Professional Documents
Culture Documents
» Key considerations for our activities 17 D1, D2, E2, F1, F2,
G1, G2
» Improving access in the developing world and 19 B2, B3, E3 MDG 1; MDG 4
emerging markets
» Improving access to vaccines and immunization 22 B3, E3 MDG 4; MDG 8 Target 4
in the developing world
» Improving access to HIV/AIDS treatment and care 23 B3 MDG 4; MDG 6;
in the developing world MDG 8 Target 4
» Improving access in developed countries 25 B3, F3, F4
» Future goals and priorities for improving and accelerating 27
access to medicines, vaccines and health care globally
Ensuring Confidence in the Safety and Quality of Our Products 28 PR1, PR3
» Our commitment to product safety 28 E3
» Our commitment to product quality 30 E1, E4
» Future priorities 31
Conducting Ourselves Ethically and Transparently 32 SO2, SO3, SO4, SO8 A5 Principle 10
» Our Values and Standards 32 LA10, HR4 Principle 10
» Fostering a fair, transparent and open environment 34 Principle 10
» Ethical sales and marketing practices 34 PR3, PR6, PR7, PR9 A5 Principle 10
» Respecting and promoting human rights 36 HR3, HR5, HR6, HR7, LA4, LA10 Principles 1–5
» Future goals and priorities 37
Managing Our Environmental Footprint 38 MDG 7 Principle 8
» Improving environmental and safety compliance 38 EN23, EN28, SO8
» Addressing climate change and energy use 40 EC2, EN3, EN4, EN5, EN7, Principle 9
EN16, EN17, EN18
» Water use 42 EN8, EN10
» Emissions, effluents and waste 42 EN1, EN2, EN19, EN20, EN21, EN22
» Product stewardship 44 EN26 Principle 7, 9
» Future goals and priorities 45
Advocacy and Outreach 46 LA10
» Making a responsible contribution to public policy debates 46 SO5, SO6 B1, B2, B3, B4, B5 Principle 10
» Ensuring our policy and engagement conduct is beyond reproach 48
» Engaging with our stakeholders 49 A4
» Working in public/private partnerships to address societal challenges 49 MDG 8 Target 4
» Future goals and priorities 49
Executing the Basics 50
» Corporate governance 50 Principle 10
» Building a positive work environment 51 EC7, LA1, LA2, LA3, LA11, LA12, LA13 MDG 3 Principle 6
» Fostering safety and health in the workplace and in our communities 53 LA6, LA7, LA8, LA10, PR1
» Managing our supply chain 54 EC6, HR1, HR2, LA10 E1, E4 Principle 6, 10
Philanthropy at Merck 56
Summary of Key Performance Indicators 60
Our Medicines and Vaccines 63
Index 64
Contact Us Back cover
For more information on additional GRI disclosures and a comprehensive GRI index, go to www.merck.com/cr/gri.
For more information on our ATMI reporting, go to www.merck.com/cr/atmi.
* A2: Merck has a long history of working to improve access to medicines and numerous related policies, but we have not yet formalized an overall access to medicines policy.
† We mention only the goals that are most closely related to our business. For more information on our contributions to the MDGs, see www.merck.com/cr/access/mdgs.
At Merck our fundamental responsibility
is discovering, developing and delivering
innovative medicines and vaccines that can
make a difference in people’s lives and
create a healthier future.
This report contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These
statements are based on management’s current expectations and involve risks and uncertainties, which may cause results to differ mate-
rially from those set forth in the statements. The forward-looking statements may include statements regarding product development,
product potential or financial performance. No forward-looking statement can be guaranteed and actual results may differ materially from
those projected. Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new informa-
tion, future events, or otherwise. Forward-looking statements in this report should be evaluated together with the many uncertainties that
affect Merck’s business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of Merck’s Form 10-K for
the year ended Dec. 31, 2008, and in any risk factors or cautionary statements contained in the Company’s periodic reports on Form 10-Q or
current reports on Form 8-K, which the Company incorporates by reference.
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1 www.merck.com/about/mission.html 4 www.un.org/millenniumgoals/
2 www.merck.com/finance/reportsannual.html 5 www.atmindex.org
3 www.globalreporting.org/ReportingFramework/G3Guidelines/ 6 www.unglobalcompact.org
Message from the CEO
First and foremost among them is our It is important that we continue to As reflected in the theme of this report,
ongoing commitment to putting patients remain true to our core values, one of Merck is committed to ongoing engage-
first. Discovering and developing novel which is to operate openly and ethically. ment with stakeholders, and to ensuring
medicines and vaccines is at the heart In this spirit we have taken significant that we are responsive to their concerns.
of who we are as a company. But we steps to improve transparency, commit- Our interactions help to ensure that our
also believe it is important to get our ting to public disclosure of our financial approach to corporate responsibility
medicines and vaccines to the people support for third-party groups and reflects both public expectations and our
who need them most. In the United for healthcare providers who speak on long-standing company values.
States, we are working with the Obama behalf of Merck or our products.
Administration and Congress to support We are proud of what we have achieved
the enactment of common-sense plans We also want to do our part to tackle thus far – but there is always room for
to reform the U.S. healthcare system. climate change. To this end, we are improvement. As a company, our corpo-
We also recently increased the income improving energy efficiency across our rate responsibility reporting and gover-
parameters for Merck’s U.S. Patient
Assistance Program to help more people
benefit from our 50-year-old program.
Significantly, Merck’s corporate respon- the only U.S. company in the top seven.
sibility commitment is evident through- In early 2009 Merck was ranked No. 4
out the business, as demonstrated by on CRO Magazine’s 100 Best Corporate
its leadership in researching, develop- Citizens list. This public recognition
ing, manufacturing and marketing confirms what many of our global
the medicines and vaccines that make stakeholders already know: Merck is
such a difference to millions of people in step with the evolving demands
worldwide. Merck’s recent engagement of global business – competitive, inno-
in the United Nations Global Compact vative, and responsible.
is entirely consistent with its corporate
2
values and standards.
MATERIALITY
ASSESSMENT PROCESS MATERIALITY APPROACH
In 2008, Merck conducted a materiality IS THIS ISSUE MATERIAL AND SHOULD WE REPORT ON IT?
assessment based, in part, on standards for
sustainability reporting and discussions MERCK MERCK
with both internal and external stake- CANNOT CANNOT
INFLUENCE INFLUENCE
INCRE A SING CONCERN TO STAKEHOLDERS
4 nomic growth. Through our research than US$8.8 billion worldwide, we help ending December 31, 2008.
FINANCIAL INFORMATION*
GLOBAL 2008† 2007 2006 2005
* For more information, see our Annual Financial Report (10-K) for the year ended December 31, 2008 at www.merck.com/finance/reportsannual.html.
† Amounts from 2008 include a gain on distribution from AstraZeneca LP, a gain related to the sale of the Company’s remaining worldwide rights to Aggrastat,
the favorable impact of certain tax items, the impact of restructuring actions, additional legal defense costs and an expense for a contribution to The Merck
Company Foundation.
‡ Research activities and investments include all Merck divisions.
2008 REVENUE BY SUPPORTING OUR We contribute to our communities in
GEOGRAPHIC REGION (US$M) COMMUNITIES three ways:
As of April 30, 2009, Merck (includ- » Direct and indirect economic contri-
ing its Banyu subsidiary in Japan) butions such as employment, training,
had a physical presence in approxi- support of local suppliers and local
mately 80 countries worldwide with R&D, and paying taxes (as above);
OTHER approximately 265 research, manufac-
$2,882.5 » Managing our community impacts –
turing, sales and administration sites. In
JAPAN
all of these locations, we recognize that for example, by ensuring confidence
$1,823.5
our success depends in large part on our in environmental and safety perfor-
relationships and interactions with mance and respecting human rights;
UNITED STATES
EUROPE, $13,370.5 our local communities, including business » Addressing community needs
MIDDLE EAST and community leaders, elected officials, through philanthropy and commu-
AND AFRICA charities, fenceline neighbors, educators,
$5,773.8 nity involvement.
local media and our employees.
Underlying our community approach
We strive to have a positive impact on is our commitment to respecting
the communities in which we oper- human rights. As a signatory to the
ate, and we recognize our responsibility UN Global Compact, Merck is commit-
toward those affected directly or indi- ted to protecting and promoting fun-
rectly by our operations and activities. damental human rights not only within
our immediate workforce but within our
We rely on local communities not only broader sphere of influence, including
for our workforce but also for many of within our local communities. For more
our suppliers and for our ability to do information on our commitment to
business. Through ongoing engagement human rights, go to p. 37.
and dialogue, we work to understand
community needs and concerns, and to In addition, during the course of our
respond by addressing local challenges operations, we take great care not to
in ways that build stronger communi- cause harm to our communities, through
5
ties and support the sustainability of rigorous management of the safety of
our business. our processes and our environmental
footprint. For more information,
go to p. 38.
development of MRL scientific strategy R&D IMPACT to the approximately 11,000 people
9
or operations from discovery through AND PERFORMANCE behind the life-enhancing discoveries
late-stage development.This procedure Medicines discovered and developed of Merck Research Laboratories, we
provides a consistent approach that ensures by Merck scientists save and improve are among the world’s most innovative
compliance with applicable laws, regula- countless lives around the globe. Thanks institutions in the medical sciences for
tory requirements and Merck policies. producing first-in-class medicines.
Percentage of top 20 global burdens of illness addressed by our 53‡ 60 N/A N/R
products and pipeline (as defined by WHO and excluding accidents,
premature birth and self-inflicted injuries)
and acquiring new technologies and discovery pipeline. The EBR portfolio in December 2008 Merck announced
compounds that are consistent with our includes partnerships worldwide, and a new division – Merck BioVentures
R&D strategy. drug discovery programs in all six of (MBV). This division is aimed at
Merck’s franchise areas, with a goal developing biosimilar products that
The majority of our research invest- of delivering 25 percent of the early will capitalize on the upcoming patent
ment is in our in-house research but pipeline from external sources of sci- expirations of many currently-marketed
we are also committed to working ence within three to five years. More at: biologic therapeutics. It is anticipated
with strategic partners who can help www.merck.com/cr/research. that biosimilars will offer great value
us achieve our research and financial and improved access to these classes
objectives, particularly in view of an Our external alliances range from tar- of medicines.
increasingly challenging regulatory and geted acquisitions to research collabora-
commercial environment. These external tions, licensing preclinical compounds SCIENTIFIC PARTNERSHIPS
collaborations are a fundamental and and clinical compounds and technology The sharing of ideas across scientific
ongoing component of our research transactions. In 2008, Merck signed disciplines enables Merck to continue to
and development strategy. 46 external agreements to leverage build on our culture of innovation. We
innovative science that is conducted encourage our scientists to collaborate
To this end, in 2007 Merck established outside of Merck. with peers at the top private and public
our External Basic Research (EBR) research institutions and to share the
division, MRL’s newest, and virtual, As we continue to expand and diversify results of their research outside of Merck
laboratory. Focused explicitly on exter- Merck’s scientific portfolio, we anticipate through publications and participation
nal sources of science and innovation, that our treatments will include not only in professional meetings.
EBR is developing and implement-
ing a strategy to expand the scope and
size of Merck’s early pipeline through
collaborations with external partners.
Like MRL’s other research sites, EBR
medicines and vaccines derived from
chemistry, but also biological medicines, In addition, Merck collaborates with
which are large molecules produced
using living organisms. In order to
leverage our unique capabilities for
external researchers and other members
of the pharmaceutical industry by par-
ticipating in selected scientific consortia.
11
contributes to all stages of Merck’s biosimilar products and novel biologics, Consortia are an important mechanism IN ACTION
OUR VALUES
MERCK BIOVENTURES »
Merck BioVentures expects to have a well-diversified product port- regulatory as well as commercial advantages compared to working
folio across many clinical indications; we are committed to having at with mammalian cells, since it will make it easier for us to control
least five biosimilar products in late-stage development in 2012 and and assure quality. The ability to precisely characterize our proteins
to launching at least six biosimilar products between 2012 and 2017. will be important to payors, physicians and patients – providing
The Company has announced its plans to invest over $1.5 billion in added choices from the available products for a given indication.
Merck BioVentures by 2015. The experience we are gaining with bio-
THE FUTURE REGULATORY ENVIRONMENT
similars and the proprietary technology that we continue to estab-
lish will further enhance our launch into novel biologics as well. The regulatory landscape for biosimilars is still evolving. Because
of the complexity of biologics, there exist regulatory concerns
GLYCOFI PROVIDES INNOVATION
about a simple generic-type biosimilar approval process. We under-
A critical component of Merck’s entry into biosimilars was enabled stand these concerns and, therefore, our strategy is to conduct
by the acquisition of a New Hampshire-based company named a thorough development program, including a complete preclinical
GlycoFi in 2006. Through the GlycoFi acquisition, Merck obtained a toxicology package and Phase III clinical studies for each of our
strong intellectual property position for the production of protein biosimilars, and submit Biologic License Applications to obtain
therapeutics, including monoclonal antibodies and vaccines, that approval. We will, of course, adapt our approach as new legal
are of a particular glycoform and constitute new compositions. We requirements are implemented.
believe that the yeast-based platform may provide major scientific,
IN ACTION
OUR VALUES
MSD FRANCE, FOUNDING MEMBER OF THE NATIONAL ALZHEIMER’S FOUNDATION »
Almost 30 million people worldwide are affected by Alzheimer’s
disease, and this is estimated to quadruple to 120 million by 2050.2
Because people with Alzheimer’s disease become unable to care for
themselves and require extensive assistance for numerous years,
the economic impact on health and social systems is significant and
growing. There is currently no cure for Alzheimer’s and other forms
of dementia. The few existing treatments can only improve symp-
toms or slow their progression in some people. More research is
essential to fight this disease.
In France, the Government has identified Alzheimer’s as a national
priority, launching a National Alzheimer’s Plan (2008–2012), and
establishing the Foundation for Scientific Cooperation on Alzheimer’s
Disease and Related Conditions to set up a national network of excel-
lence in Alzheimer’s research and treatment.
MSD France is a founding member of this Foundation and has com-
mitted $5 million over five years to its financing. The Company will disease progression, and will help identify other ways to make
also share research and provide advisory scientific support to the improvements in patients’ quality of life. Merck will also benefit
National Alzheimer’s Plan. from broader perspectives that can help inform our own research
We believe that this public/private initiative will foster research into agenda and plans.
novel diagnostic methods and treatments that could prevent or halt
IN ACTION
OUR VALUES
by which researchers can work together Organization (WHO). More at: treatment of onchocerciasis (river blind-
INTENSIFYING OUR
www.merck.com/cr/researchpriorities.
Working with numerous partners over
many years, Merck has research pro-
grams relating to significant burdens of
illness in the developing world, includ-
ness), see p. 20. In 2009, Merck and
DNDi (Drugs for Neglected Diseases
initiative) entered into a collaborative
agreement to facilitate the discovery
and development of safe, effective, and
RESEARCH INTO DISEASES ing malaria, tuberculosis, diarrheal affordable therapies for neglected
PREVALENT IN THE disease, cervical cancer, and HIV and tropical diseases (NTDs). For more
AIDS (including for pediatric use). infor mation, see p. 20.
DEVELOPING WORLD More at: www.merck.com/cr/access
Overall, Merck’s R&D is closely aligned
with global needs, and addresses more
developingworld. CLINICAL RESEARCH AND
than half of the global burdens of DISCLOSURE OF RESULTS
Merck’s research has also resulted in Patient safety is our highest prior-
illness as defined by the World Health
MECTIZAN® (ivermectin) for the ity. Merck conducts clinical trials
* Prior year data have been adjusted since reporting last year due to a change in methodology.
† Phase V trials are conducted to determine new uses for existing products and/or broader health and economic outcomes.
‡ We have modified this KPI from last year to report clinical trials initiated vs. clinical trials conducted.
CLINICAL RESEARCH POLICY ISSUES »
» Pediatric Formulations and Indications: Where appropriate, we are laws and regulations and Merck’s own Code of Conduct and
conducting clinical trials and seeking approval for pediatric indi- related policies. For more information go to Contributions at:
cations and age-specific formulations. For a listing of all of our www.merck.com/cr/clinicalresearch.
pediatric clinical trials in Phases I–IV, go to www.ClinicalTrials.gov.
