Note 4. Inventories

Inventories at March 31, 2013 and June 30, 2012 consist of the following:

(In thousands)	March 31, 2013		June 30, 2012
Raw Materials	$	15,693	$	11,351
Work-in-process	3,362		4,805
Finished Goods	11,778		9,130
Packaging Supplies	2,014		1,778
	$	32,847	$	27,064

The preceding amounts are net of excess and obsolete inventory reserves of $1,190 and $1,472 at March 31, 2013 and June 30, 2012, respectively.

Recently, the FDA increased its efforts to force companies to file and seek FDA approval for GRASE or Grandfathered products. GRASE products are those “old drugs that do not require prior approval from FDA in order to be marketed because they are generally recognized as safe and effective based on published scientific literature.” Similarly, Grandfathered products are those which “entered the market before the passage of the 1906 Act, the 1938 Act or the 1962 amendments to the Act.” Efforts have included issuing notices to discontinue marketing certain products to companies currently producing these products. Lannett currently manufactures and markets one product that is considered GRASE or a Grandfathered product, C-Topical Solution. An additional GRASE product, Oxycodone HCl Oral Solution (“Oxycodone”) was manufactured and marketed through October 2012. In July 2012 the FDA issued notice forcing all companies who manufactured Oxycodone to remove it from the market by October 2012 and to file an application seeking FDA approval . The Company had $445 and $1,703 of net inventory value of other Grandfathered products at March 31, 2013 and June 30, 2012, respectively.