,650  |       |  |   | 184,542   |      
|Earnings per
    share(1): |         |         |         |       |         |   |         |         |  |   |         |       |  |      |         |       |  |   |           |      
|                           | Basic   |         | $       | 0.16  |         |   | $       | 0.16    |  |   | $       | 0.23  |  |      | $       | 0.27  |  |   | $         | 0.80  | 
|                           | Diluted |         | $       | 0.16  |         |   | $       | 0.16    |  |   | $       | 0.22  |  |      | $       | 0.27  |  |   | $         | 0.79  | 
|Share
    prices(2):       |         |         |         |       |         |   |         |         |  |   |         |       |  |      |         |       |  |   |           |      
|                           | High    |         | $       | 19.85 |         |   | $       | 19.84   |  |   | $       | 21.61 |  |      | $       | 24.92 |  |   | $         | 24.92 | 
|                           | Low     |         | $       | 15.50 |         |   | $       | 17.36   |  |   | $       | 19.00 |  |      | $       | 19.30 |  |   | $         | 15.50 | 
|Fiscal 2005                |         |         |         |       |         |   |         |         |  |   |         |       |  |      |         |       |  |   |           |      
|Total revenues             |         | $       | 339,012 |       |         | $ | 306,955 |         |  | $ | 290,972 |       |  | $    | 316,435 |       |  | $ | 1,253,374 |      
|Gross profit               |         |         | 179,753 |       |         |   | 155,253 |         |  |   | 135,347 |       |  |      | 153,187 |       |  |   | 623,540   |      
|Net earnings               |         |         | 82,033  |       |         |   | 48,654  |         |  |   | 34,770  |       |  |      | 38,135  |       |  |   | 203,592   |      
|Earnings per
    share(1): |         |         |         |       |         |   |         |         |  |   |         |       |  |      |         |       |  |   |           |      
|                           | Basic   |         | $       | 0.31  |         |   | $       | 0.18    |  |   | $       | 0.13  |  |      | $       | 0.14  |  |   | $         | 0.76  | 
|                           | Diluted |         | $       | 0.30  |         |   | $       | 0.18    |  |   | $       | 0.13  |  |      | $       | 0.14  |  |   | $         | 0.74  | 
|Share
    prices(2):       |         |         |         |       |         |   |         |         |  |   |         |       |  |      |         |       |  |   |           |      
|                           | High    |         | $       | 24.59 |         |   | $       | 20.48   |  |   | $       | 18.88 |  |      | $       | 18.08 |  |   | $         | 24.59 | 
|                           | Low     |         | $       | 20.15 |         |   | $       | 14.69   |  |   | $       | 16.42 |  |      | $       | 15.88 |  |   | $         | 14.69 | 






|    |                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The sum of earnings per share for the four quarters may not
    equal earnings per share for the total year due to changes in
    the average number of common shares outstanding.
|   
|(2) | Closing prices as reported on the New York Stock Exchange (NYSE).                                                                                                                 




ITEM 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure







ITEM 9A. Controls and Procedures








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ITEM 9B. Other Information







PART III





ITEM 10. Directors and Executive Officers of the
Registrant




Code of Ethics







ITEM 11. Executive Compensation









|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|ITEM 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters






ITEM 13. Certain Relationships and Related
Transactions







ITEM 14. Principal Accounting Fees and Services







PART IV





ITEM 15. Exhibits and Financial Statement Schedules


Consolidated Financial Statements




67



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##### Table of Contents



Financial Statement Schedules


MYLAN LABORATORIES INC.