» Contract Research Organizations: Before agreeing to work with an
» Informed Consent: Merck requires assurance that subjects and/ outside Contract Research Organization (CRO), Merck performs
or their legal representatives understand the procedures, use rigorous assessments and due diligence audits to ensure that the
and disclosure of personal health information, use of biological CRO complies with Good Clinical Practice (GCP) standards and is
samples, and risks/benefits involved in a clinical study, and that aligned with Merck’s own Code of Conduct. Merck performs peri-
their participation is voluntary. Informed consent is obtained odic audits of all existing CROs with which we do business. If we
prior to initiation of any clinical study procedures. In the case identify violations of the contract or GCP, Merck works with the
that a prospective clinical study participant cannot read the CRO on a corrective action plan. If improvements are not made
form, the consent form may be read by a patient advocate, with within a defined time period or if repeat violations occur, Merck
consent documented and witnessed. More information at: will terminate work with the CRO.
www.merck.com/cr/clinicalresearch.
» Compassionate Use Programs: Merck has a new procedure for a
» Working with External Collaborators: Merck supports academic compassionate use program that recognizes the importance of
and community-based physicians and researchers in expanding providing access to new treatments under development to cer-
clinical and scientific knowledge and in improving the under- tain patients. Merck may conduct a compassionate use program
standing of the appropriate use of Merck products. After evaluat- under the following circumstances: the disease is life-threatening
ing requests, Merck provides the external scientific community or severely debilitating; no alternative treatments are available
with drug, funding and/or human resources, in accordance with for patients; a patient is not eligible for a clinical trial; and a
marketing authorization application is planned in the future.
worldwide; we rigorously study our Good Clinical Practices (ICH–GCP) In response to physicians’ and patients’
products, working with regulators and standards. More information on clinical requests for improved information, Merck
healthcare professionals over many years trial conduct and governance at: registers clinical trials at www.Clinical
to characterize the efficacy and safety www.merck.com/cr/clinicalresearch. Trials.gov and has been posting results of
profiles of our medicines and vaccines clinical trials at the site since October 2008.
(for more information on safety issues, Merck is committed to the timely Prior to December 2008, Merck
see p. 28). registration of clinical trial information posted results of clinical trials to
and disclosure of trial results – regard- www.ClinicalStudyResults.org. This
Merck’s clinical trials, fundamental to less of their outcome. We believe that provides patients and physicians with
the development of innovative medi- clinical trial registries serve an important information about ongoing clinical trials
cines and vaccines, adhere to laws and function for patients and their healthcare that are open and recruiting patients
regulations for the protection of human providers to learn about and gain access and ensures that researchers who analyze,
subjects, including the International to relevant clinical trials of experimental report or publish the results of clinical
13
Conference on Harmonization – treatments or preventative agents. trials have timely information about
PERCENTAGE OF PATIENTS
0 10 20 30 40
United States
Europe
Asia Pacific
Latin America
* Phase V trials are conducted to determine new uses for existing products and/or broader health and economic outcomes.
IN ACTION
OUR VALUES
MISE IN THAILAND »
In 2006, MISE launched an international program in the tsunami-
ravaged areas of Thailand, in conjunction with MSD Thailand, the
Kenan Institute Asia, and the Thai Ministry of Education. Known
as the Inquiry-based Science and Technology Education Program
(IN-STEP) and launched in Phang-nga with a $500,000 commitment
from Merck, the three-year initiative seeks to improve student per-
formance in science through inquiry-based learning, and to develop
a proven model for the Ministry of Education to replicate nationwide.
Since the program began, a team of MISE staff and educators
from U.S. partner school districts and organizations has worked
with local experts in Thailand to translate and adapt instructional
materials from the United States that are consistent with Thailand’s
educational reform program. To date, the initiative has trained more
than 125 Thai educators on these instructional materials. Thirty-six
of the Thai teachers who received the training have used their new
knowledge to teach workshops co-designed with IN-STEP staff.
In addition to the formal workshops, MSD Thailand has organized
employee volunteers to assist teachers in the classroom; to date,
more than 40 employees have participated.
our medicines and vaccines. Over ZETIA, with atorvastatin, the active HPV vaccine, for the new indication
290 Merck clinical trial results were ingredient in Lipitor, as another for use in males to prevent external
posted on www.ClinicalStudyResults.org treatment option for patients with genital lesions.
through December 2008. high cholesterol.
FUTURE GOALS
In addition, we are committed to pub- On June 5, 2009, Merck reported that AND PRIORITIES
lishing the results from confirmatory the preliminary results for the pivotal » Merck will continue to grow its
clinical trials in peer-reviewed journals. Phase III study of rolofylline (MK-7418) pipeline, with a focus on research-
In 2008, Merck submitted 235 manu- showed that rolofylline did not meet the ing and developing first-in-class or
scripts of clinical trial results and related primary or secondary efficacy endpoints, best-in-class medicines and vaccines
papers to such journals. and that while Merck will continue to in targeted areas according to our
analyze the data with outside experts, R&D agenda.
Merck supported the revisions to the Company will not file applications » For the longer term, we are commit-
the Pharmaceutical Research and for regulatory approval this year. ted to having at least five biosimilar
Manufacturers of America (PhRMA) products in late-stage development
Number of participants in the Academy for Leadership 136 N/R N/R N/R
in Science Instruction
levels. We have provided long-term, sus- objectives and make a lasting difference understanding of the fundamentals of
tained support for programs that expand in education reform by committing to leadership and strong classroom science
capacity for training in biomedical and long-term partnerships focused on the instruction. With more than 140 educa-
health sciences. Our support continues specific goals of: tors participating, the Academy is now
today through activities that are driven the primary vehicle for professional
» Developing and delivering research-
through public/private partnerships with development of partnership teachers,
based professional development
local, regional and national partners; rely administrators and district staff, and this
opportunities to enhance teacher
on evidence-based approaches to learn- change will be reflected in increased
knowledge and skills;
ing; and undergo rigorous evaluation. Academy registration as the program
» Providing access to high-quality cur- continues to expand.
At the pre-college level, our key pro- riculum materials and resources;
gram is The Merck Institute for Science One of our major programs in higher
» Building communities within and
Education (MISE), established in 1993 education is our partnership with the
across school districts that are com-
as a non-profit organization dedicated United Negro College Fund (UNCF),
mitted to strengthening science
to improving science education from which established the UNCF/Merck
teaching and learning within and
kindergarten through 12th grade, and Science Initiative in 1995. This ground-
across schools and school districts;
influencing education policy. MISE has breaking program seeks to expand the
made a significant impact on the char- » Promoting local, state and national pool of world-class African-American
acter of teaching and learning science policies that support effective biomedical scientists and, in so doing,
in its partner school districts, according science education. to enhance economic competitiveness
to research performed over a 15-year in the United States. The initiative also
period first by the Consortium for In August 2008, MISE launched the provides Merck with an opportunity
Policy Research in Education (CPRE) Academy for Leadership in Science to recruit from a more diverse pool of
and subsequently by Horizon Research, Instruction, a three-year professional post-doctoral fellows in support of the
Incorporated (HRI). It has become a development program for teachers, Company’s diversity workforce goals.
model for how corporations can support principals and district administrators
the nation’s STEM (science, technology,
engineering, mathematics) education
enabling them to work as school- and
district-based teams, and deepening their
IN ACTION
15
OUR VALUES
UNCF/MERCK SCIENCE INITIATIVE »
Dr. Robert L. Satcher, Jr., M.D., Ph.D., a chemical engineer who is a UNCF/Merck post-doctoral fellow in 1997. “Historically, we’ve not
investigating a range of compounds that could be used for thera- had much of a commitment in this country to encourage African-
peutics, is a prime example of how the UNCF/Merck Science American talent in the sciences. This fellowship is an important part
Initiative works to support African-American biomedical students. of the solution.”
Dr. Satcher is an orthopedic oncologist who formerly treated
The program’s dedication to mentoring fellows is critical. “Even
patients at Northwestern Medical Center in Chicago, Illinois, and
though I went to a ‘good’ school and had support at home, there
now conducts research on how bone cells respond to physical
was still the potential that I wouldn’t get it right,” Dr. Satcher says.
forces – a subject that led him to become a NASA astronaut so he
“Helping other young scientists realize their potential is key.”
could study it further.
Dr. Satcher is scheduled to be a crew member on the November 2009
“[The UNCF/Merck Science Initiative] provided me support for
Space Shuttle launch to the International Space Station.
research at a critical time in my training,” says Dr. Satcher, who was
ENDNOTES
SECTION
1 Candidates shown in Phase III include specific This chart reflects the Company’s current 2 Wimo A. Economic Impact of Dementia.
products. Candidates shown in Phase I, II and research pipeline as of July 15, 2009. This 24th Conference of Alzheimer’s Disease
III include the most advanced compound with chart has been excerpted from the Company’s International, March 26, 2009.
a specific mechanism in a given therapeutic quarterly report on Form 10-Q filed with the
area. Back up candidates are not shown. SEC on August 3, 2009 and should be viewed
along with disclosures in that filing.
KE Y ISSUE
Improving Access to
2 Medicines, Vaccines and Health Care
The health and physical well-being of people well as type C strains that are found in indus-
around the world depends on their access to trial countries. Or a final product that has the
drugs and vaccines that can effectively prevent, shelf-life, stability or limited number of required
control and cure diseases. Unfortunately, there is doses to make it a robust, and usable product in
limited research and development investment in low-income country settings where there are few
many tropical diseases such as malaria or dengue, trained medical staff and little health infrastruc-
and therefore little prospect of new drugs being ture in rural areas. Research-based pharmaceutical
available anytime soon to treat these significant companies have a critical role to play in foster-
causes of illness and death. ing the research, development and production of
drugs and other medical products that have a very
There is also limited investment in ensuring that significant health value to the global community,
important medical breakthroughs translate into and not just U.S. or European markets. These
products that can treat different strains of disease firms have the power to literally save millions of JOY PHUMAPHI
or perform effectively in medical conditions in lives, and spur the economic and social develop-
Vice President for
Africa. This requires drug-makers, for example, ment of families and communities worldwide.
to produce meningococcal vaccines that address Human Development,
type A strains commonly found in Africa, as World Bank
17
sets and achieves product access indica- only U.S. pharmaceutical company in for ROTATEQ in October 2008 and for
tors and targets. Merck’s Global Public the top seven. MMR-II (Measles, Mumps, Rubella
Policy and Corporate Responsibility Virus Vaccine Live) in December 2008.
group advocates for reforms and legisla- KEY CONSIDERATIONS In May 2009, GARDASIL was the
tion with both national and international FOR OUR ACTIVITIES first cervical cancer vaccine awarded
authorities that will help expand access In developing business strategies and WHO prequalification. STOCRIN,1
to medicines and health care. The Office models to improve access, Merck CRIXIVAN and ATRIPLA,2 our treat-
of Corporate Responsibility collaborates considers a wide range of policy issues ments for HIV/AIDS, have also received
with senior divisional and regional and how best to address them, and what WHO prequalification. Merck is com-
management on alliance development, actions we can take, either directly or mitted to working with WHO for the
health policy and other issues related in partnership with others, to be most prequalification of ISENTRESS. As it
to global health partnerships and effective in achieving our goals. These is required by the prequalification pro-
access. More on our access strategy at policy issues include: cess, Merck is awaiting the inclusion of
www.merck.com/cr/access. ISENTRESS in WHO’s Expression
REGISTRATION AND of Interest and will be ready to submit
Through this approach, Merck has been WHO PREQUALIFICATION the necessary documents.
able to improve access to our medicines Merck is committed to registering
and vaccines throughout the develop- our medicines and vaccines in develop- To increase the transparency of the
ing world and emerging markets. In ing countries and emerging markets in Company’s product registration status, we
June 2008 we were recognized for our parallel with developed countries to the are disclosing registration for ROTATEQ,
efforts when the newly launched Access extent permitted by local regulations; in GARDASIL and our four antiretrovirals
to Medicines Index (ATMI) ranked this connection WHO prequalification (ARVs) and updating this information
Merck No. 3 among the world’s largest is an important step in fostering access. every six months. More details at www.
pharmaceutical companies in promoting merck.com.cr/accessvaccines.
IN ACTION
OUR VALUES
PANDEMIC PREPAREDNESS – A-H1N1 INFLUENZA OUTBREAK »
In response to the A-H1N1 influenza outbreaks, Merck has been To help with the outbreak response in Mexico, Merck’s Mexican
in ongoing contact with public health officials and international subsidiary announced a donation of 80,000 doses of PNEUMOVAX23
organizations to determine how best to contribute to the effort to (Pulmovax in Mexico) to Birmex, the state-owned vaccine facil-
combat this potential global health threat. Since many deaths in flu ity of Mexico, for the immunization of healthcare workers in
patients are due to a secondary bacterial infection such as pneumo- affected areas.
nia, Merck also assessed its ability to meet a potential increase in
demand for PNEUMOVAX23, Merck’s pneumococcal vaccine.
18
need to continue to invest in research, informed Merck, and Merck sent noti- wait for solutions. For that reason,
development and production and to fications of the Dutch patent violation Merck remains committed to donating
provide an attractive return to our share- to the carrier, the manufacturer and the our products through the Merck Medical
holders. More on Merck’s worldwide importer from Brazil. In this case, Merck Outreach Program, the MECTIZAN
pricing strategy at www.merck.com/cr/ acted within its legal rights to enforce Donation Program and through our
accessdevelopingworld. a valid patent in the Netherlands. As a U.S.-based Patient Assistance Programs.
policy matter, however, we should have We also believe that, in well-defined
PATENTS taken greater consideration of the fact circumstances involving informed
The overwhelming majority of medi- that the shipment was bound for a partnership agreements and attention
cines and vaccines considered essential country in which Merck does not have to sustainability of access, programs
by the WHO are not patented in the patent rights. We have ensured that our involving donated vaccines can help
developing world; yet very few people policies and internal procedures have accelerate access to novel vaccines and
in those countries have access to the been clarified on this point. drugs (see p. 23 for an example related
medicines they need. A complex array to vaccine access in Nicaragua). Merck
of factors create practical barriers to LICENSING is committed to conforming fully to the
access to care.3 Merck considers issuing licenses for WHO Guidelines for Drug Donations
our medicines and vaccines to further and to disclosing the U.S. wholesale
Intellectual property protection provides increase their availability. To grant such value of drug donations per year. See
a critical incentive for research-based licenses, however, we must first be cer- p. 21 for more on these programs.
pharmaceutical companies to invest in tain of both the quality of the licensee’s
the research and development of new product and the ability of the licensee to PUBLIC/PRIVATE PARTNERSHIPS
medicines and vaccines. Further, policies provide uninterrupted supply. To date, A critical part of Merck’s access strat-
that support innovation, including R&D Merck has granted royalty-free licenses egy is promoting and participating in
in the life sciences sector, are key drivers for our ARV efavirenz to five South public/private partnerships (PPPs) with
for national economic competitiveness African generic manufacturers. local communities, governments, NGOs,
and social prosperity. For these reasons multilateral organizations and other
we support and advocate for effective corporations to address specific health
IN ACTION
OUR VALUES
THE MERCK MECTIZAN DONATION PROGRAM »
The Merck MECTIZAN Donation Program (MDP) is one of the most
significant initiatives undertaken by Merck to help improve access to
medicines in developing countries. Established more than 20 years
ago, the MDP is the longest-running disease-specific drug donation
program and public/private partnership of its kind in history, and is
widely regarded as one of the world’s most successful public/pri-
vate health collaborations.
Onchocerciasis, or “river blindness,” is one of the leading causes of
preventable blindness worldwide, affecting mainly rural areas in
sub-Saharan Africa and Latin America. In 1987, Merck announced
that it would donate MECTIZAN, our breakthrough medicine for
the treatment of onchocerciasis, to all who needed it, for as long
as needed, to eliminate the disease as a public health problem. To
facilitate the donation and delivery of MECTIZAN, Merck established
a unique, multisectoral partnership, involving the World Health
Organization (WHO), the World Bank and UNICEF, the Task Force for
Global Health, as well as ministries of health, non-governmental of MECTIZAN for river blindness will reach 100 million treatments
development organizations and local communities. annually by 2010.
In 1998, Merck expanded the Merck MECTIZAN Donation Program In November 2007, public health officials announced that transmis-
to include the prevention of lymphatic filariasis (LF), commonly sion of river blindness had been halted in Colombia, marking the
referred to as elephantiasis, in African countries where the disease first time that the disease has been eliminated as a public health
co-exists with river blindness. problem on a country-wide basis anywhere in the world. In 2008,
it was announced that 31 percent of the formerly at-risk population
Since the program began, Merck has donated more than 2.5 billion
in the Americas is no longer at risk of contracting the disease. The
tablets of MECTIZAN for river blindness, with nearly 700 million
success of the program in Latin America means that 74,476 people
treatments approved since 1987. The program currently reaches
in 190 communities are now free of the threat of river blindness,
more than 80 million people through river blindness programs
and signals the potential for a future free of river blindness in all
in Africa, Latin America and the Middle East (Yemen) annually.
of the Americas. In a promising development toward elimination of
Additionally, 300 million treatments for lymphatic filariasis (LF)
river blindness in Africa, WHO’s department of Tropical Disease
have been approved, with nearly 90 million treatments approved in
Research is conducting studies to determine endpoints to stopping
2008 alone.
treatment with MECTIZAN in certain areas of West Africa.
