Prospectus Supplement, filed
                              pursuant to Rule 424(b)(3) under the
                                     Securities Act of 1933, to
                             Registration Statement on Form S-1
                                            (File No. 333-3665)

              Supplement, dated November 1, 1996,
              Prospectus, dated October 16, 1996,
                  Halsey Drug Co., Inc., Inc.

     The following is inserted as the third paragraph on page 32
of the Prospectus under the heading, "FDA Investigations":  

     On October 23, 1996, the Company withdrew four of its ANDAs,
including its ANDA (the "Capsule ANDA") for acetaminophen/oxycodone
capsules, and halted sales of the affected products.  Net sales
pursuant to the withdrawn Capsule ANDA were approximately $2.15
million and $8.00 million for the six months and the year ended
June 30, 1996 and December 31, 1995, respectively, and accounted
for approximately 28% and 40% of the Company's total net sales
during such six and twelve month periods.  The Company instituted
the withdrawal in anticipation of its release from the FDA's
Application Integrity Policy list and its restrictions
(collectively, the "AIP").  The FDA had placed the Company on the
AIP in connection with its investigation of the Company's
operations which culminated in the 1993 consent decree.  Under the
AIP, the FDA suspended all of the parent company's (i.e., Halsey
Drug Co.'s) applications for new drug approvals, including ANDAs
and supplements to ANDAs.  At the FDA's suggestion, the Company
retained outside consultants to perform validity assessments of its
drug applications.  Thereafter, the FDA recommended that several
applications, including the Capsule ANDA, be withdrawn.  As a basis
for its decision, the FDA cited questionable and incomplete data
submitted in connection with the applications.   The FDA indicated
that withdrawal of the four ANDAs was necessary for the release of
the Company from the AIP.

     It is the Company's understanding that it will be removed
from the AIP in the near future.  Accordingly, the Company
has submitted a new ANDA with respect to the Capsules, which the
Company anticipates will be reviewed on an expedited basis. 
However, there can be no assurance that the new Capsule ANDA will
be approved or that the Company will in fact be removed from the
AIP.  The Company will not be able to market the capsules unless
and until the FDA approves the new Capsule ANDA.  Failure to
obtain FDA approval for the new Capsule ANDA, or a significant
delay in obtaining such approval, would materially adversely
affect the Company's business operations and financial condition.