SCHEDULE II  VALUATION AND QUALIFYING
ACCOUNTS




|                                 |                |           |   |                      |                  |  |   |            |  |        |         |       |  |  |   |        | 
|-------------------------------- | -------------- | --------- | - | -------------------- | ---------------- |  | - | ---------- |  | ------ | ------- | ----- |  |  | - | ------ | 
|                                 |                |           |   | Additions/Deductions |                  |  |   |            | 
|                                 |                | Beginning |   |                      | Charged to Costs |  |   |            |  | Ending |        
|Description                      |                | Balance   |   |                      | and Expenses     |  |   | Deductions |  |        | Balance |      
|                                 |                |           |   |                      |                  |  |   |            |  |        |         |      
|Allowance for doubtful accounts: |                |           |   |                      |                  |  |   |            |  |        |         |       |  |  |   |       
|Fiscal year ended                |                |           |   |                      |                  |  |   |            |  |        |         |       |  |  |   |       
|                                 | March 31, 2006 |           | $ | 7,340                |                  |  | $ | 3,614      |  |        | $       |      |  |  | $ | 10,954 | 
|                                 | March 31, 2005 |           | $ | 5,965                |                  |  | $ | 2,007      |  |        | $       | 632   |  |  | $ | 7,340  | 
|                                 | March 31, 2004 |           | $ | 8,438                |                  |  | $ | 2,325      |  |        | $       | 4,798 |  |  | $ | 5,965  | 

Exhibits


|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1    |  | Amended and Restated Articles of Incorporation of the
    registrant, as amended, filed as Exhibit 3.1 to
    Form 10-Q for the quarter ended June 30, 2003, and
    incorporated herein by reference.                                                                                                                                                                                                                                                                                     
|3.2    |  | Amended and Restated By-laws of the registrant, as amended to
    date, filed as Exhibit 3.1 to the Report on Form 8-K
    filed with the SEC on February 22, 2005, and incorporated
    herein by reference.                                                                                                                                                                                                                                                                              
|4.1(a) |  | Rights Agreement dated as of August 22, 1996, between the
    registrant and American Stock Transfer & Trust Company,
    filed as Exhibit 4.1 to Form 8-K filed with the SEC on
    September 3, 1996, and incorporated herein by reference.                                                                                                                                                                                                                                              
|4.1(b) |  | Amendment to Rights Agreement dated as of November 8, 1999,
    between the registrant and American Stock Transfer &
    Trust Company, filed as Exhibit 1 to Form 8-A/A, filed
    with the SEC on March 31, 2000, and incorporated herein by
    reference.                                                                                                                                                                                                                              
|4.1(c) |  | Amendment No. 2 to Rights Agreement dated as of
    August 13, 2004, between the registrant and American Stock
    Transfer & Trust Company, filed as Exhibit 4.1 to
    the Report on Form 8-K filed with the SEC on
    August 16, 2004, and incorporated herein by reference.                                                                                                                                                                                                           
|4.1(d) |  | Amendment No. 3 to Rights Agreement dated as of
    September 8, 2004, between the registrant and American
    Stock Transfer & Trust Company, filed as
    Exhibit 4.1 to the Report on Form 8-K filed with the
    SEC on September 9, 2004, and incorporated herein by
    reference.                                                                                                                                                                                                   
|4.1(e) |  | Amendment No. 4 to Rights Agreement dated as of
    December 2, 2004, between the registrant and American Stock
    Transfer & Trust Company, filed as Exhibit 4.1 to
    the Report on Form 8-K filed with the SEC on
    December 3, 2004, and incorporated herein by reference.                                                                                                                                                                                                         
|4.1(f) |  | Amendment No. 5 to Rights Agreement dated as of
    December 19, 2005, between the registrant and American
    Stock Transfer & Trust Company, filed as
    Exhibit 4.1 to the Report on Form 8-K filed with the
    SEC on December 19, 2005, and incorporated herein by
    reference.                                                                                                                                                                                                   
|4.2    |  | Indenture, dated as of July 21, 2005, between the
    registrant and The Bank of New York, as trustee, as filed as
    Exhibit 4.1 to the Report on Form 8-K filed with the
    SEC on July 27, 2005, and incorporated herein by reference.                                                                                                                                                                                                                                                
|4.3    |  | Registration Rights Agreement, dated as of July 21, 2005,
    among the registrant, the Guarantors party thereto and Merrill
    Lynch, Pierce, Fenner and Smith Incorporated, BNY Capital
    Markets, Inc., KeyBanc Capital Markets (a Division of McDonald
    Investments Inc.), PNC Capital Markets, Inc. and SunTrust
    Capital Markets, Inc., as filed as Exhibit 4.2 to the
    Report on Form 8-K filed with the SEC on July 27,
    2005, and incorporated herein by reference.
|10.1   |  | Mylan Laboratories Inc. 1986 Incentive Stock Option Plan, as
    amended to date, filed as Exhibit 10(b) to Form 10-K
    for the fiscal year ended March 31, 1993, and incorporated
    herein by reference.*                                                                                                                                                                                                                                                                             