To date, Merck has invested more than $35 million dollars in direct
More on the MDP, its performance and impacts at
financial support for the MECTIZAN Donation Program, in addition
www.merck.com/cr/mectizan.
to $3.9 billion worth of tablets. We estimate that Merck’s donation
and development challenges beyond around the world, including the African IMPROVING ACCESS IN THE
those which Merck can directly control.
We have five decades of experience in
developing PPPs to build healthcare
capacity and expand delivery systems.
The best known of these programs is the
Merck MECTIZAN Donation Program
Comprehensive HIV/AIDS Partnerships,
that are helping to prevent and treat
HIV/AIDS, other chronic condi-
tions and vaccine-preventable illnesses.
Information on specific partnership
programs can be found throughout this
DEVELOPING WORLD AND
EMERGING MARKETS
Merck has an ethical responsibility –
and the ability – to help accelerate
access to our medicines and vaccines in
19
least developed countries where access
(see box above), the first large-scale, report and on www.merck.com/cr.
is most lacking. In middle-income
comprehensive global health initiative of
countries and emerging markets,
its kind. Merck has applied our experi-
we are undertaking opportunities to
ence with the MECTIZAN Donation
expand our business, while at the same
Program to programs and partnerships
time providing our medicines and
* We value our product donations based on the U.S. wholesale price. Decrease in product donations is due in large part to decline in patient enrollment in our
corporate U.S. Patient Assistance Program attributed in part to an increasing number of patients with prescription drug coverage (including through the
Medicare Prescription Drug Program, which began in January 1, 2006).
† Includes Merck Medical Outreach Program (including ACHAP), MECTIZAN Donation Program and Merck U.S. Patient Assistance Program.
IN ACTION
OUR VALUES
EMERGING MARKETS »
Emerging markets will continue to provide significant growth Korea, Russia, Turkey, Poland and Brazil. Merck is committed
opportunities for Merck. We are on track to achieve our goal of to creating and leveraging business opportunities in an innova-
$2 billion in sales from emerging markets by 2010, and we are tive, responsible and sustainable manner that will drive revenue
determined to be among the top five pharmaceutical companies growth in emerging markets.
in the markets we are focusing on, which include China, India,
vaccines to new patients in a fair and In 2008, Merck began supporting partnerships in infectious disease areas
responsible manner. Mothers2Mothers (m2m), an orga- that enable innovation in diseases of
nization that addresses prevention of the developing world.
HEALTHCARE CAPACITY-BUILDING mother-to-child transmission (PMTCT)
Merck recognizes that human resource by employing mothers living with HIV In January 2008, Merck and other phar-
capability-building is a major factor (‘Mentor Mothers’) as peer educa- maceutical companies agreed to provide
in addressing global health challenges. tors and professional members of the financial support for the WHO/TDR
For this reason, we are engaged in a healthcare team, in public health facili- Partnership Network (Special Program
number of initiatives to address health- ties in Kenya, Lesotho, Malawi, Rwanda, for Research and Training in Tropical
care capacity-building in the developing South Africa, Swaziland and Zambia. By Diseases (TDR)), an independent global
world, focusing specifically on health- the end of 2008, m2m had expanded to program of scientific collaboration.
care training. For example: a total of almost 500 sites across Africa, Potential collaboration involves industry
employing 1,400 women living with grants to scale up TDR’s network
In 2009, with support from The Merck HIV/AIDS as mentors and reaching infrastructure for (1) maintaining capaci-
Company Foundation, the Earth more than one million people. ties for drug testing in cell and animal
Institute at Columbia University models; (2) maintaining its database
launched a community health worker In addition, since 2003 Merck has of drug targets and information on
training program to strengthen com- helped increase the capacity of national known “drug-ability” of the targets; and
munity health services for over immunization programs through the (3) evaluation and feedback to collabo-
400,000 people in ten African coun- Merck Vaccine Network – Africa rating institutions.
tries as part of the Millennium Villages (see p. 23). For more on Merck’s health-
project (www.millenniumvillages.org). care capacity-building activities in the In 2009, Merck and the Drugs for
The initiative aims to advance the developing world, go to www.merck. Neglected Diseases initiative (DNDi)
development of a professional cadre of com/cr/healthcarecapacity. entered into a collaborative agreement
approximately 800 community health to support the discovery and develop-
workers to fill a critical gap in primary DEVELOPING WORLD ment of improved treatments for a wide
healthcare provision for rural communi- RESEARCH INITIATIVES range of neglected tropical diseases
ties throughout Africa. Merck has a long history of both in- (NTDs). Merck will contribute small
house research and external research molecule assets and related intellectual
IN ACTION
OUR VALUES
» In high human development index (HDI) countries 52.6M 44M N/R N/R
22 » In GAVI countries*
18
(196)
6
(119)
504,000
72
(178)
31
(113)
N/R
105
(106)
81
(82)
N/R
1
(1)
1
(1)
» In GAVI countries* 8 21 9 0
(38) (30) (9) (0)
» Partnership data:
* GAVI list includes 72 countries that are eligible for funding; this includes countries that are classified as low HDI as well as some countries that are classified
as medium HDI. Fifteen UN member countries are not included in the Human Development Index due to lack of data.
† Prior year data have been adjusted due to a change in methodology.
‡ As of 12/31/08.
IN ACTION
OUR VALUES
ROTATEQ ACCESS PARTNERSHIP »
Each year rotavirus kills more than 600,000 children under five, rotavirus vaccination that are among the highest in the world. The
mostly in the developing world. In 2006, Merck and the Ministry of Ministry of Health reports that approximately 81 percent of eligible
Health in Nicaragua announced a new public/private partnership at infants in Nicaragua were vaccinated with ROTATEQ in 2008 and
the Clinton Global Initiative through which all eligible infants born that winter hospitalizations for diarrhea and dehydration have been
in Nicaragua in a three-year period would receive free doses of considerably lower than in the past. By the end of 2009, the govern-
ROTATEQ, Merck’s vaccine to help prevent rotavirus. Merck is also ment hopes to achieve an 82–84 percent vaccination rate.
providing technical assistance for the duration of the program, and
In addition to helping Nicaragua protect infants and young children
is working with the Nicaraguan Ministry of Health to strengthen
from rotavirus, this program is adding to the evidence base support-
Nicaragua’s national rotavirus disease surveillance network and
ing introduction of routine rotavirus vaccination in resource-poor
assess the public health benefit resulting from the early adoption
countries, and has helped to inform access decisions in other coun-
and use of a rotavirus vaccine.
tries. More at: www.merck.com/cr/accessrotateq.
As of April 2009, Merck has provided nearly one million free doses
of ROTATEQ to Nicaragua, and the country has achieved rates of
23
ment to donate at least three million 510 immunization managers in Kenya, IMPROVING ACCESS TO
doses of GARDASIL, Merck’s cervical Mali, Uganda and Zambia have com- HIV/AIDS TREATMENT
cancer vaccine, to organizations and pleted MVN–A training and returned
AND CARE IN THE
institutions in developing countries. to their medical facilities to share their
The GARDASIL Access Program expertise and knowledge with col-
DEVELOPING WORLD
For more than 20 years, Merck has sought
enables applicants from eligible lowest- leagues. For more information, go to
to make a difference in the fight against
income countries to gain operational www.merck.com/cr/mvna.
HIV/AIDS, discovering and develop-
experience in the design and implemen-
ing innovative treatments for the disease.
tation of HPV vaccination projects,
Today we market four ARVs: CRIXIVAN,
with the goal of supporting the develop-
STOCRIN, ATRIPLA and ISENTRESS.
ment of successful child and adolescent
Since our HIV products first reached the
Number of patients on Merck ARV therapy – all formulations, all products 653,867* 763,118 701,391
(Percentage in developing world) (76) (91) (93)
Percentage of total patients on Merck ARVs estimated to be children taking 17 15 19
pediatric formulations
Percentage of total patients using Merck ARVs at prices which Merck does not profit 76 82 74
Percentage of total patients using Merck ARVs at significantly discounted prices 9 8 18
Number of countries and territories in which patients are on at least one formulation of 131 135 125
Merck’s ARVs
* Although the 2008 figure represents a decrease to the number of patients on Merck ARVs, it is important to recognize that the number of patients in
developing countries treated with generic ARVs – including those through cooperative efforts with AAI companies – has increased significantly.
IN ACTION
OUR VALUES
CHINA-MSD HIV/AIDS PARTNERSHIP (C-MAP) »
In 2005, Merck and the Government of China established the first
large-scale, national comprehensive public/private partnership,
known as the China-MSD HIV/AIDS Partnership (C-MAP), to address
HIV/AIDS prevention, patient care, treatment and support. In sup-
port of China’s Action Plan for Reducing & Preventing the spread
of HIV/AIDS (2006–2010), the partners introduced the project in
Liangshan Prefecture, Sichuan Province, with the aim of developing
a comprehensive model that could be replicated in other provinces.
The Merck Company Foundation has committed $30 million to
support the partnership over five years; the Government of China,
through the leadership of the Ministry of Health, is providing staff,
facilities and equipment. The project is focused on six strategies:
» Raising awareness and reducing discrimination among target
populations through training and education
» Deploying comprehensive, integrated risk-reduction approaches
to reduce HIV transmission among high-risk populations populations, more than 45,000 at-risk individuals, including injec-
tion drug users, commercial sex workers and STD clinic patients
» Establishing a service network to provide consecutive treatment,
have undergone targeted HIV prevention interventions to encourage
care and support to people living with HIV/AIDS
treatment, prevention, HIV testing and counseling through peer
» Providing support to orphans and families affected by HIV to education initiatives. To increase the diagnosis of people living with
alleviate negative social and economic impacts HIV/AIDS and to provide timely counseling and referral services,
» Building capacity of healthcare workers and organizations and C-MAP supported the efforts of Liangshan’s Disease Control Center
developing new anti-HIV strategies and techniques to establish 82 provider-initiated HIV testing and counseling (PITC)
sites in 12 counties along with 22 testing and counseling sites for
» Strengthening HIV surveillance, monitoring and evaluation pregnant women in four counties for the prevention of mother-to-
systems and data management and analysis to track program child transmission (PMTCT); nearly 96,000 people, including more
implementation, assess program outcomes, and identify and than 17,000 pregnant women, have received HIV testing/counseling
apply best practices in a timely manner. services through PMTCT sites.
In 2008, C-MAP expanded to cover 62 counties/districts targeting In the first half of 2009, C-MAP continues to implement its 2008 Work
21 million out of 87.5 million total population in Sichuan Province. Plan, which was significantly delayed by the Sichuan earthquake
From 2007 through 2008, C-MAP launched 82 initiatives in sup- that occurred in 2008. In 2009 and 2010, the program will continue to
port of its six core strategies. Through a variety of HIV educational ensure resources are focused in areas of greatest need, and provide
programs, nearly two million people received up-to-date HIV infor- support to solve capacity and manpower issues at local levels.
mation and training. To reduce the infection rate among high-risk
24
market in 1996, we have worked to expand versus developed counties). As of formulations for its ARVs. Of those
access to them both directly and in partner- December 31, 2008, 653,867 patients being treated with Merck ARVs, as of
ship with others, particularly for patients in in 131 countries and territories were end of year 2008, there were an esti-
countries that are the poorest and hardest being treated with regimens contain- mated 111,471 children using pediatric
hit by the pandemic. ing at least one of Merck’s ARVs. Three formulations, representing 17 percent
out of four (76 percent) – or an esti- of all patients on Merck ARVs. We are
Merck has had an intensive broad-based mated 498,845 patients – obtained these currently engaged in a collaboration
HIV/AIDS clinical research program ARVs in the more than 80 countries in with the National Institute of Allergy
since 1985 that has sought to address which we sell them at a price at which and Infectious Diseases and others on
both treatment and prevention. In Merck does not profit. An additional a study of ISENTRESS in children
addition to Merck’s active research and nine percent received Merck ARVs and adolescents. We are also working
development programs focusing on in countries where they are offered at in partnership with the U.S. President’s
novel ARV drugs, Merck has made a significantly discounted prices. Nine out Emergency Plan for AIDS Relief
significant investment in HIV vaccine of ten patients using Merck ARVs (PEPFAR) Partnership for Pediatric
development. Beyond our own research live in developing countries in Africa, AIDS Treatment to identify scientific
efforts, we have entered into partner- Asia, Latin America and the Caribbean and technical solutions to improve access
ships with other researchers and scien- where the pandemic is having its most to ARV treatment for children living
tific organizations to help accelerate the devastating impact. with HIV/AIDS in resource-limited set-
search for new treatments and innova- tings. For more information on pediatric
tive prevention strategies. For details on Access to affordable HIV diagnostics formulations for our ARVs, see
Merck’s long history of groundbreaking and treatment for children is an urgent www.merck.com/cr/accesshivaids.
research in this area, go to www.merck. global health priority. According to
com/cr/accesshivaids. UNAIDS, there are approximately PARTNERSHIPS TO IMPROVE
2.1 million children under the age of ACCESS TO ARVS
Merck believes a relevant measure of 15 living with HIV worldwide. As part The most important factors for improv-
the success of our ARV access strategy of the Company’s ongoing commit- ing access to ARVs in the long term are
is the number of patients treated, and ment to the fight against HIV/AIDS, strengthening healthcare infrastructure,
where they are treated (developing Merck has developed certain pediatric ensuring adequate financing for health,
IN ACTION
OUR VALUES
FOSTERING HEALTH LITERACY IN SWITZERLAND »
Health literacy means having the skills to make decisions that are supported by health insurers, MSD Switzerland initiated the “Health
good for one’s health.4 For pharmaceutical companies such as Literacy Alliance” in 2006, which advocates for health literacy in
Merck, improved health literacy contributes to better public under- health policy and among the general public.
standing of disease prevention and management, and to building
These activities have raised awareness of the importance of health
stronger, more sustainable health systems able to support contin-
literacy among the public and other stakeholders, and helped
ued healthcare innovation.
ensure the issue was included in draft preventative health legisla-
MSD Switzerland has been working with universities and others tion in 2008.5 Health literacy has also been designated an objective
to support programs to raise health literacy levels in the country. of the Swiss e-health strategy.6 These two important developments
In 2006, MSD sponsored a Swiss Health Literacy Survey which pro- are beginning to provide a legal and institutional framework for
vided the first comprehensive picture of health literacy challenges improving health literacy in the future.
in the country. With Health Promotion Switzerland, a foundation
and helping to build local healthcare CRIXIVAN to Botswana’s national helping to expand the Global Fund’s
capacity through training and support. ARV treatment program for the part- engagement with the private sector
Public/private partnerships have a criti- nership’s duration. In November 2008, through co-investment, involvement
cal role to play in this process, drawing Merck expanded its donation to include in country coordinating mechanisms,
on the complementary expertise of ATRIPLA and ISENTRESS. ACHAP policy development, resource mobi-
all stakeholders – governments, inter- has made a significant contribution to lization and advocacy. We also engage
national agencies, community organiza- key aspects of Botswana’s response to the with stakeholders at scientific and
tions, donors, the private sector, NGOs, HIV/AIDS epidemic and has served as policy events, such as the second Global
patients and others – to identify the a catalyst for the provision of urgently Experts Summit held in Vancouver in
most promising and efficient ways to needed infrastructure, equipment, human February 2009, which aimed to develop
address the impact of HIV/AIDS in resources, training and program support expert consensus on the research needed
a variety of resource-scarce settings. for the Botswana ARV program. The ini- to optimize the individual and societal
Merck is engaged in a number of part- tiative has dramatically reduced mother- benefits of the public health approach to
nerships worldwide, including: to-child transmission and reduced new delivering ARV therapy.
infections among children by 80 percent,
ACCELERATING ACCESS INITIATIVE (AAI): and has significantly improved blood FUTURE GOALS AND PRIORITIES
Merck is a founding member of the supply safety. As of April 30, 2009, more RELATING TO HIV/AIDS
AAI, a partnership between UNAIDS, than 126,000 patients were receiving » Merck remains committed to contin-
the WHO, UNICEF, UNFPA, the ARV treatment; this is approximately ued R&D investment in new treat-
World Bank and nine research-based 84 percent of the treatment-eligible ments for HIV.
