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INVENTORIES

6 Months Ended

Jun. 30, 2011

9. INVENTORIES

The components of inventories as of June 30, 2011 and December 31, 2010 were as follows:

	As of June 30 2011			As of December 31 2010

Raw materials	$	57,121		$	55,486
Work in process		38,168			43,587
Finished goods		183,593			158,574

		278,882			257,647
Less allowance for obsolescence		(19,099	)		(28,065	)

	$	259,783		$	229,582

In the three-month and six-month periods ended June 30, 2011, cost of goods sold included $16.3 million and $46.2 million, respectively, primarily related to the acquisition accounting adjustments on the acquired Valeant and PharmaSwiss inventories that were sold in those respective periods. As of June 30, 2011, substantially all of the acquisition accounting adjustments related to the Valeant and PharmaSwiss inventories had been recognized in cost of goods sold.

The decline in the allowance for obsolescence in the six-month period ended June 30, 2011 primarily reflected the write off of obsolete inventory against the allowance.

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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