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|         |  |                                                                                                                                                                                                                                                                                             
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2     |  | Mylan Laboratories Inc. 1997 Incentive Stock Option Plan, as
    amended to date, filed as Exhibit 10.3 to Form 10-Q
    for the quarter ended September 30, 2002, and incorporated
    herein by reference.*                                                                               
|10.3     |  | Mylan Laboratories Inc. 1992 Nonemployee Director Stock Option
    Plan, as amended to date, filed as Exhibit 10(l) to
    Form 10-K for the fiscal year ended March 31, 1998,
    and incorporated herein by reference.*                                                                   
|10.4(a)  |  | Mylan Laboratories Inc. 2003 Long-Term Incentive Plan, filed as
    Appendix A to Definitive Proxy Statement on Schedule 14A, filed
    with the SEC on June 23, 2003, and incorporated herein by
    reference.*                                                                           
|10.4(b)  |  | Form of Stock Option Agreement under the Mylan Laboratories Inc.
    2003 Long-Term Incentive Plan, filed as Exhibit 10.4(b) to
    Form 10-K for the fiscal year ended March 31, 2005,
    and incorporated herein by reference.*                                                          
|10.4(c)  |  | Form of Restricted Share Award under the Mylan Laboratories Inc.
    2003 Long-Term Incentive Plan, filed as Exhibit 10.4(c) to
    Form 10-K for the fiscal year ended March 31, 2005,
    and incorporated herein by reference.*                                                          
|10.4(d)  |  | Amendment No. 1 to Mylan Laboratories Inc. 2003 Long-Term
    Incentive Plan.*                                                                                                                                                                                                              
|10.4(e)  |  | Amendment No. 2 to Mylan Laboratories Inc. 2003 Long-Term
    Incentive Plan.*                                                                                                                                                                                                              
|10.5     |  | Amended and Restated Executive Employment Agreement dated as of
    April 3, 2006, between the registrant and Robert J. Coury.*                                                                                                                                                             
|10.6(a)  |  | Executive Employment Agreement dated as of July 1, 2004,
    between the registrant and Edward J. Borkowski, filed as
    Exhibit 10.27 to Form 10-Q/A for the quarter ended
    September 30, 2004, and incorporated herein by reference.*                                                 
|10.6(b)  |  | Amendment No. 1 to Executive Employment Agreement dated as
    of April 3, 2006, between the registrant and Edward J.
    Borkowski.*                                                                                                                                                       
|10.7(a)  |  | Executive Employment Agreement dated as of July 1, 2004,
    between the registrant and Louis J. DeBone, filed as
    Exhibit 10.28 to Form 10-Q/A for the quarter ended
    September 30, 2004, and incorporated herein by reference.*                                                     
|10.7(b)  |  | Amendment No. 1 to Executive Employment Agreement dated as
    of April 3, 2006, between the registrant and Louis J.
    DeBone.*                                                                                                                                                           
|10.8(a)  |  | Executive Employment Agreement dated as of July 1, 2004,
    between the registrant and John P. ODonnell, filed as
    Exhibit 10.29 to Form 8-K, filed with the SEC on
    December 3, 2004, and incorporated herein by reference.*                                                       
|10.8(b)  |  | Amendment No. 1 to Executive Employment Agreement dated as
    of April 3, 2006, between the registrant and John P.
    ODonnell.*                                                                                                                                                         
|10.9(a)  |  | Executive Employment Agreement dated as of July 1, 2004,
    between the registrant and Stuart A. Williams, filed as
    Exhibit 10.30 to Form 10-Q/A for the quarter ended
    September 30, 2004, and incorporated herein by reference.*                                                  
|10.9(b)  |  | Amendment No. 1 to Executive Employment Agreement dated as
    of April 3, 2006, between the registrant and Stuart A.
    Williams.*                                                                                                                                                        
|10.10(a) |  | Form of Employment Agreement dated as of December 15, 2003,
    between the registrant and certain executive officers (other
    than named executive officers), filed as Exhibit 10.18 to
    Form 10-Q for the quarter ended December 31, 2003, and
    incorporated herein by reference.*
|10.10(b) |  | Form of Amendment No. 1 to Executive Employment Agreement
    dated as of March 31, 2006, between the registrant and
    certain executive officers (other than named executive
    officers).*                                                                                             
|10.11(a) |  | Retirement Benefit Agreement dated as of December 31, 2004,
    between the registrant and Robert J. Coury filed as
    Exhibit 10.7 to Form 10-Q for the quarter ended
    December 31, 2004, and incorporated herein by reference.*                                                       
|10.11(b) |  | Amendment No. 1 to Retirement Benefit Agreement dated as of
    April 3, 2006, between the registrant and Robert J. Coury.*                                                                                                                                                                 
|10.12(a) |  | Retirement Benefit Agreement dated as of December 31, 2004,
    between the registrant and Edward J. Borkowski, filed as
    Exhibit 10.8 to Form 10-Q for the quarter ended
    December 31, 2004, and incorporated herein by reference.*                                                  