pharmaceutical companies to broaden population, significantly up from less
» We will continue to engage in creative
access while ensuring rational, safe and than five percent when the program
partnerships that address the full range
effective use of medicines for HIV/ began and the highest coverage rate
of factors affecting access to medi-
25
AIDS. As of September 30, 2008, some in Africa.
cines and the impact of HIV/AIDS in
773,803 patients in developing countries
resource-constrained settings.
were estimated to be taking one or more CHINA-MSD HIV/AIDS PARTNERSHIP
medicines supplied at preferential prices (C-MAP): In 2005, Merck and the
by an AAI company. Although this fig- Government of China established a IMPROVING ACCESS IN
ure is lower than in 2007, it is important large-scale, comprehensive public/ DEVELOPED COUNTRIES
to recognize that the number of patients private partnership to address HIV/AIDS Even in industrialized countries, access
in developing countries treated with prevention, patient care, treatment to medicines can be hindered by lack
generic ARVs – including those through and support (see p. 24). of insurance coverage, bureaucratic
cooperative efforts with AAI com- reimbursement and pricing approval
panies – has increased significantly. A comprehensive summary of Merck’s processes, and government policies that
HIV/AIDS partnerships and programs seek to cut costs but can often limit
AFRICAN COMPREHENSIVE HIV/AIDS can be found at www.merck.com/cr/ patient and physician choice. We believe
PARTNERSHIPS (ACHAP): In 2000, the hivaidspartnerships. increased access can be achieved through
Government of Botswana, The Merck a strategy that combines pricing our
Company Foundation/Merck & Co., STAKEHOLDER ENGAGEMENT AND products responsibly, and, where neces-
Inc., and the Bill & Melinda Gates PUBLIC POLICY ACTIVITIES sary, donating our products to those
Foundation established ACHAP to sup- Merck maintains an active dialogue who lack healthcare coverage; advocat-
port and enhance Botswana’s response with various stakeholders involved in ing for healthcare reforms that will allow
to the HIV/AIDS epidemic through HIV/AIDS public policy and outreach, citizens greater access to treatment and
a comprehensive approach to HIV/ including NGOs, patient groups, and care; and promoting and participating
AIDS prevention, treatment, care, sup- scientific leaders, through specialized in public/private partnerships to address
port and impact mitigation. Since 2001, advisory boards, targeted feedback chronic and infectious disease and other
The Merck Company Foundation and meetings, and through participation in complex health challenges.
the Gates Foundation have committed various public policy fora and initia-
US$106.5 million to the partnership. tives. As a member of the Private Sector PUBLIC POLICY AND ADVOCACY
In addition, Merck agreed to donate Delegation of the Global Fund since Merck is an active and responsible
its ARV medicines STOCRIN and 2002, Merck has been instrumental in participant in the public dialogue
U.S. PATIENT ASSISTANCE PROGRAMS * » PERFORMANCE DATA SUMMARY 2005–2008
2008 2007 2006 2005
Number of patients utilizing Merck’s Patient Assistance Program (PAP) 250,285 350,000 540,240 730,000
Number of prescriptions filled under Merck’s PAP (Millions) 1.5 >1.6 >3.4 6.9
Total value of Merck medicines dispensed under Merck’s PAP† (US$M) 174 116.5 326 542
Number of patients enrolled in Merck Prescription Discount Program 6,952 12,334 28,946 82,742
Number of enquiries to Merck’s call center about PAP/discount program 347,557 328,724 526,640 1,025,659
* Decrease in numbers due in part to an increasing number of patients with prescription drug coverage, including Medicare Prescription Drug Program.
† Totals include the Merck Vaccine Patient Assistance Program and are based on the U.S. wholesale price.
on healthcare reform, advocating for promote efficiency and enhance the adult vaccines free of charge to unin-
improving access to medicines, vac- quality of care. To learn more about sured adults age 19 or older who cannot
cines and quality health care, includ- Merck’s advocacy efforts on U.S. health- afford their vaccines.
ing reforms that support our ability to care reform, go to www.merck.com/
continue to research and develop new healthcarereform. Merck experienced a 19 percent decline
innovative products, and to promote in patient enrollment in our corporate
access to medicines and quality care. PHILANTHROPIC INITIATIVES U.S. Patient Assistance Program (PAP)
IN THE U.S. from 2007 to 2008; this compares to
In countries with social healthcare sys- While donating medicines and vaccines a 35 percent decrease from the previ-
tems, including most European coun- is not a sustainable solution to the access ous year. Total prescriptions declined
tries and Canada, we understand the challenge in the United States, Merck by 12 percent in 2008, while total value
pressures on governments to improve has several programs which make our of products provided through Merck’s
public health while effectively manag- products available to those who cur- Patient Assistance Programs decreased by
ing limited healthcare resources. In these rently cannot afford them. five percent. The decline is attributed in
countries, we advocate for healthcare part to an increasing number of patients
policies that address the interdependent Through our U.S. Patient Assistance with prescription drug coverage (includ-
goals of ensuring rapid access to new Programs, which began more than ing through the Medicare Prescription
medicines and vaccines for patients who 50 years ago, Merck has provided more Drug Program, which began January 1,
need them, using limited healthcare than 27 million free prescriptions and 2006). Another contributing factor to
resources most efficiently, and support- vaccines, representing a total value usage decline was the removal of one
ing continued innovation and devel- (Wholesale Acquisition Cost) of more Merck product – FOSAMAX – from the
opment of important new treatments. than $1.9 billion over the past seven years. product list in mid-2008 (six months after
More on healthcare reform on p. 47. Effective March 1, 2009, Merck increased patent expiry) once patients had broad
the income limit to the Merck Patient access to lower-cost generic equivalents.
pharmaceutical industry initiative that asthma healthcare services for children; system reform worldwide to help
brings together America’s pharmaceuti- enhance knowledge about asthma among improve and accelerate access to
cal companies, as well as doctors, patient affected individuals and the general medicines and vaccines.
advocacy organizations and civic groups public; foster asthma-friendly schools and
» IMMUNIZATION: To inform and enable
to help low-income, uninsured patients communities; promote asthma-safe home
customer decisions, we will continue
get free or nearly free brand-name environments; and reduce disparities in
to work with partners to demonstrate
medicines. To date, the PPA has helped childhood asthma outcomes. MCAN
the benefits using our newest vaccines
more than five million patients. More at: supports childhood asthma programs
and to assess immunization program
www.MerckHelps.com. in New York, Los Angeles, Chicago,
effectiveness. Merck believes that out-
Philadelphia and San Juan, Puerto Rico.
comes data from ongoing demonstra-
PUBLIC/PRIVATE PARTNERSHIPS The number of children and families
tion projects will continue to show the
IN THE U.S. receiving direct support through MCAN
public health and economic impact of
To complement our donation efforts, is growing steadily. At the same time, the
our vaccines, as well as our medicines.
Merck works in partnership with number of healthcare providers who have
governments, multilateral organizations, received asthma education through the » INTELLECTUAL PROPERTY: Merck will
community-based organizations, other program has almost tripled in the last continue to advocate at the national
corporations and NGOs to address three years. For more on MCAN’s activi- and international level for strong intel-
specific health challenges beyond those ties, go to www.mcanonline.org. lectual property protection in develop-
over which Merck has immediate and ing and developed country markets,
direct control. THE MERCK ALLIANCE TO REDUCE coupled with growth in our efforts
DISPARITIES IN DIABETES: To address to expand our supply chain through
THE MERCK CHILDHOOD ASTHMA the growing problem of healthcare qualified local business partners as a
NETWORK (MCAN): Established in 2005, disparities in the context of type 2 way to ensure affordable and high-
the Merck Childhood Asthma Network, diabetes in the United States among quality supplies to all of our customers.
Inc., (MCAN), is a non-profit, 501(c)(3) minority, low-income and underserved
» HEALTHCARE CAPACITY: Lack of skilled
organization established to address adult populations, The Merck Company
healthcare professionals will continue
the complex and growing problem of
pediatric asthma in the United States.
Funded by The Merck Company
Foundation, the mission of MCAN is
to support and advance evidence-based
programs that improve the quality of
Foundation launched The Alliance to
Reduce Disparities in Diabetes with
a commitment of $15 million through
2013. More on p. 58.
1 STOCRIN (efavirenz) is marketed by Bristol- 2 ATRIPLA is marketed by Bristol-Myers Squibb Vol 3. San Diego: Academic Press; 2008.
Meyers Squibb under the tradename SUSTIVA and Gilead in the United States, Canada and pp. 204–211.
in the United States, Canada and six European Europe. Merck and Gilead are working to
5 Federal Office of Public Health, Draft law
countries (France, Republic of Ireland, register and distribute ATRIPLA in 106 develop-
on Prevention and Health Promotion, at
Germany, Italy, Spain and the United Kingdom). ing countries around the world.
www.bag.admin.ch/themen/gesundheit
It is commercialized by Merck through its
3 Attaran A. How Do Patents and Economic spolitik/00388/01811/01843/index.
affiliate MSD in all other countries within the
Policies Affect Access to Essential Medicines html?lang=de.
European Union and many countries outside
in Developing Countries? Health Affairs 2004;
the United States. 6 Federal Office of Public Health, eHealth
23(3):155–166.
Strategy, at www.bag.admin.ch/themen/
4 Kickbusch I and Maag D. Health Literacy. In: krankenversicherung/04108/index.html?
Kris Heggenhougen and Stella Quah, editors lang=de.
International Encyclopedia of Public Health,
KE Y ISSUE
A current global challenge to the quality and Trust in medicines and medicines information is critical
safety of medicines is the proliferation of coun- to ensuring patients can benefit from prescribed treat-
terfeits. Appropriate regulations and enforcement ments. Research by the National Health Council has
mechanisms are needed to prevent counterfeit revealed that, while many patients are willing to accept
medicines reaching patients. However, given that a certain amount of risk, the main reason why people
this cannot currently be guaranteed, the risks of do not adhere to prescribed treatments is the fear of
counterfeits should be communicated to patients adverse side effects. Additionally, the International
and the public. Patients should be encouraged to Alliance of Patients’ Organizations (IAPO) has
buy medicines from trusted sources and to report found that patients worldwide believe strongly in
any suspect medicines. Pharmaceutical companies their basic right to participate in decisions about their
can play a valuable role in raising awareness of the health care, and to have full information about diag-
issue and working with patient groups, regulators noses and treatments to make the best decisions.
and others to communicate risks and develop MYRL WEINBERG
strategies to address the problem, including set- A collaborative effort of patient advocacy orga-
President, National Health Council, and
ting appropriate regulations. nizations and private industry on these issues can
improve trust and increase adherence, making for Board Chairman, International Alliance
a healthier population. of Patients’ Organizations (IAPO)
29
evaluate safety. In late 2007, Merck’s senior leadership with the Observational Medical
launched the SafetyMatters initiative Outcomes Pilot (OMOP), a partner-
ADVERSE EVENT REPORTING (AER) to investigate potential enhance- ship between The Foundation for the
After a product has been approved and ments to our already robust approach National Institutes of Health, the FDA
is being prescribed to patients, manufac- for identifying and evaluating health and PhRMA to explore the applica-
turers are required to report to regula- outcomes of interest (HOIs) in con- tion of large claims and electronic health
tory authorities adverse experiences they nection with our marketed products. record databases to assist in the evaluation
learn about from any source. We ensure The goal of SafetyMatters is to explore of the benefit/risk profiles of marketed
adverse event information is entered and implement appropriate use of medicines, and so improve drug safety
into our global AER database and is emerging technologies and methods for monitoring. More at: omop.fnih.org.
submitted to regulatory authorities in a HOI identification and evaluation, and
timely manner and in accordance with thereby further enhance post-licensure PRODUCT LABELING AND
country-specific regulations. Merck has monitoring and evaluation of our PRODUCT INFORMATION
an extensive program in place to process marketed products. Ongoing oversight and monitoring of
and assess adverse experience reports. our product labels and information are a
More at: www.merck.com/cr/safety. major focus of our safety efforts.To inform
treatment choices and address safety
questions, we believe in the importance Since the introduction of SINGULAIR Over the past few years, Merck has
of providing physicians and patients with in 1998, the Company has updated the experienced a number of challenges in
communications about our products, post-marketing section of the prescrib- manufacturing that have prevented us
their benefits and risks. By providing ing information to communicate a from being able to meet global demand
appropriate information about our prod- range of adverse events reported with for a number of our vaccines. We are
ucts, and working with patient organiza- post-marketing use of the drug, includ- working to correct these issues and to
tions and other stakeholders, we want to ing neuropsychiatric events. Merck regain our position as a reliable vac-
encourage better adherence to treatment will continue to work with the FDA cine manufacturer and supplier. In the
and foster improved public health. to revise the prescribing information past three years, Merck has invested
for SINGULAIR in the United States. over $1 billion in new manufacturing
U.S.-Based Resources on the Safety Merck is confident in the efficacy and resources to ensure that we have the
and Effectiveness of Medicines and safety of SINGULAIR, which has been long-term supply capabilities to meet
Treatments include: prescribed to tens of millions of patients public health needs around the world.
with asthma and allergic rhinitis since More at: www.merck.com/cr/quality.
» U.S. Federal Drug Administration
its approval.4
(FDA) Drug Index: www.fda.gov/
In early 2008, the FDA inspected
cder/drug/DrugSafety/DrugIndex.htm
OUR COMMITMENT TO Merck’s West Point vaccines and bio-
» The Physicians’ Desk Reference web PRODUCT QUALITY logics manufacturing facility. At the
site: www.pdrhealth.com Merck is committed to providing the conclusion of the inspection, the FDA
global community with quality products issued a report containing 49 observa-
» Merck’s products website:
and a reliable supply of safe and effective tions from their visit. Subsequently
www.merck.com/product
medicines and vaccines. We maintain Merck received a Warning Letter from
strict product quality standards and mul- the FDA dated April 2008.
If you live outside the U.S., please see
local regulatory agency web sites for tiple supply chain safeguards to ensure
the safety and supply of our products Merck took the observations and the
safety information about medicines
no matter where our medicines and Warning Letter very seriously and
prescribed in your country.
vaccines are manufactured in the world. committed to addressing all concerns
STEPPING UP THE FIGHT Committee to oversee our global laws and enforcement programs, includ-
AGAINST COUNTERFEITS anti-counterfeiting strategy and ensure ing increased criminal and civil penal-
Counterfeit pharmaceutical products that our anti-counterfeiting goals ties for counterfeiters. In addition, we
are a growing global problem and a seri- are reached. support the efforts of organizations such
ous threat to public health. For Merck, as the Partnership for Safe Medicines
maintaining patient safety and protect- Merck has in place strict policies and to educate the public about the risks
ing our reputation are paramount, and procedures designed to keep our drug of counterfeit medicines. For details on
are the principal goals underlying our distribution system safe and secure, these efforts, go to www.merck.com/cr/
corporate anti-counterfeiting strategy. and to minimize any opportunity for anticounterfeiting.
counterfeit products to enter the supply
To achieve these goals, we work with chain. In the United States, we require FUTURE PRIORITIES
government agencies, pharmaceutical customers to purchase our products » We continue to implement our vac-
manufacturers, wholesalers, distributors, directly from Merck or a Merck autho- cine supply manufacturing strategy
consumer groups and related organiza- rized distributor. In addition, we publish as part of our commitment to restore
tions in the global fight against pharma- the names of authorized distributors Merck’s reputation as a reliable global
ceutical product counterfeits. on Merck’s website, and we audit our supplier of quality vaccines.
distributors to ensure compliance with
Merck maintains a comprehensive Merck’s policies and procedures. In the » We continue to maintain strict
worldwide anti-counterfeiting program European Union, Merck works with product quality standards and multiple
that has three goals: (1) secure the sup- law enforcement agencies to detect and supply chain safeguards to ensure the
ply chains, (2) rapidly deter, detect respond to counterfeit products, includ- safety and supply of our products no
and respond to counterfeit activity, and ing importation or trans-shipment of matter whether our medicines and
(3) raise public and stakeholder aware- counterfeit pharmaceuticals through the vaccines are manufactured internally
ness of the risks posed by counter- European Union. In a number of or externally.
feits, and deliver effective advocacy to developing countries, Merck has pro- » We will continue to implement our
increase enforcement and shape key vided training to Customs officials, in corporate, proactive worldwide anti-
regulatory requirements. In further- conjunction with the Pharmaceutical counterfeit strategy, focused on secur-
ance of the work that Merck has Security Institute. ing the supply chain, detecting and
done in combating counterfeits and responding to counterfeit events,
recognizing the growing nature of Merck also supports and advocates for and raising awareness of the risks of
the counterfeit problem, in 2008, increased enforcement of existing anti- counterfeit pharmaceutical products.
