Sales in the fourth quarter increased 21% compared to 1999;
gross margin improved from $3,830,000 to $7,502,000; 32% of sales.

Spring Valley, New York, March 19, 2001 — Pharmaceutical Resources, Inc. (the "Company" or "PRI") (NYSE:PRX) a developer, manufacturer and distributor of generic pharmaceuticals, today announced results for the fourth quarter and fiscal year ended December 31, 2000.

The Company reported net income for the fourth quarter of 2000, reflecting continued sales and gross margin growth, primarily from new products introduced during the year. Net sales of $23,733,000 for the quarter increased $4,110,000, or 21%, from $19,623,000 for the comparable quarter of last year. The gross margin for the most recent quarter increased to $7,502,000 (32% of net sales) from $3,830,000 (20% of net sales) for the fourth quarter of 1999. Fourth quarter research and development expenses of $2,300,000 increased $1,050,000, primarily due to bio-study activity and developmental material costs, from the comparable quarter of 1999. Selling general and administrative costs of $4,370,000 for the most recent quarter increased $911,000 from the prior year, primarily due to higher legal costs related to several patent infringement actions connected with generic drug filings at the FDA. The additional margin contribution of $3,672,000 more than offset the higher legal costs and increased investment in research and development. Net income in the fourth quarter of 2000, which included additional interest expense due to higher levels of short-term debt, was $576,000, or $.02 per share, compared to a net loss of ($755,000), or ($.03) per share, in the comparable period of 1999.

Net sales of $85,022,000 for fiscal year 2000 continued to grow from the introduction of new products, increasing $4,707,000 from net sales of $80,315,000 for fiscal year 1999. Gross margins of $22,690,000 in 2000 improved to 27% of net sales from $16,175,000, or 20% of net sales, in 1999, as higher margin contributions from new products more than offset lower contributions from older or discontinued products. In fiscal year 2000, spending for research and development of $7,634,000 and selling, general and administrative expenses of $15,575,000 increased $1,629,000 and $2,788,000, respectively, primarily due to bio-study activity and increased personnel, R & D material and legal costs. The improved margins more than offset these additional costs, further reducing operating losses to ($519,000) in the most recent year from ($2,617,000) in 1999. The net loss in fiscal year 2000, which also included additional interest expense due to higher levels of short-term debt and lower reimbursements of product development expenses from strategic partners, was reduced to ($929,000), or ($.03) per share, from ($1,774,000), or ($.06) per share, in the same period for the prior year.

Kenneth I. Sawyer, the Chairman and CEO of PRI commented, "The Company is reporting its third consecutive profitable quarter, despite higher spending on research and development and patent litigations, both of which are essential to attaining our goals of growth and profitability. As a result of the Company's research and development program, there are currently 19 ANDAs, filed by either the Company or one of its strategic partners, for potential products awaiting FDA approval. We believe up to nine of these products could be approved by the FDA and introduced to market by the Company during fiscal year 2001. As previously announced, these filings include ANDAs for megestrol acetate oral suspension (Megace Oral Suspension®), flecainide acetate tablets (Tambocor®), fluoxetine tablets (Prozac®) and buspirone 7.5mg. tablets (BuSpar®) that we believe are first-to-file opportunities and, based upon current legislation, could entitle the Company up to 180 days of marketing exclusivity for the products upon FDA approval. In addition, we currently own the rights to several pharmaceutical chemical processes used in the development of generic drugs." Mr. Sawyer continued, "In fiscal year 2001, we will continue to focus on expanding our product pipeline though strategic alliances and product development, identifying additional first-to-file opportunities and developing unique dosage forms and strengths to differentiate our products in the marketplace."

PRI is a holding company with subsidiaries that develop, manufacture, and distribute generic pharmaceutical products. For press release and other Company information, visit our website at http://www.parpharm.com.

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including those concerning management's expectations with respect to future events or future financial performance. Any such statements that refer to PRI's anticipated future results, product performance, or other non-historical facts are forward-looking and reflect PRI's current perspective of existing trends and information. These statements involve risks and uncertainties that cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the uncertainty associated with complex litigation, including the eventual outcome and litigation costs and expenses incurred along the way, the success of PRI's product development activities, and the timeliness with which regulatory authorizations and product introductions may be achieved, market acceptance of PRI's products, the availability of raw materials on commercially reasonable terms, successful compliance with extensive, costly, complex, and evolving governmental regulations and restrictions, exposure to product liability, and other risks and uncertainties detailed in PRI's filings with the Securities and Exchange Commission, such as the Company's Form 10-K, Form 10-Q, and Form 8-K reports.

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