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|         |  |                                                                                                                                                                                                                                                                        
|-------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.12(b) |  | Amendment No. 1 to Retirement Benefit Agreement dated as of
    April 3, 2006, between the registrant and Edward J.
    Borkowski.*                                                                                                                                    
|10.13(a) |  | Retirement Benefit Agreement dated as of December 31, 2004,
    between the registrant and Stuart A. Williams, filed as
    Exhibit 10.9 to Form 10-Q for the quarter ended
    December 31, 2004, and incorporated herein by reference.*                              
|10.13(b) |  | Amendment No. 1 to Retirement Benefit Agreement dated as of
    April 3, 2006, between the registrant and Stuart A.
    Williams.*                                                                                                                                     
|10.14(a) |  | Amended and Restated Retirement Benefit Agreement dated as of
    December 31, 2004, between the registrant and Louis J.
    DeBone, filed as Exhibit 10.10 to Form 10-Q for the
    quarter ended December 31, 2004, and incorporated herein by
    reference.*       
|10.14(b) |  | Amendment No. 1 to Amended and Restated Retirement Benefit
    Agreement dated as of April 3, 2006, between the registrant
    and Louis J. DeBone.*                                                                                                                   
|10.15(a) |  | Amended and Restated Retirement Benefit Agreement dated as of
    December 31, 2004, between the registrant and John P.
    ODonnell, filed as Exhibit 10.11 to Form 10-Q
    for the quarter ended December 31, 2004, and incorporated
    herein by reference.*     
|10.15(b) |  | Amendment No. 1 to Amended and Restated Retirement Benefit
    Agreement dated as of April 3, 2006, between the registrant
    and John P. ODonnell.*                                                                                                                 
|10.16    |  | Retirement Benefit Agreement dated January 27, 1995,
    between the registrant and C.B. Todd, filed as
    Exhibit 10(b) to Form 10-K for the fiscal year ended
    March 31, 1995, and incorporated herein by reference.*                                            
|10.17(a) |  | Retirement Benefit Agreement dated January 27, 1995,
    between the registrant and Milan Puskar, filed as
    Exhibit 10(b) to Form 10-K for the fiscal year ended
    March 31, 1995, and incorporated herein by reference.*                                         
|10.17(b) |  | First Amendment to Retirement Benefit Agreement dated
    September 27, 2001, between the registrant and Milan
    Puskar, filed as Exhibit 10.1 to Form 10-Q for the
    quarter ended September 30, 2001, and incorporated herein
    by reference.*                 
|10.18    |  | Split Dollar Life Insurance Arrangement between the registrant
    and the Milan Puskar Irrevocable Trust filed as
    Exhibit 10(h) to Form 10-K for the fiscal year ended
    March 31, 1996, and incorporated herein by reference.*                                 
|10.19(a) |  | Transition and Succession Agreement dated as of
    December 15, 2003, between the registrant and Robert J.
    Coury, filed as Exhibit 10.19 to Form 10-Q for the
    quarter ended December 31, 2003, and incorporated herein by
    reference.*                     
|10.19(b) |  | Amendment No. 1 to Transition and Succession Agreement
    dated as of December 2, 2004, between the registrant and
    Robert J. Coury, filed as Exhibit 10.1 to Form 10-Q
    for the quarter ended December 31, 2004, and incorporated
    herein by reference.*    
|10.19(c) |  | Amendment No. 2 to Transition and Succession Agreement
    dated as of April 3, 2006, between the registrant and
    Robert J. Coury.*                                                                                                                                 
|10.20(a) |  | Transition and Succession Agreement dated as of
    December 15, 2003, between the registrant and Edward J.
    Borkowski, filed as Exhibit 10.20 to Form 10-Q for the
    quarter ended December 31, 2003, and incorporated herein by
    reference.*                 
|10.20(b) |  | Amendment No. 1 to Transition and Succession Agreement
    dated as of December 2, 2004, between the registrant and
    Edward J. Borkowski, filed as Exhibit 10.2 to
    Form 10-Q for the quarter ended December 31, 2004, and
    incorporated herein by reference.*
|10.20(c) |  | Amendment No. 2 to Transition and Succession Agreement
    dated as of April 3, 2006, between the registrant and
    Edward J. Borkowski.*                                                                                                                             
|10.21(a) |  | Transition and Succession Agreement dated as of
    December 15, 2003, between the registrant and Louis J.
    DeBone, filed as Exhibit 10.21 to Form 10-Q for the
    quarter ended December 31, 2003, and incorporated herein by
    reference.*                     
|10.21(b) |  | Amendment No. 1 to Transition and Succession Agreement
    dated as of December 2, 2004, between the registrant and
    Louis J. DeBone, filed as Exhibit 10.3 to Form 10-Q
    for the quarter ended December 31, 2003, and incorporated
    herein by reference.*    