31
Merck’s Executive Committee estab- counterfeiting laws and the adoption
lished an Anti-Counterfeiting Steering of public policies to strengthen existing
1 Department of Health. Better information, better choices, better health: putting information at the centre of health. DOH, London, 2004.
2 Nielsen-Bohlman N, Panzer AM, Kingdig, DA Eds. Health Literacy: A Prescription to End Confusion. Institute of Medicine of the National Academies.
National Academies Press, Washington, 2004.
3 www/merck.com/newsroom/press_releases/products/2008_0708.htm. and www.fda.gov/BiologicsBloodVaccines/Vaccines/Approved
Products/ucm111280.htm
4 www.merck.com/newsroom/press_releases/product/2009_0612.html
KE Y ISSUE
Conducting Ourselves
4 Ethically and Transparently
Pharmaceutical companies that have built robust Finally, as the United States government re-opens
business ethics and compliance programs, like the issue of healthcare reform, companies must
Merck, must now do more to evaluate the beef up transparency of specific corporate and
effectiveness of their systems. In other words, once trade associations’ lobbying positions. Such sun-
policies are written and employees are trained, shine may defuse allegations of hidden backroom
how do companies determine if anonymous dealings, or undue corporate influence, which has
employee hotlines, or stronger rules for marketing tarnished what was once a “good guy” industry.
drugs to doctors, are achieving their desired ends?
» Compliance with Company policies, To date, 90 percent of Merck employees interest is high and we anticipate that we
applicable governmental laws, rules have completed Know the Code training, will reach 100 percent in 2009.
and regulatory requirements;
» Prompt internal reporting of viola-
tions of the Code;
» Accountability for adherence to the
and we anticipate this will increase to
95 percent by the end of 2009. In 2008,
we rolled out new and updated courses
on anti-corruption and bribery, and
financial stewardship. In 2009, we are
ADDRESSING MISCONDUCT
Like integrity of product, integrity of
performance is a Merck standard
wherever we do business, and ignorance
33
values and standards set forth in implementing new and updated courses of that standard is never an accept-
the Code. on the importance of raising concerns able excuse for improper behavior. We
within the Company, conflict of inter- make it clear that no act of impropriety
Merck’s Office of Ethics develops and est, global trade compliance and safe advances the interest of the Company
oversees global initiatives designed to harbor privacy. and no act of impropriety will
deter illegal, unethical and improper be tolerated.
behavior related to the Company’s An important component of Merck’s
business, and has implemented several corporate compliance program is our In 2008 we established comprehensive,
mechanisms to help ensure the highest annual compliance review, which global guidelines for escalation, inves-
standards of ethics and integrity across includes an annual conflict of inter- tigation, remediation and recognition
our business. In 2007, it launched a est certification and disclosure process, of non-compliance events, and imple-
global compliance online training series and compliance with key corporate mented them across our different divi-
to provide employees with tools and policies. All directors, officers, managers sions and regions. These guidelines will
resources for making responsible busi- and other selected Company employees help ensure the appropriate disciplinary
ness decisions. All employees worldwide must certify in writing the absence or action is taken, up to and including
are required to complete Know the Code, existence of actual or potential conflicts dismissal, when necessary.
the first course of this series; new of interest under this Conflict of Interest
employees undergo this training within Policy. Our annual response rate to the
30 days of joining Merck. disclosure statement on conflicts of
HELPING OUR EMPLOYEES that policymakers and other stakeholders standards and transparent business prac-
DO THE RIGHT THING are more likely to listen to what we have tices. By working across industries and
Our employees worldwide understand to say. For Merck as a highly regulated continents to promote ethical behav-
that they should bring to the attention pharmaceutical company, ethical work- ior, we believe this initiative can help
of management workplace issues of any ing practices without cutting corners limit corruption, encourage fair and
type including potential violations of result in real contributions to science, open competition, and lead to a better
law, Company policy or the Company’s and they enhance our regulatory com- business environment.
Code of Conduct. Merck strives to pro- pliance. All of this together helps to pro-
vide a work environment that encour- mote a good climate for global business. ETHICAL SALES AND
ages employees to communicate openly MARKETING PRACTICES
with management, without fear of Merck’s commitment to ethics extends In providing the best possible care to
retaliation or retribution. beyond the Company’s boundaries. their patients, doctors use information
We actively promote the develop- from pharmaceutical companies and
Over and above this, the Office of Ethics ment of codes and standards for ethical other sources to help inform prescribing
provides several channels for Merck and transparent business practices that decisions. Accordingly, Merck believes
employees worldwide to raise ethi- can help limit corruption, ensure fair it is important to maintain informa-
cal questions or concerns.This includes and open competition and encour- tive, ethical and professional relation-
the Merck AdviceLine, a telephone line age a better business environment, all ships between healthcare providers and
available to employees around the world of which are essential to economic pharmaceutical companies. We recognize
24 hours a day, seven days a week, staffed growth and improved standards of living. that both our reputation for integrity
by an independent organization, which Merck also seeks to make a difference and the trust our stakeholders place in
allows employees to remain anonymous in in the global business environment by us depend on our ethical practices. Our
accordance with applicable legal standards supporting Transparency International interactions with healthcare providers,
for employee-based hotlines, and to com- and other organizations that work to other customers and consumers are gov-
municate in their local language to ensure eliminate corruption, promote transpar- erned by laws and regulations, as well as
accuracy of reported information. Calls ency and foster the principles outlined our long-standing global code of ethical
to the Merck AdviceLine have almost in the Organization for Economic conduct and guidance that is enforced
doubled since 2006, due in part to greater Cooperation and Development (OECD) through our global business practices
awareness of the AdviceLine as a result of Conventions against Corruption and compliance program.
increased employee communications. and Bribery.
INTERACTIONS WITH
In addition, the Merck Ombudsman In an effort to combat global corrup- HEALTHCARE PROFESSIONALS
Program offers a “safe haven” for tion, the World Economic Forum The changing healthcare environment
U.S.-based employees to express work- Partnering Against Corruption Initiative demands that Merck changes the way
related issues without fear of retaliation.(PACI) was formally launched by CEOs it interacts with physicians globally. In
The number of calls to the Office of from the Engineering & Construction, 2008, we implemented a more customer-
Ethics/Ombudsman has declined since Energy and Metals and Mining indus- centric selling model that is designed
2005, possibly reflecting strengthened tries in January 2004. Prior to the 2008 to provide a competitive advantage, help
performance management processes, as annual meeting in Davos, Merck joined build trust with customers, and improve
well as a reduction in employee numbers a global community of 138 companies
34
patient outcomes. The strategy employs
as part of our restructuring program. from various industries and regions new technologies and moves away from
of the world that have committed to the traditional frequency-based sales
FOSTERING A FAIR, TRANSPARENT strengthening efforts to counter cor- and marketing approach.
AND OPEN ENVIRONMENT ruption and bribery through the PACI
We believe that behaving ethically has by signing a statement supporting the In June 2008, Merck implemented
many advantages for our business. A rep- PACI Principles for Countering Bribery. new Guiding Principles for Ethical
utation for ethical working practices not Signing on to the PACI Principles is Business Practices with the Medical and
only helps to attract, motivate and retain a natural extension of Merck’s long- Scientific Community (see box next
talented individuals but it also means standing commitment to high ethical page), which are aligned with national
Percentage of required employees who took Know the Code training 90 90 N/A N/A†
Percentage of response to disclosure statement on conflicts of interest 99.9 97 95 93
Number of calls to the Merck AdviceLine 151 149 77 80
Number of calls to Office of Ethics/Ombudsman 583 600 597 770
Percentage of substantiated (including alternative findings) allegations 10.9 9.5 8.3 10.2
to concerns/issues raised in connection with our Code of Conduct through
AdviceLine or Office of Ethics/Ombudsman‡
regulations worldwide, industry codes pursue external verification. More at: PROMOTIONAL AND
and the World Health Organization’s www.phrma.org/code_on_interactions_ EDUCATIONAL MATERIALS FOR
Ethical Criteria for Medicinal Drug with_healthcare_professionals. HEALTHCARE PROFESSIONALS
Promotion. The new Merck Guiding The basis of our interactions with
Principles serve as a bridge between Merck is committed to the highest healthcare professionals is to provide
country laws, regulations, industry ethical sales and marketing standards truthful, balanced and non-misleading
guidelines, and the Company’s Values wherever it operates. We have developed information. Accordingly, the review
and Standards, and are intended to enable a process to assess risks associated with and approval of global promotional and
interactions with the medical and scien- sales and marketing-related business educational materials for healthcare
tific community that comply with our practices and processes, benchmarked practitioners follows a comprehen-
ethical and legal obligations and improve to industry best practices. It has been sive and strict process as specified in
human health. implemented so far in 29 countries International Medical Media Standards
around the world. By the end of 2009, it (IMMS) guidance. At Merck all such
Merck has also actively supported the will cover all major country operations. materials are reviewed and approved by
strengthening of related industry stan- medical and legal personnel, captured in
dards. In 2008, in his role as Chairman
of PhRMA, Merck Chairman, President
and CEO Richard T. Clark worked
with other PhRMA member com-
panies to revise the PhRMA Code
on Interactions with Health Care
In 2008, Merck reached civil settle-
ments with Federal and State authorities
to resolve long-standing investigations
related to disputes over the proper
calculation of Medicaid rebates as
well as certain past sales and market-
a global database, and assigned a unique
identifying number and expiration date
to facilitate usage monitoring.
Number of warning letters or untitled letters from DDMAC* or APLB† 0 N/R N/R N/R
UPHOLDING DIGNITY AND RESPECT discussions with stakeholders to gain properly and thoroughly investigated.
Merck believes in the fundamental agreement on the appropriate role of We also will ensure that the appro-
dignity of every human being and in business in promoting and protecting priate disciplinary action is taken,
respecting individual rights in all of human rights, particularly the right to up to and including dismissal, when
our operations. the enjoyment of the highest attainable necessary. We plan to report on the
standard of health. We are supporting first results of this new program in
» We condemn the use of forced labor
The World Justice Project, a multina- our 2009 report.
and exploitative child labor and
tional, multidisciplinary initiative to
expect the same of our suppliers. » We plan to develop a global train-
strengthen the rule of law worldwide
ing program based on Merck’s
» We respect employees’ lawful freedom and raise awareness of the connection
Guiding Principles for Business
of association. between the rule of law and the essen-
Practices Involving the Medical and
tials of people’s daily lives. We also sup-
» We compensate our employees fairly Scientific Community.
port the process initiated by the United
to ensure that basic needs are met
Nations to evaluate this issue and, spe- » We will voluntarily disclose in the
and provide our employees with the
cifically, the ongoing work of Professor fourth quarter of 2009 all payments
opportunity to improve their skills
37
John Ruggie, the Special Representative to U.S.-based healthcare professionals
and capabilities.
of the U.N. Secretary-General, on busi- who speak on behalf of Merck or
» We do not discriminate at any level of ness and human rights, to seek clarity our products, even in the absence of
the organization on the basis of race, around human rights and the role of busi- legislation requiring us to do so.
gender, age, ethnicity, national origin, ness. In addition, we are working with
» By the end of 2009, we plan to
sexual orientation, marital status, dis- the Danish Institute for Human Rights
formalize a Global Labor Relations
ability, genetics or religious beliefs. and a number of other pharmaceutical
Strategy, which will include global
companies to develop a sector-specific
» We provide a safe and healthy labor guidelines and principles,
human rights risk assessment tool. We
work environment. and monitoring tools to ensure
continue to work with academic experts
consistency worldwide. We will also
» We respect individuals’ right to and other key stakeholders to help in
establish labor relations advisory
privacy in accordance with legal and better defining the role of business – and
boards for every region globally to
ethical standards. specifically the pharmaceutical industry –
assist the Labor Relations Center of
in supporting the right to health.
Excellence with a variety of labor
BUSINESS AND HUMAN RIGHTS
relations activities, including adher-
Business has an important role to play FUTURE GOALS ence and monitoring of our corporate
in promoting and respecting the AND PRIORITIES Values and Standards and global Labor
advancement of fundamental human » In accordance with Merck’s recently Relations Guidelines and Principles.
rights, while not supplanting the pri- established comprehensive, global
mary obligations of governments to guidelines for escalation, investigation, » Using the Danish Institute for Human
protect the human rights of all people remediation and recognition of non- Rights pharmaceutical sector risk
within their borders and as mem- compliance events, we will ensure that assessment tool, we intend to perform
bers of the international community. events are escalated to the appropri- a human rights risk assessment analysis
Merck supports meaningful efforts and ate place within the Company, and at the headquarters level.
KE Y ISSUE
Managing Our
5 Environmental Footprint
As a global pharmaceutical company, Merck resulting from a changing climate, which could
can play a leadership role in achieving a healthy also offer growth opportunities.
society and planet.
In addressing the water challenge, we encourage
In addressing the climate challenge, we encour- the industry to help pioneer new technolo-
age pharmaceutical companies such as Merck gies and actions that will galvanize workable
to reduce the lifecycle impact of their products and effective solutions to both water scarcity and
and corporate supply chains as well as reducing water-quality issues. Newly available tools can
their direct and indirect operational footprint. help companies analyze where the best opportu-
We encourage companies to help build markets nities are for saving water and reducing pollution.
for green power by procuring electricity from
renewable sources, taking measures to reduce Merck’s size and capacity allows it to make a
use of carbon-intensive transportation fuels, positive contribution to society through ELIZABETH COOK
and offsetting residual emissions using high- ambitious leadership while at the same time
Vice President for Institutional
quality carbon offsets. Further, companies must offering product solutions that improve the
help humanity prepare for new disease patterns quality of life around the world. Strategy and Development,
World Resources Institute
39
the vicinity of our facilities and being interpretation by the Pennsylvania Merck received seven safety notices of
in full compliance with the law are of Department of Environmental Protection violation in 2008, an increase from the
fundamental importance to the way (DEP) that resulted in reporting of a three that were reported in 2007 and
we operate. Our mission and values are number of events that were not previ- similar to the eight reported for 2006.
articulated by Merck’s corporate safety ously required to be reported, such as Over the past three years, approximately
and environmental (S&E) policies. In spills of chilled water. Overall, approxi- 40 percent of the safety notices of viola-
addition to compliance with all appli- mately 70 percent of the spills reported in tion received were from governmental
cable country, regional and local safety 2008 were either spills of cooling water, safety inspections and 40 percent were fire
and environmental laws, we strive for or spills that were contained and cleaned department inspections. There were no
S&E performance that is among the best up or directed to wastewater treatment. safety-related fines paid in 2008. More at:
in the pharmaceutical industry. www.merck.com/cr/employeesafety.
Merck experienced seven water permit
In 2008, Merck received 176 inspections exceedances in 2008, one more than in Merck received nine notices of violation
by EHS regulatory agencies around 2007. Approximately 42 percent of the (NOVs) for environmental matters in
the world. This represents a 33 percent water events were related to pH, and 2008, four less than in 2007. During the
increase in environmental inspections metals and organic exceedances each past three years, 63 percent of these NOVs
and an 83 percent increase in safety accounted for 29 percent of the events. have been associated with air emissions,
inspections in 2008 over 2007. While Merck also experienced 23 air permit 25 percent with water and 12 percent with
the data set is limited, it is possible that exceedances, a decrease of five from waste. Merck paid $1,579,600 in fines
higher inspection frequencies may con- 2007. Fifty-six percent of the air events associated with environmental violations
tinue in future years. were related to exceedances of an emis- in 2008, which reflects a significant
sion limit during stack testing or routine environmental settlement paid in early
Twenty-three spills were reported by monitoring and 26 percent were related 2008 associated with three NOVs that
Merck sites worldwide in 2008 versus to temperature deviations. resulted from three spills at one site
26 in 2007. Fifty percent of these spills in 2006. More at: www.merck.com/
are related to a modified regulatory cr/community.
