EXHIBIT 10.7 Compensatory Arrangements for Non-Employee Directors

<PAGE>

                                                                    EXHIBIT 10.7

              Compensatory Arrangements for Non-Employee Directors

              ----------------------------------------------------

Annual Retainer Fee:

-------------------

       OSI Pharmaceuticals, Inc. ("OSI" or the "Company") compensates its

non-employee directors for service on the Board of Directors. Effective January

1, 2003, each non-employee director is paid an annual retainer fee of $50,000.

The Chairman of the Board and the Chair of the Audit Committee are paid an

additional annual retainer fee of $100,000 and $40,000, respectively, in

recognition of their increased responsibility and service. Each other

non-employee director who serves as a member of the Audit Committee is paid an

additional annual retainer fee of $25,000, and each non-employee director who

serves as a member of any other Board committee, but is not a member of the

Audit Committee, is paid an additional annual retainer fee of $12,500.

       Fifty-percent of the annual retainer fee earned by each non-employee

director is provided to the director in the form of a restricted stock award

under the terms of the Stock Purchase Plan for Non-Employee Directors (the

"Stock Purchase Plan") or the Amended and Restated Stock Incentive Plan ("Stock

Incentive Plan"). The remaining fifty-percent of the director's annual retaine