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|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.21(c) |  | Amendment No. 2 to Transition and Succession Agreement
    dated as of April 3, 2006, between the registrant and Louis
    J. DeBone.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.22(a) |  | Transition and Succession Agreement dated as of
    December 15, 2003, between the registrant and John P.
    ODonnell, filed as Exhibit 10.22 to Form 10-Q
    for the quarter ended December 31, 2003, and incorporated
    herein by reference.*                                                                                                                                                                                                                                                                                                                                                                     
|10.22(b) |  | Amendment No. 1 to Transition and Succession Agreement
    dated as of December 2, 2004, between the registrant and
    John P. ODonnell, filed as Exhibit 10.5 to
    Form 10-Q for the quarter ended December 31, 2004, and
    incorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                    
|10.22(c) |  | Amendment No. 2 to Transition and Succession Agreement
    dated as of April 3, 2006, between the registrant and John
    P. ODonnell.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|10.23    |  | Amended and Restated Transition and Succession Agreement dated
    as of April 3, 2006, between the registrant and Stuart A.
    Williams.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10.24(a) |  | Form of Transition and Succession Agreement dated as of
    December 15, 2003, with certain executive officers (other
    than named executive officers), filed as Exhibit 10.24 to
    Form 10-Q for the quarter ended December 31, 2003, and
    incorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                    
|10.24(b) |  | Form of Amendment No. 1 to Transition and Succession
    Agreement dated as of March 31, 2006, with certain
    executive officers (other than named executive officers).*                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.25    |  | Executives Retirement Savings Plan, filed as
    Exhibit 10.14 to Form 10-K for the fiscal year ended
    March 31, 2001, and incorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.26    |  | Supplemental Health Insurance Program For Certain Officers of
    Mylan Laboratories Inc., effective December 15, 2001, filed
    as Exhibit 10.1 to Form 10-Q for the quarter ended
    December 31, 2001, and incorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                                       
|10.27    |  | Mylan Laboratories Inc. Severance Plan, filed as
    Exhibit 10.12 to Form 10-Q for the quarter ended
    December 31, 2004, and incorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.28    |  | Form of Indemnification Agreement between the registrant and
    each Director, filed as Exhibit 10.31 to Form 10-Q/A
    for the quarter ended September 30, 2004, and incorporated
    herein by reference.*                                                                                                                                                                                                                                                                                                                                                                                                           
|10.29    |  | Description of the registrants Director Compensation
    Arrangements in effect as of February 9, 2005, filed as
    Exhibit 10.13 to Form 10-Q for the quarter ended
    December 31, 2004, and incorporated herein by reference.*                                                                                                                                                                                                                                                                                                                                                                                     
|10.30    |  | Credit Agreement, dated as of July 21, 2005, among the
    registrant and a syndicate of bank lenders, including Merrill
    Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith
    Incorporated, as sole lead arranger, sole bookrunner and
    syndication agent, Keybank National Association, PNC Bank,
    National Association, Suntrust Bank and The Bank of New York, as
    co-documentation agents, and Merrill Lynch Capital Corporation,
    as administrative agent, as filed as Exhibit 99.1 to the
    Report on Form 8-K filed with the SEC on July 27,
    2005, and incorporated herein by reference.
|21       |  | Subsidiaries of the registrant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|23       |  | Consent of Independent Registered Public Accounting Firm.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|31.1     |  | Certification of CEO pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|31.2     |  | Certification of CFO pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|32       |  | Certifications of CEO and CFO pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             