ENVIRONMENTAL AND SAFETY COMPLIANCE » PERFORMANCE DATA SUMMARY 2005–2008
GLOBAL 2008 2007 2006 2005
Regulatory inspections
» Environmental inspections 101 76 88 N/D
» Safety inspections 75 41 65 N/D
Environmental events
» Reportable spills and releases 23 26* 4 4
» Water permit exceedances 7 6 5 3
» Air permit exceedances 23 28 19 25
Notices of Violations (NOVs)/Citations
» Environmental 9 13 11 N/D
» Safety 7 3 8 N/D
Fines
» Environmental fines paid (US$) 1,579,600† 31,515 10,652 281,025
(Number of fines) (7) (6) (3) (4)
» Safety fines paid (US$) 0 1,500 1,975 1,000
(Number of fines) (1) (2) (2)
40
and to reduce our GHG emissions will
also help to minimize the impact on 0.3
Merck of anticipated regulatory require- REDUCING ENERGY DEMAND
Since 1994, Merck has had a formal 0.2
ments associated with climate change.
energy policy. By implementing best 0.1
Merck recognizes that although practices for reducing energy use across
the Company, we have made signifi- 0.0
voluntary programs to reduce GHG
cant progress in enhancing our energy 2004 2005 2006 2007 2008
emissions can be effective, national and
even multinational frameworks will efficiency. In early 2005, Merck adopted 2008 Goal
be required to address climate change. a cor porate goal to reduce our demand-
Merck supports a global approach that based energy intensity by 25 percent
IN ACTION
OUR VALUES
Total energy supply (Million BTUs x 106) 12.8 15.2 15.5 17.5 18.5
Energy demand intensity† (Million BTU/sq ft) 0.47 0.52 0.54 0.61 0.65
‡
Energy source (% of total)
» Purchased electricity 36 29 29 28 28
» Natural gas 38 52 53 54 56
» Fuel oil 3 3 2 3 3
» Coal 0 0 0 0 0
» Fleet fuel 23 17 16 15 13
Total GHG emissions (as CO2 eq) (Million metric tons) 1.18 1.38§ 1.38§ 1.47§ 1.51§
Total GHG emissions (as CO2 eq) baseline adjusted 1.18 1.29 1.29 1.36 1.36
for sale of facilities.¶ (Million metric tons)
per unit area (measured in millions February 2008, we announced our goal However, approximately 50,000 metric
of BTUs [MMBtu/ft2]) by the end of to reduce GHG emissions1 from the tons of this reduction is from a facil-
2008, from a baseline year of 2004. Company’s global facilities and auto- ity that has been closed but not yet
We have achieved and exceeded the mobiles by 12 percent by the end of sold. If this facility were removed from
goal, reducing our energy demand 2012 from the baseline year of 2004. the baseline, Merck’s net GHG emis-
by 28 percent. In 2008, our Energy Merck’s GHG targets, accepted by the sion reduction would be 9.6 percent
Center of Excellence (COE) developed EPA Climate Leaders program, are based from the corrected 2004 baseline. We
efficiency metrics for all major systems on an absolute reduction of 1.5 percent are committed to meeting our goal
at Merck that demand energy and we per year for eight years. of a 12 percent reduction by 2012,
are using these metrics to drive even even though new facilities currently
better performance. Merck tracks four greenhouse gases: under construction will add to Merck’s
carbon dioxide (CO2 ), methane, nitrous total emissions.
Specific energy efficiency projects oxide and hydrofluorocarbons. The vast
included the installation of variable speed majority of our GHG emissions are TRACKING OUR TRAVEL-RELATED
drives, re-commissioning of production,
research and office buildings, and the use
of free cooling and heat recovery from
recirculating water systems.
REDUCING GREENHOUSE
associated with CO2. Perfluorocarbons
(PFCs) and sulfur hexafluoride (SF6 )
are not tracked because they are typi-
cally not used at Merck facilities.
Total water usage (Billion gallons) 5.6 8.8 9.6 10.1 11.7
(Percent reduction v. prior year) (36) (8.3) (5) (13.6)
» Purchased water (Billion gallons) 1.3 1.6 1.6 1.8 1.9
» Pumped water, surface and ground (Billion gallons) 4.3 7.2 8.0 8.3 9.7
goals and are small in comparison to Approximately 77 percent of the total awareness and green chemistry expertise
overall GHG emissions. water we use is supplied from surface among our process development chemists
and ground water. Much of the water to help them develop more sustainable
We have also begun to gather the use at Merck is for utility systems in ways to synthesize our products.
emissions associated with business our manufacturing plants, more specifi-
travel and have estimated data for the cally to produce active pharmaceutical Solvents play a key role in the synthesis
years 2006 through 2008 that will be ingredients that require large volumes of pharmaceutical compounds. In 2008,
used to develop information about of cooling water. In 2008, approximately almost 40 million kilograms of solvent
environmentally smarter travel options 50 percent of the water we used globally were used in Merck’s production and
for employees. was for once-through non-contact cleaning processes. As a result of their
cooling, where water is pumped into importance to our pharmaceutical
WATER USE the plant, circulated through heat manufacturing process, we have active
In recent years, a combination of indus- exchange piping to cool processes and programs to reuse and recycle our used
trialization, urbanization and increasing then discharged at a higher temperature. solvents, as well as to find other benefi-
population growth have put pressure The vast majority of the once-through cial uses when reuse and recycling are
on the availability and quality of fresh cooling water (98 percent) was used at not practical.
water supplies. This has led to increasing facilities where there are ample sup-
concern and efforts to ensure efficient plies of ground water. To reduce water Reuse of solvents on-site in our processes
and sustainable use of water resources. consumption, many Merck facilities lowers our process costs by reducing
Because clean water is critical to both employ water reuse and recovery strate- the amount of new solvent we need to
human health and the environment as gies. During 2008, 1.8 billion gallons purchase and also decreases the amount
well as to our business, we are taking of water were recycled or reused by of waste solvents we need to transport
steps to improve our overall water Merck facilities. off-site for treatment. In 2008, more than
use efficiency and to understand our one-third of the solvents we used for
water footprint. We achieved our goal of reducing water manufacturing were recovered solvents.
use by 15 percent between 2004 and
Merck’s strategy for improving our 2008. In 2008, we used 6.1 billion gallons WASTE
water use efficiency includes reducing of water less than in 2004: a 52 per- In 2008, Merck managed almost
our overall demand for water, control- cent reduction. The closure and sale of 74,000 metric tons of wastes from
42
ling our water discharges and under- two water intensive facilities accounted our operations. Of this, 46,800 metric
standing the water-related challenges in for 59 percent of our total reduction. tons were wastes that require special
the regions where we operate. Water use reductions at the rest of our handling, including but not limited to
facilities, since including new sites that hazardous, infectious and other special
have been added, were 21.4 percent. wastes hereafter referred to as hazard-
ous. Merck’s generation of these wastes
WATER USE PERFORMANCE For details on Merck’s initiatives decreased 23 percent from 2005 to 2008.
INDICATORS worldwide to reduce water use, go to Increases in solvent recovery and reduc-
www.merck.com/cr/water. tions in on-site production volumes are
BILLION GALLONS
among the most significant contributing
12 EMISSIONS, EFFLUENTS factors to this reduction.
AND WASTE
10
Our strategy for minimizing our envi- The primary component of our hazard-
ronmental footprint focuses on reducing ous wastes is solvent from our manufac-
8
our demand for hazardous materials, turing operations. Of the hazardous waste
preventing the generation of waste, and we generate, 29 percent is recovered
6
reusing or recycling materials. off-site and reused either by Merck or by
other industries. Another 26 percent is
4
Reducing emissions and wastes of all burned as a source of energy in industrial
types begins with the original design furnaces or to generate power.
2
of our pharmaceutical manufacturing
processes and continues through instal- Most of the remaining waste is product
0 or research waste that is not recyclable.
lation. Our “green chemistry” program
2004 2005 2006 2007 2008 Of the total hazardous waste gener-
helps us design our new processes to
Purchased use more benign chemicals and reduce ated, 39 percent is incinerated and less
our generation of waste and our con- than three percent of our hazardous
Pumped
sumption of energy, water and other waste, none of which is liquid, is sent
2008 Goal to landfills.
resources. We have been building
EMISSIONS, EFFLUENTS AND WASTE » PERFORMANCE DATA SUMMARY 2005–2008
GLOBAL 2008 2007 2006 2005
* Data includes purchases of solvents in bulk (tank truck/railcar) and large packages (drums, Fisher Paks).
† Data should be considered an estimate.
‡ Data unavailable for a site sold at the end of 2007.
§ Prior year data have been modified to reflect corrections identified after publication of previous report.
¶ 2007 was the first year we collected non-hazardous waste generation and recycling data. Data should be considered an estimate.
Merck has had a global waste manage- treatment of air emissions and solid waste The largest source of air emissions from
ment services vendor approval program incinerators. These combustion processes our manufacturing processes is solvent
since the late 1980s to ensure that the also result in emissions of nitrogen use, which is the primary component of
wastes we send offsite are managed in an oxides (NOX) and sometimes sulfur oxides both emissions to air of volatile organic
environmentally responsible manner. (SOX), depending on the fuels used. compounds (VOC) and Toxic Release
Emissions of NOX and SOX from Merck Inventory (TRI) compounds. Emissions
In 2007, we began to track our genera- facilities continued to trend downward, involving both of these parameters contin-
tion of non-hazardous waste. Based on with a seven percent reduction in NOX ued to decrease between 2006 and 2008.
the first two years of data, on average
we recycle approximately 44 percent of
the 27,000 to 32,000 metric tons of non-
hazardous wastes we generated annually.
from 2006 through 2008 and a 24 per-
cent decrease in SOX during the same
period. Energy conservation measures,
production variability and the closure
or sale of sites all contributed to the
Although our solvent emissions vary year
to year due to the nature of our business
and variability in the amount of solvents
required for different products, a large por-
tion of the decreases in air emissions were
43
AIR EMISSIONS decreases. The use of cleaner fuels further due to the closure of two Merck sites. It
The largest source of air emissions at our contributed to declines in SOX during is noteworthy that since 1996, Merck has
sites is CO2 from the production and that period. maintained its 90 percent reduction in
use of energy, and from other combustion TRI emissions from 1987 levels, despite
processes such as thermal oxidizers for Company growth.
IN ACTION
OUR VALUES
1 www.merck.com/newsroom/press_releases/corporate_responsibility/2008_0220.html
2 www.merck.com/newsroom/press_releases/corporate/2009_0415a.html
Advocacy and Outreach
As corporate political disclosure gains broad To make this disclosure more useful, companies
acceptance, the challenge for companies is to need to take a further step and ask associations
bring accountability to political spending by about the purpose, the recipients and the benefi-
their trade associations. Underwritten by their ciaries of their political expenditures. Companies
corporate members, associations are major politi- should include this information as a normal part of
cal players. A large share of corporate political their political disclosure. This would help compa-
spending is in fact done through associations. nies in evaluating the risks and benefits of their
However, the absence of disclosure of payments trade association participation. It would further
to or spending by associations on political activity enable companies to identify any conflicts between
means that much of this activity remains hid- their values and public policy objectives and those
den, even to their members. This secrecy is being of organizations that they support. Robust disclo-
peeled back as a growing number of companies, sure and accountability are critical for determining
including Merck, disclose their payments used for whether a company’s resources are being used to BRUCE F. FREED
political purposes. achieve political goals which the company may not
President, Center for
share and may even oppose.
Political Accountability
Japan, Australia, Korea, Taiwan, Malaysia worldwide. In 2008, our educational Pharmaceuticals Act in the U.S. and the
47
and Mexico. efforts have focused on preventing draft E.U. directive on counterfeiting
issuance of compulsory licenses and (see p. 31).
REGULATORY REFORM strengthening data protection.
Merck supported systemic changes TRADE AGREEMENTS
to improve the quality and timing of ANTI-COUNTERFEITING We have advanced increasing access to
regulatory review in Japan. In this way, We are working with numerous orga- innovative medicines in many coun-
we aspire to increase access to needed, nizations to raise awareness about the tries by supporting bilateral and multi-
new medicines. serious public health risks posed by lateral trade agreements that promote
counterfeit medicines, and to promote more open and transparent markets. For
INTELLECTUAL PROPERTY regulatory changes that will enhance example, Merck supported U.S. free trade
PROTECTION public safety. Merck supports efforts agreements with a significant number
Merck continues to defend strong to strengthen anti-counterfeiting laws, of countries and regions, such as Chile
intellectual property protections including the Safeguarding America’s and Central America.
IN ACTION
OUR VALUES
TRANSPARENCY corporate funds for political purposes. responsibility – discovering and devel-
Merck supports the creation of a uni- The Merck Board of Directors oping medicines and vaccines that make
form, U.S. national program for disclos- recognizes that the use of Company a difference in people’s lives and create a
ing certain financial relations between resources in the political process is an healthier future.
industry and physicians. In 2008, we important issue for shareholders. We
supported legislation that would have closely monitor our contributions to That is why we have begun to disclose
mandated such a system. In this spirit, political candidates and seek approval payment and grant information in a
we have begun to disclose payments to by the Company’s General Counsel number of areas across our business in
third parties. in the U.S., and report our spending the following areas:
regularly to the Board.
ENSURING OUR POLICY » GRANTS TO MEDICAL, SCIENTIFIC AND
AND ENGAGEMENT CONDUCT We perform periodic audits to assess PATIENT ORGANIZATIONS: Starting in
and enforce compliance with Company October 2008, Merck began report-
IS BEYOND REPROACH
policies, and Merck employees above ing grants over $500 provided by the
Our public policy and engagement
a certain level of responsibility are Company’s Global Human Health
practices are governed by numerous
required to certify annually their adher- division to U.S. organizations in
regulations worldwide and by Merck’s
ence to such policies. We are extending support of independent accredited
Code of Conduct (see p. 32). We also
certification in 2009 to require indi- educational programs for health-
adhere to the Center for Political
viduals involved in corporate political care professionals. In 2009, we have
Accountability’s (CPA) Model Code on
contributions in the U.S. to certify as expanded this disclosure to include
political contributions (www.political
to their knowledge of and adherence to other types of grants, including
accountability.net). We have engaged
the CPA Model Code, in addition to the grants to patient organizations and
with the CPA since 2007 to inform
other required Company certifications. other groups by Merck operations
discussions on best practices related
in Europe, Middle East, Africa and
to spending for political activities. In
MERCK TRANSPARENCY Canada. More on p. 36.
2008 we believe we were compliant
INITIATIVES: DISCLOSURE OF
in all material respects with all major
GRANTS AND PAYMENTS » PHILANTHROPIC GRANTS: Starting in
provisions of the guidelines. There
Merck believes that the best way to March 2009, Merck began reporting
48
were no reports of possible viola-
address the concerns, risks and questions all philanthropic grants made through
tions of state law related to corporate
facing our business and to build a foun- the Office of Corporate Philanthropy
political contributions.
dation of trust is to be more transparent and The Merck Company Foundation.
about the way we operate. By doing this, Merck will update this list annually
Additionally, we have long-standing
we are confident that we will continue providing a full 2009 report in the
policies governing the use of any
to succeed in our most fundamental first quarter of 2010.
Corporate political contributions (U.S., CAN, AUS) (US$)* U.S.: 597,775 470,625 611,975 337,140
AUS: 5,040 19,195 20,292 12,137
CAN: 30,965 58,396 45,765 46,700
Portion of dues that the major U.S.-based trade associations 6.8 paid to 6.9 paid to N/A N/A
report to us as being used for advocacy and/or political activities 8 groups 8 groups
in the U.S. where dues are >$50,000† (US$M)
Compliance with political contribution evaluation criteria used All 11 10 out of 11 N/A N/A
by the Center for Political Accountability principles principles
* Totals reflect corporate contributions; employee contributions through the Merck PAC are not included. Political contributions in the United States, which
are for state candidates, are always much greater in even-numbered calendar years, because that is when the overwhelming number of states hold their
elections for state legislatures and governors.
† Because the U.S. tax law that requires this reporting does not apply outside the United States, trade associations that are not subject to this do not provide break-
outs of lobbying expenditures from membership dues. Thus, at this time, Merck is unable to report these data for such lobbying expenses in other countries.