|  |                                                                 
|- | ----------------------------------------------------------------
|* | Denotes management contract or compensatory plan or arrangement.

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SIGNATURES






| |                        
| | -----------------------
| | Mylan Laboratories Inc.



| |    |                    
| | -- | -------------------
| | by | /s/ ROBERT J. COURY

| |                        
| | -----------------------
| |                        
| | Robert J. Coury        
| | Vice Chairman and      
| | Chief Executive Officer



|                                                                   |  |                                                                                  |  | 
|------------------------------------------------------------------ |  | -------------------------------------------------------------------------------- |  | 
|Signature                                                          |  | Title                                                                           
|                                                                   |  |                                                                                 
|                                                                  
|/s/ ROBERT J. COURYRobert
    J. Coury                             |  | Vice Chairman, Chief Executive Officer and Director(Principal Executive Officer)
|                                                                  
|/s/ EDWARD J. BORKOWSKIEdward
    J. Borkowski                     |  | Chief Financial Officer(Principal Financial Officer)                            
|                                                                  
|/s/ GARY E. SPHARGary
    E. Sphar                                 |  | V.P.  Corporate Controller(Principal Accounting Officer)                       
|                                                                  
|/s/ MILAN PUSKARMilan
    Puskar                                   |  | Chairman and Director                                                           
|                                                                  
|/s/ WENDY CAMERONWendy
    Cameron                                 |  | Director                                                                        
|                                                                  
|/s/ NEIL DIMICKNeil
    Dimick                                     |  | Director                                                                        
|                                                                  
|/s/ DOUGLAS J. LEECHDouglas
    J. Leech                           |  | Director                                                                        
|                                                                  
|/s/ JOSEPH C. MAROON, M.D.Joseph
    C. Maroon, M.D.               |  | Director                                                                        
|                                                                  
|/s/ ROD PIATTRod
    Piatt                                         |  | Director                                                                        
|                                                                  
|/s/ C.B. TODDC.B.
    Todd                                         |  | Director                                                                        
|                                                                  
|/s/ R.L. VANDERVEEN, PH.D., R.PH.R.L.
    Vanderveen, Ph.D., R.Ph. |  | Director                                                                        