» PAYMENTS TO U.S.-BASED HEALTH- All Merck employees are required to For details on how we work with
CARE PROFESSIONALS: We sup- adhere to the Company’s high standards specific stakeholder groups to address
port broader disclosure of financial and act with integrity when interacting their expectations and concerns, go to
relationships between physicians with government agents or engaging www.merck.com/cr/stakeholders.
and the pharmaceutical industry. In in any conduct related to governmen-
2008, Merck endorsed the Physicians tal healthcare programs. This includes WORKING IN PUBLIC/PRIVATE
Payment Sunshine Act, mandating dis- ensuring that all information provided PARTNERSHIPS TO ADDRESS
closure of these financial relationships. to governmental entities is complete and SOCIETAL CHALLENGES
But even in the absence of a legislative accurate to the best of the employee’s Merck recognizes that leveraging the
requirement, we plan to voluntarily knowledge and belief. Our Code of expertise of all stakeholders can make a
disclose in the fourth quarter of 2009 Conduct also makes clear that no illegal sustainable difference in addressing key
all payments to U.S.-based healthcare payments of any kind are to be offered societal challenges. We have decades of
professionals who speak on behalf of or made, under any circumstances, to experience in developing public/private
Merck or our products. government or political party officials partnerships (PPPs) and have pio-
or candidates of any nation. neered far-reaching programs focused
» CORPORATE POLITICAL CONTRIBU- on improving global health, on health
TIONS: To improve access to informa- In addition to our own advocacy efforts, and science education, environmental
tion about Merck’s corporate political we are members of numerous industry protection and ethical business practices.
contributions in the United States, and trade groups. We work with them Our activities range from small col-
Merck annually posts the Company’s because they represent the pharmaceuti- laborations to global multi-stakeholder
contributions categorized by state, cal industry and business community initiatives; among these are the Merck
candidate and amount. Merck also and because they are important in MECTIZAN Donation Program, the
discloses any contributions to com- reaching consensus on policy issues. African Comprehensive HIV/AIDS
mittees known as 527 organizations. At times we may not share the views Partnerships, and the ROTATEQ
Beginning in 2009, we have expanded of our peers or associations, in which Access Partnership. These and many
this list to include corporate contribu- case our Company representatives will other of Merck’s numerous and varied
tions in Australia and Canada, the only ensure we voice our questions or con- public/private partnership efforts
other two countries where Merck cerns, or even recuse themselves from are discussed in detail throughout this
provides corporate contributions to specific activities. For a list of the major report and on our website.
candidates or political parties. associations we work with, go to:
www.merck.com/about/public_policy/ In 2009, we are requiring an annual
» MERCK POLITICAL ACTION COMMITTEE trade_association_membership/ progress and evaluation report for all
CONTRIBUTIONS: Merck provides an home.html. public/private partnerships to which
opportunity for eligible employees to we provide financial support.
participate in the political process by ENGAGING WITH
joining a nonpartisan political action OUR STAKEHOLDERS FUTURE GOALS
committee (PAC) that allows them Merck’s interactions with various stake- AND PRIORITIES
to pool their financial resources to holders are fundamental to our under- » In 2010, Merck plans to draft a new
support federal and state candidates. standing of – and response to – society’s model code of conduct for corporate
Except for administrative expenses,
49
expectations of our Company across political spending that includes both
the Merck Employees Political Action many dimensions of our global activities. the provisions of the CPA Model
Committee (Merck PAC) is comprised Throughout our operations, the process Code and additional provisions based
completely of funds voluntarily con- of dialogue and engagement informs and on internal policies and practices.
tributed by eligible Merck employees. guides our business strategy and decision
Merck publicly discloses all PAC making processes, and enhances the pub- » In 2010, we plan to disclose all of our
contributions in reports filed with the lic’s understanding of our business. memberships in U.S. state business-
Federal Election Commission. More at:
related associations, regardless of the
www.merck.com/about/publicpolicy. By actively engaging with our stakehold- size of the dues.
ers, taking responsible actions and main-
» DUES TO MAJOR U.S.-BASED TRADE taining our commitments, we believe we » In 2010, Merck plans to publish on
ASSOCIATIONS: In 2008, Merck began can build trust and support. Over time our website a list of policy positions
to disclose the portion of dues that this can reduce financial and other enter- being advocated within state legisla-
major U.S.-based trade associations prise risks and costs. We engage stake- tures in the U.S.
report to us as being used for advo- holders through financial and technical
cacy and/or political activities where support, and through dialogue to inform » In 2010, we plan to report on the
dues are >$50,000. debates constructively and to foster prog- number of PPPs for which Merck
ress toward solutions that benefit society has provided support and that report
More information on Merck’s dis- more broadly. We also have a long history annually against program objec-
closures of grants and payments at: of collaboration with patient groups tives and performance require-
www.merck.com/cr/grantsdisclosure. and health-related charities in areas that ments, including a measure of their
are relevant to our business. As part progress against the United Nations
of our efforts to increase transparency in Millennium Development Goals
our support of independent third parties, where applicable.
Merck has begun to disclose our support
of third-party organizations and indi-
vidual healthcare providers.
Executing the Basics
50 Merck supports productive dialogue and As a way of voicing their views on per- In 2007–2008, we established a formal
engagement with our shareholders, and has formance, some shareholders have asked CR governance function and process – a
a long-recognized track record of construc- for the ability to provide a non-binding new Office of Corporate Responsibility
tive interaction through ongoing discus- vote on executive compensation. Merck and a senior-level, cross-functional CR
sions and periodic meetings on key issues. believes this is unnecessary and not in Council responsible for the Company’s
the best interests of the Company and its CR approach. We defined our priority
shareholders, in view of the numerous ESG issues and developed metrics to
Independent Committee on Public Policy and Social Responsibility Yes Yes Yes Yes
Total compensation paid to employees/payroll excluding benefits (US$B) 5.03 5.56 5.14 4.84
launched the Global Constituency ENGAGING WITH OUR EMPLOYEES eliminated approximately 5,800 posi-
Groups (GCGs). The goals of the GCGs To keep in touch with employee tions in connection with both the 2008
align with Merck business priorities and perspectives about our culture, Merck restructuring program and its previously
support our corporate strategy (Plan to conducts an annual Culture Assessment announced 2005 restructuring program.
Win). There are ten distinct GCG teams that measures Merck’s progress toward In implementing these difficult but
including: Women; Men; Generational; becoming a high-performance orga- necessary actions, Merck is committed
Hispanic; Black; Asia Pacific; Native nization. This includes questions on to treating employees with fairness and
Indigenous; Lesbian, Gay, Bisexual, such topics as teamwork, capability respect. For more information, go to
Transgender (LGBT); Differently Abled; development, customer focus, ability to www.merck.com/cr/restructuring.
and Interfaith. The participants of the create change, strategic direction and
GCGs develop and support the strategic intent. In direct response to employee POSITIVE WORK ENVIRONMENT
initiatives that drive Company-wide feedback from our 2008 survey, the FUTURE GOALS AND PRIORITIES
culture change that builds upon the goal Company is including certain areas as » We want to score at or above the
of global interdependence and col- specific measures on our 2009 internal 75th percentile in each dimension of
WORKPLACE SAFETY*
2008 2007 2006 2005 53
Reportable injury rate (RIR) 1.10 1.12 1.11 1.21
» RIR change (%) –1.8 0.9 –8.3 –25.8
Lost-time incident rate (LTIR) 0.42 0.48 0.43 0.44
» LTIR change (%) –12.5 11.6 –2.3 –13.7
Fatalities 1 1 0 0
Motor Vehicle Safety
» Accidents Per Million Miles (APMM) 7.03§ 9.64 9.92 10.40
Capital Projects Construction Safety *,†
» RIR 1.05 1.45 0.92 1.12
» DART‡/LTIR 0.15‡ 0.39‡ 0.07‡ 0.15
» Fatalities 0 0 0 1
Number of U.S. employees who belong to a Merck fitness center 2,728 3,051 2,757 2,952
Number of U.S. employees who completed the Health Matters 2,140 1,877 N/A N/A
health assessment¶
54
We recognize our responsibility to
influence our suppliers and licens- workers and surrounding communities turers were deemed to be unacceptable
ees to respect human rights standards and the environment. due to environmental, health or safety
defined in the Universal Declaration of (EHS) issues.
Human Rights of the United Nations In recent years, we have concentrated
and the core labor standards set out by our internal manufacturing capabilities In 2007, we provided all of our exist-
the International Labor Organization. on core competencies and leveraged ing external manufacturers with our
Beginning in 2007, Merck’s Global external capabilities. This focus has, and guidelines, a statement of Merck’s
Procurement department introduced will continue to, shift some operations expectation that each supplier strive
a new Detailed Supplier Ethical historically conducted internally to our for continuous improvement, as well as
Assessment questionnaire for suppliers of external suppliers. We currently project the screening survey. We have received
new products and services globally. This that external manufacturers will eventu- completed surveys from approximately
assessment tool is used to help identify ally provide up to 35 percent of Merck’s 81 percent of them as of year end 2008
any significant ethical or human rights manufacturing volume. and are following up actively with the
concerns and is based on the ethics remaining companies. Starting in 2009,
parameters set forth in Merck’s Code of In this regard, external suppliers are we will begin to inspect existing sup-
Conduct known as Our Values & Standards. those external to Merck, not necessarily pliers, starting with the highest risk
If responses to the questionnaire raise external to the U.S. In fact, many of suppliers, to assess conformance with the
concerns, Merck will investigate further our external suppliers are located in the Pharmaceutical Industry Principles for
and may determine not to do business U.S. or are U.S. entities with manu- Responsible Supply Chain Management.
with the potential supplier. More at: facturing operations outside the U.S.
www.merck.com/cr/supplychain. In 2008, approximately 42 percent of When concerns arise from either sup-
Merck’s external manufacturing was plier survey responses or on-site inspec-
Our approach to supply chain manage- spent on external manufacturing opera- tions, Merck works with the supplier
ment aims to ensure the integrity of the tions conducted in the U.S. to understand the issue, establish an
supply chain, minimizing the risk that improvement plan, and offer technical
SUPPLY CHAIN MANAGEMENT » PERFORMANCE DATA SUMMARY 2005–2008
2008 2007 2006 2005
support if necessary to enable the sup- (LGBT) enterprises. We believe that in the program: Research, Information
plier to achieve the desired outcome. working with qualified suppliers from Technology, Construction, Professional
If an existing supplier does not show diverse segments of the business com- Services, Marketing, Direct Materials
improvement over a defined period munity supports our business objec- and Site Services.
of time, Merck may seek alternative tives and economic development in the
suppliers or discontinue work with the diverse communities that we serve. SUPPLY CHAIN MANAGEMENT
existing supplier. FUTURE GOALS AND PRIORITIES
In 2008, Merck expanded its supplier » We plan to increase supplier diversity
ENSURING CONTINUITY OF SUPPLY diversity program to the United Kingdom to 17 percent of total applicable spend
AMONG EXTERNAL MANUFACTURERS and Canada, where Merck is a char- in the U.S, and Puerto Rico by 2010.
Millions of people worldwide depend ter member of the Minority Supplier
» We plan to achieve 100 percent
on our medicines and vaccines every Development U.K. and a national
completion of pre-selection Detailed
day, many of which need to be avail- member of the Canadian Aboriginal
Suppliers Ethical Assessment by
able without interruption. To minimize Minority Supplier Council. Plans for
potential suppliers of new business
disruptions in the supply chain of raw further expansion to other countries are
globally by 2010.
materials, key intermediates, active underway. In addition, in 2008, we made
pharmaceutical ingredients or finished a supplier diversity commitment to reach » We plan to implement annual supplier
products, Merck manages its manufac- 14 percent of total applicable spend in supplemental ethics standards train-
turing network by assigning relationship the U.S. and Puerto Rico, and to increase ing for each procurement employee
managers to monitor supplier perfor- that number to 17 percent by 2010. by 2010, and develop a Supplier Code
mance, measuring supplier performance of Conduct by 2010.
against specific quality, supply, service, Our supplier diversity program also
» We plan to achieve 100 percent
cost and innovation metrics, and put- seeks to support the development of
completion of the EHS and human
ting in place plans to manage inventory qualified, diverse suppliers through
rights Screening Survey by existing
and capacity. a number of programs and external
external manufacturers of pharma-
efforts. In addition to providing coach-
ceutical intermediates and compounds
FOSTERING SUPPLIER DIVERSITY ing and feedback on performance, in
by end of 2009.
55
Merck is committed to diversity both in 2008, Merck launched Phase II of our
our workforce and among our suppli- Supplier Diversity Mentor/Champion » We plan to develop formal risk
ers. We cast the widest net in our search Program, through which we conduct mitigation plans, where required,
for talent, seeking qualified suppliers, supplier assessments and create joint for external manufacturers who
large and small, from all segments of development plans with the qualified, require improvements to conform
the business community. These include diverse suppliers that focus on increas- with the Pharmaceutical Industry
minority-, women-, veteran-, service ing supplier growth, competitiveness and Principles for Responsible Supply
disabled-veteran, HUBZone small sustainability. Suppliers in the follow- Chain Management.
and gay- and lesbian-owned business ing categories are currently enrolled
Philanthropy at Merck
56 our Company.
» Global Volunteering
57
In accordance with its commitment to Reduce Disparities in Diabetes – the Foundation donated $200,000
made in last year’s report, in March 2009 a new initiative to help reduce to the Nature Conservancy to build
Merck reported on its website charitable healthcare disparities related to dia- up natural protective marshlands
contributions made in 4Q2008 through betes among minority, low-income along both the Gulf Coast and the
the Office of Corporate Philanthropy and underserved groups in the U.S. New Jersey shoreline. The Office of
and The Merck Company Foundation.1 The Merck Company Foundation Corporate Responsibility and Global
Information provided on our website officially launched the initiative in Policy Support donated $64,855 in
includes the name of the organization, February 2009 (see box on p. 58). Merck medicines specifically to sup-
program name and description, and the port Hurricane Gustav relief efforts.
IN ACTION
OUR VALUES
Rx FOR HUNGER »
In response to the recent acceleration and expansion of a national where Merck has a major presence – and to organizations, such as
food shortage crisis in the United States, Merck has launched a com- Meals on Wheels Association of America and Witnesses to Hunger,
munity initiative to increase access to healthy foods and nutrition a Drexel University program. In addition, food drives were held at
and to support the food bank safety net for children and seniors in most major Merck facilities in the U.S. In February 2009, Merck – in
U.S. communities. Through contributions, volunteering, and con- partnership with the Healthcare Institute of New Jersey and the
ferences to speak out about the urgency of addressing the sharp Liberty Science Center – hosted the Rx to Fight Hunger conference –
drop of U.S. food supplies, Merck hopes to lessen the effects of mal- a no-cost, participatory conference for funders in the New Jersey,
nutrition and food insecurity on vulnerable individuals and families. New York, Pennsylvania and Delaware region, through which an
additional $400,000 was committed by other, non-Merck funders
To date, Merck has made more than $200,000 in financial contribu-
towards nutrition and hunger programs.
tions to local food banks and pantries – particularly in communities
IN ACTION
OUR VALUES
THE ALLIANCE TO REDUCE DISPARITIES IN DIABETES »
On February 25, 2009, The Merck Company Foundation launched Through a rigorous, competitive application process, the
a new initiative, The Alliance to Reduce Disparities in Diabetes Foundation selected five grantee programs from among the more
(www.alliancefordiabetes.org), in collaboration with the Centers than 190 applications received from around the United States.
for Disease Control and Prevention (CDC) and U.S. Department
The program sites are: Camden, New Jersey; Chicago, Illinois;
of Health and Human Services’ Office of Minority Health (OMH).
Dallas, Texas; Fort Washakie, Wyoming and Memphis, Tennessee.
Supported by a $15 million commitment through 2013, this initiative
Funding will support community-based efforts to decrease diabe-
is designed to improve healthcare delivery among those popula-
tes disparities and enhance the quality of health care by improving
tions most at risk for diabetes – African-American, Hispanic and
prevention and management services among low-income and
Native American adults in the United States. The Alliance will
underserved populations with a high prevalence of type 2 diabetes.
engage a range of healthcare stakeholders, including patients, pro-
viders and health system leaders, in supporting proven approaches The University of Michigan’s Center for Managing Chronic Disease
to comprehensive diabetes prevention and management. will serve as the Alliance Program Office and support the program
efforts of the grantee communities over the next five years as well as
provide leadership in building the Alliance as a national partnership.
CHAMPIONS FOR 40 different high schools how to protect review boards; others host neighbor or
THE ENVIRONMENT and conserve the area’s lush natural “town hall” meetings to seek input from
Through the Champions for the habitat. The center hosted educational communities on key developments. Sites
Environment program, Merck provides workshops and volunteers were involved also use community surveys and focus
grants for environmentally focused and in activities such as building footpaths, groups with fenceline neighbors and
educational projects. Successful proj- establishing a medicinal garden, planting employees to assess community interests,
ects have another key element: Merck trees and putting up interpretive signage concerns and needs. Based on the input,
employee volunteers work alongside featuring local flora and fauna. Merck seeks issue-specific proposals
community volunteers to accomplish developed by community organiza-
CHINA – Employees at Merck’s
the projects. Since the program’s incep- tions to address those needs, taking into
Hangzhou, China facility helped
tion, Merck employees have “cham- account the impact of a problem on the
“Green Zhejiang,” a youth volunteer
pioned” hundreds of projects – and local community, the urgency of the issue
group, select and implement proposals
volunteered thousands of hours on behalf and the resources available to address the
for creating environmentally-friendly
of local non-profit partners, including problem. Proposals are reviewed by local
communities in the city. The project was
schools, local government and environ- site philanthropy committees, based upon
inspired by China’s “Green Olympics”
mental and youth organizations. Projects uniform guidelines and funding criteria,
campaign to integrate environmentally-
focus on a range of community-based which make funding recommendations
friendly concepts into the venues for the
environmental needs such as wildlife to Merck. The NOC program follows
2008 Olympics.
habitat preservation, stream cleanups Merck’s philanthropic guidelines, but rec-
and bank restoration, phytoremediation, ognizes that our stakeholders value other
NEIGHBOR OF CHOICE
energy conservation and climate change, educational, civic, art and cultural, and
58
Through the “Neighbor of Choice”
and recycling and resource conservation. environmental programs and therefore
(NOC) program, Merck demonstrates
these are considered for funding under
its sensitivity and responsiveness to the
The following is a representative sample the NOC program.
specific concerns and needs of local
of Merck’s 2008 Champions for the
communities in which we operate.