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EXHIBIT INDEX


| |          |  |  |                                                                                                                                                                                                
| | -------- |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.4(d)  |  |  | Amendment No. 1 to Mylan Laboratories Inc. 2003 Long-Term
    Incentive Plan.*                                                                                                                 
| | 10.4(e)  |  |  | Amendment No. 2 to Mylan Laboratories Inc. 2003 Long-Term
    Incentive Plan.*                                                                                                                 
| | 10.5     |  |  | Amended and Restated Executive Employment Agreement dated as of
    April 3, 2006, between the registrant and Robert J. Coury.*                                                                
| | 10.6(b)  |  |  | Amendment No. 1 to Executive Employment Agreement dated as
    of April 3, 2006, between the registrant and Edward J.
    Borkowski.*                                                          
| | 10.7(b)  |  |  | Amendment No. 1 to Executive Employment Agreement dated as
    of April 3, 2006, between the registrant and Louis J.
    DeBone.*                                                              
| | 10.8(b)  |  |  | Amendment No. 1 to Executive Employment Agreement dated as
    of April 3, 2006, between the registrant and John P.
    ODonnell.*                                                            
| | 10.9(b)  |  |  | Amendment No. 1 to Executive Employment Agreement dated as
    of April 3, 2006, between the registrant and Stuart A.
    Williams.*                                                           
| | 10.10(b) |  |  | Form of Amendment No. 1 to Executive Employment Agreement
    dated as of March 31, 2006, between the registrant and
    certain executive officers (other than named executive
    officers).*
| | 10.11(b) |  |  | Amendment No. 1 to Retirement Benefit Agreement dated as of
    April 3, 2006, between the registrant and Robert J. Coury.*                                                                    
| | 10.12(b) |  |  | Amendment No. 1 to Retirement Benefit Agreement dated as of
    April 3, 2006, between the registrant and Edward J.
    Borkowski.*                                                            
| | 10.13(b) |  |  | Amendment No. 1 to Retirement Benefit Agreement dated as of
    April 3, 2006, between the registrant and Stuart A.
    Williams.*                                                             
| | 10.14(b) |  |  | Amendment No. 1 to Amended and Restated Retirement Benefit
    Agreement dated as of April 3, 2006, between the registrant
    and Louis J. DeBone.*                                           
| | 10.15(b) |  |  | Amendment No. 1 to Amended and Restated Retirement Benefit
    Agreement dated as of April 3, 2006, between the registrant
    and John P. ODonnell.*                                         
| | 10.19(c) |  |  | Amendment No. 2 to Transition and Succession Agreement
    dated as of April 3, 2006, between the registrant and
    Robert J. Coury.*                                                         
| | 10.20(c) |  |  | Amendment No. 2 to Transition and Succession Agreement
    dated as of April 3, 2006, between the registrant and
    Edward J. Borkowski.*                                                     
| | 10.21(c) |  |  | Amendment No. 2 to Transition and Succession Agreement
    dated as of April 3, 2006, between the registrant and Louis
    J. DeBone.*                                                         
| | 10.22(c) |  |  | Amendment No. 2 to Transition and Succession Agreement
    dated as of April 3, 2006, between the registrant and John
    P. ODonnell.*                                                       
| | 10.23    |  |  | Amended and Restated Transition and Succession Agreement dated
    as of April 3, 2006, between the registrant and Stuart A.
    Williams.*                                                    
| | 10.24(b) |  |  | Form of Amendment No. 1 to Transition and Succession
    Agreement dated as of March 31, 2006, with certain
    executive officers (other than named executive officers).*                     
| | 21       |  |  | Subsidiaries of the registrant.                                                                                                                                                                
| | 23       |  |  | Consent of Independent Registered Public Accounting Firm.                                                                                                                                      
| | 31.1     |  |  | Certification of CEO pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.                                                                                                            
| | 31.2     |  |  | Certification of CFO pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.                                                                                                            
| | 32       |  |  | Certifications of CEO and CFO pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                                                                   






|  |                                                                 
|- | ----------------------------------------------------------------
|* | Denotes management contract or compensatory plan or arrangement.

73