Environment programs: The following is a representative sample
of Merck’s NOC programs:
U.S. – Triangle Land Conservancy (TLC) The NOC program, which Merck
is the local non-profit land trust for the developed in the mid-1990s, is based U.S. – In Harrisonburg/Rockingham
Triangle region of North Carolina. upon three fundamental principles: County, Virginia, a grant from
Merck’s Champions for the Environment Merck’s NOC program supports the
» Listen to and identify the com-
grant helped TLC conduct biological Harrisonburg-Rockingham Free Clinic,
munity’s essential needs, issues
inventories, create management plans, which provides outpatient health
and concerns;
and perform other duties as part of services to the uninsured. The grant
TLC’s mission to care for the natural » Respond appropriately to these needs, specifically supports the Pharmacy and
areas of the region. Merck employee issues and concerns; Medication Assistance Program, which
volunteers from our Durham facility provides free medications and supplies
» Establish and develop relationships
were stewards of the properties by clean- to all Free Clinic patients.
of trust with community groups
ing up litter, establishing boundaries and
and individuals. MEXICO – Merck employees and parents
access barriers, and posting signage.
of children at three public schools
COSTA RICA – A team of Merck volun- At the heart of the NOC program is near the Merck manufacturing site – a
teers helped the Tropical Sierra Foundation relationship building. Merck facilities kindergarten, an elementary school and
turn the area of Monte de la Cruz, develop culturally appropriate mecha- a special education school – are work-
San Rafael de Heredia Costa Rica into nisms to engage and build relationships ing together on a project in which the
an outdoor environmental education with their community stakeholders. schools are being painted, play areas
center designed to teach children from Some sites have created community and classrooms are being repaired and
IN ACTION
OUR VALUES
EMPLOYEE VOLUNTEERING »
In January 2009, Merck initiated a Global Volunteering policy
encouraging individual employees and teams of employees to
become involved in appropriate volunteering activities in Merck
communities. Under this policy, eligible Merck employees may
receive up to 20 paid work hours per calendar year to volunteer.
Merck volunteers address a variety of societal challenges, from
HIV education in Brazil, “Roll Up Your Sleeves” in the Netherlands,
“Lend a Hand” in Malaysia and “Clean Up Australia Day,” to
an award-winning pro-bono legal assistance program in the
United States and “Community Days” in the Philippines. To date
Merck employees across 26 sites have volunteered close to
50,000 hours in community volunteer projects. To read about these
local programs, go to www.merck.com/cr/employeegiving.
enhanced, handrails are being installed to FUTURE GOALS We recognize that measurable goals
improve safety, and other improvements AND PRIORITIES with reasonable timeframes for success
are being made. Through Merck philanthropy and part- will help Merck understand how it
nerships with the non-profit community, can best create shared social and busi-
SPAIN – Merck made a NOC con-
we plan to continue to address access to ness value.
tribution to support the Rainbow
Foundation – a social and economic health care for underserved populations, » Expand our global volunteering
growth initiative in Madrid that employs strengthening science education oppor- program to include skills-based place-
people with disabilities at a center that tunities, support for innovation, and ment to help develop our employ-
specializes in the packaging of diverse critical quality of life issues. We will also ees’ skills and talents, and to help
goods. With this grant, the Rainbow strive to achieve the following goals: strengthen the non-profit sector.
Foundation was able to purchase a » Incorporate “best practices” and con- » Drive more in-depth relationships
cellophane banding machine, install an tinue to make our grants and grant with employees, community organiza-
assembly line and start-up the operation. making processes transparent, integrat- tions and partners who share a com-
In addition, the Rainbow Foundation ing Merck’s guiding principles, values mon interest in charitable work.
was able to expand its activities by hir- and philanthropic priorities.
ing 12 new employees.
» Improve evaluation approaches by
incorporating performance measure-
ment tools into appropriate programs.
59
CONTRIBUTIONS » DATA SUMMARY, 2005–2008 » (US$, MILLIONS)
2008 2007 2006 2005
Merck’s philanthropic contributions (Total cash and product) 821 828 826 1,039
Cash contributions 55 62 58 60
Product donations through Merck Medical Outreach Program and the 592 605 442 437
MECTIZAN Donation Program
Product donations through U.S. Patient Assistance Program* 174 161 326 542
* Decline due in part to an increasing number of patients with prescription drug coverage, including Medicare Prescription Drug Program; another
contributing factor to usage decline was the removal of one Merck product – FOSAMAX – from the product list in mid-2008 (six months after patent expiry)
once patients had broad access to lower-cost generic equivalents.
ENDNOTES
SECTION
1 www.merck.com/corporate-responsibility/docs/TMCF_Grants_Trans_Report-4Q08.pdf
KEY PERFORMANCE INDICATORS
Economic indicators
Sales (US$M) 23,850.3 24,197.7 22,636.0 22,011.9
Annual cash dividend paid per share (US$) 1.52 1.52 1.52 1.52
Global tax expense as reported on income statement 1,999.4 95.3 1,787.6 2,732.0
(US$M)[a]
Researching new medicines and vaccines to address unmet needs
Merck’s investment in R&D programs (US$B)[b] 4.8 4.9 4.8 3.8
Number of new products approved (Number of products 1 (47) 2 (49) 5 (57) 2 (58)
in pipeline [Phase I–III] and under regulatory review)
Percentage of top 20 global burdens of illness addressed by 53 60 N/A N/R
our products and pipeline (as defined by WHO and excluding
accidents, premature birth and self-inflicted injuries)[c]
Phase II–V clinical trials initiated (in number of countries)[d,e] 36 (62) 45 (54) 43 (49) N/R
Manuscripts of clinical trial results and related papers 235 172 172 N/R
submitted to peer-reviewed journals
Improving access to medicines, vaccines and health care
Number of Merck products for which not-for-profit 6 6 2 2
prices are offered to least developed countries
Number of patients on Merck ARV therapy – all formula- 653,867 (76) 763,118 (91) 701,391 (93) N/D
tions, all products (Percentage in the developing world)
Percentage of total patients on Merck ARVs estimated to 17 15 19 N/D
be children taking pediatric formulations of Merck’s ARVs
Number of countries where Merck has committed to 72 72 N/R N/R
not-for-profit prices for ROTATEQ and GARDASIL
Number of low- and middle-income countries using 16 11 N/R N/R
Merck’s vaccines in their public sectors
Number of new country registrations of GARDASIL and 18 (196) 72 (178) 105 (106) 1 (1)
ROTATEQ globally (and cumulative to date)[e]
Product donations (US$M) (% in the developing world)[f] 766 (77) 766 (79) 768 (58) 979 (45)
Millions of treatments approved for river blindness 174.2 128 118 114
through the MECTIZAN Donation Program
12
350,000 (161.5)
13
540,240 (326)
12
730,000 (502)
10
KEY
N/A: Not applicable. N/D: No data. N/R: Not reported; many of these indicators are new for Merck and for this reason some prior year data points are not reported.
[a] Amounts from 2008 include a gain on distribution from AstraZeneca LP, a gain related to the sale of the Company’s remaining worldwide rights to Aggrastat, the favorable
impact of certain tax items, the impact of restructuring actions, additional legal defense costs and an expense for a contribution to The Merck Company Foundation.
[b] Research activities and investments include all Merck divisions.
[c] The decrease in 2008 is due mainly to the changing nature of the Global Burden of Disease as defined by WHO.
[d] We have modified this KPI from last year to report clinical trials initiated vs. clinical trials conducted.
[e] Prior year data have been adjusted due to a change in methodology.
[f] We value our product donations based on the U.S. wholesale price. The decrease in product donations is due in part to declining patient enrollment
in our Corporate U.S. Patient Assistance Program, attributed in part to an increasing number of patients with prescription drug coverage, including
through the Medicare Prescription Drug Program, which began in January 1, 2006. Figure includes Merck Medical Outreach Program (including ACHAP),
MECTIZAN Donation Program, and Merck U.S. Patient Assistance Program.
[g] Totals include the U.S. Merck Vaccine Patient Assistance Program and are based on the U.S. wholesale price. Decrease in numbers due in part to
increasing number of patients with prescription drug coverage, including Medicare Prescription Drug Program.
[h] Major is defined as with an investment by Merck of more than $500,000 per year and/or engagement with a national government. Therefore, in 2008 these included ACHAP,
AAI, C-MAP, Diabetes Alliance, GARDASIL Access Program, MCAN, MDP, MISE, MMOP, MVN-A, ROTATEQ Access Program and the UN Foundation Measles Initiative.
[i] When Merck substantiates allegations of ethical misconduct, it imposes a variety of disciplinary actions on those responsible for the misconduct, such as
dismissal from the Company, issuance of final written warning letters and financial penalties.
[j] The increase in the number of environmental events is due primarily to a modified Pennsylvania Department of Environmental Protection interpretation
in late 2006 that resulted in reporting of spills, such as chilled water spills into storm water drains, that were not previously required to be reported.
[k] Reflects a significant environmental settlement ($1,575,000) paid in early 2008 associated with three spills that occurred in 2006.
[l] In accordance with US EPA Climate Leaders Protocol, GHG generation baseline data have been adjusted to remove facilities that have been sold.
[m] Data unavailable for a site sold at the end of 2007.
[n] Prior year data have been modified to reflect corrections identified after publication of previous report.
[o] 2007 was the first year we collected non-hazardous waste generation and recycling data. Data should be considered estimates.
[p] Totals reflect corporate contributions. Employee contributions through the Merck PAC are not included. Political contributions in the U.S., which are for state
candidates, are always much greater in even-numbered calendar years, because that is when most states hold their elections for state legislatures and governors.
[q] Because the U.S. tax law that requires reporting does not apply outside the United States, trade associations do not provide break-outs of lobbying
expenditures from membership dues. Thus, Merck is unable to report this data in other countries. This line includes dues for advocacy purposes for
major U.S. national and regional associations where dues are $50,000 or more.
[r] Survey not conducted prior to 2006.
[s] Overall turnover includes all types of turnover including restructuring.
[t] LTIR/RIR: Calculated per OSHA methodology.
[u] Change made in definition of accidents to include only business-related accidents.
[v] We no longer report percentage of facility visits conducted of potential manufacturers of new business as our screening surveys are adequate for
exploratory purposes. We have, therefore, removed the percentage of facility visits from our list of KPIs.
(w) Survey first conducted in 2007.
OUR MEDICINES AND VACCINES
* COZAAR and HYZAAR are registered trademarks of E. I. DuPont de Nemours, Wilmington, Delaware, U.S.A.
† TREDAPTIVE is to be marketed under the trademark CORDAPTIVE in Latin America.
‡ VYTORIN (marketed as INEGY outside the United States) and ZETIA (marketed as EZETROL outside the United States) are trademarks of and are marketed through a partnership known
as MSP Singapore Company LLC.
§ ATRIPLA is marketed by and is a trademark of Bristol-Myers Squibb and Gilead in the United States, Canada and Europe. Merck and Gilead are working to register and distribute
ATRIPLA in 106 developing countries around the world.
¶ Efavirenz is marketed by Bristol-Myers Squibb as SUSTIVA in the United States, Canada and certain European countries, and by Merck in the rest of the world as STOCRIN.
\\ Tafluprost is marketed by Santen Pharmaceutical Co., Ltd. in Germany, Eastern Europe and Northern Europe under the trademark of TAFLOTAN®, and in Japan under the trademark of TAPROS®.
** TIMOPTIC-XE is a trademark of and marketed by Aton Pharma, Inc. in the United States.
INDEX
A E M Public/private
Accelerating Access Initiative 24 Economic contribution 4 Marketing practices 34,36 partnerships 17,19,20,23,24,27,49
Access to medicines, vaccines Effluents 42–44 Manufacturers, external 54,55 developing world 20
and health care 1,2,16–27,49,56,57 Emissions 7,38–45 Materiality assessment process 3 HIV and AIDS 24
developed world 25–27 Employees 4,5,32–36,51–54,59 Merck AdviceLine 34 scientific 20
developing/emerging countries 19–25 communications and engagement 52 Merck Alliance to Reduce U.S.-based 27
partnerships 19–27,49,56,57 compensation and benefits 51 Disparities in Diabetes 27,58 vaccine demonstration projects 23
policy 16–18 development and training 51 Merck BioVentures 6,11 Q
priorities and goals 21,23,25,27 health and safety 52,53 Merck Childhood Asthma Network 27 Quality, of products 30,31
strategy 16 rights 36 Merck Company Foundation, The 48,56,57 R
Access to volunteering 59 Merck Institute of Science Regenerative medicines research 11
Medicines Index Inside front cover,2 Energy use 38–42 Education (MISE) 14,15 Registration of products 17,18
Adverse Experience Reporting 29,30 Environmental footprint 38–45 Merck Manuals 26 Remediation, environmental 44
Advertising of medicines (DTCA) 36,48 EPA Climate Leaders 40 Merck MECTIZAN Donation Renewable technologies/resources 38,39,45
African Comprehensive Ethical business practices 6,32–37,48 Program 2,6,18,19 Research and development 8–15
HIV/AIDS Partnerships 25 Guiding Principles for Ethical Business Merck Medical Outreach Program 18,21 agenda and strategy 8
Alzheimer’s 8–10,12 Practices with the Medical and Merck medicines and governance 8
Animal research 11 Scientific Community 35 vaccines list Inside back cover impact and performance 9,10
Anti-counterfeiting 28,29,31,47,54 training and development 33 Merck mission and values Inside front cover pipeline chart 10
Awards and recognition Inside back cover resources for employees 34 Merck Sharp & Restructuring program 52
B Executive compensation 50 Dohme (MSD) Inside front cover Revenue, by region 5
Biosimilars 6,11,46 F Merck Vaccines Network– Risk assessments, environmental 44
Board independence 50 Financial information 4 Africa (MVN–A) 23 ROTATEQ Access Partnership 23
Millennium Development
C Financial support disclosures 36,48,49
Goals Table of contents,20
S
Capacity-building, healthcare 1,16,20 Flexible work arrangements 52 Safety, of employees 53
Carbon Disclosure Project 40,41 G N Safety, of products 28–31
Carbon footprint 41 GARDASIL Access Program 6,23 Nanotechnology 45 post-marketing studies 28–30
Center for Political Accountability 46,47,48 GARDASIL safety 30 Neglected tropical diseases 6,12,16,20,21 Science education 14,15
Champions for the Environment 58 GAVI Alliance 6,20,23 Neighbor of Choice 58,59 SINGULAIR safety 30
Charitable grants 57 Genetic research 11 Notices of Violation 39,40 Solar power 41
China-MSD HIV/AIDS Partnership 24 Global Reporting O Stakeholder engagement Inside front cover,
Climate change 1,40,58 Initiative (GRI) Table of contents, Office of Ethics 33 1,3,46,47,49,58
Climate Resolve 40 Inside front cover Ombudsman Program 34 Stockholders/shareholders 4,50
Clinical trials 4,6,12–15,28 Good Clinical Practices Our Values and Standards Supply chain 6,7,29,30,37,54,55
disclosure policy 13 (GCP) Guidelines 13,28 (Code of Conduct) 32–37,54 continuity of supply 55
registration and registries 13 Good Manufacturing Practices (GMP) 29,30 P diversity 55
Code of Conduct 7,8,13,32–37,47,48,49,54 Green chemistry 39,42,44 Pandemic preparedness 18,53 ethics and human rights 37
Community, supporting 5,56–59 Greenhouse gases 1,2,7,38–42 Patient Assistance Programs 1,18,26,27,36 quality 30
Compensation and benefits 51 H Patents 10,18 management 37–39,54
Compliance 6,28,32–36,38,39,47,48 Hazardous waste 42,43 Pediatric formulations/ T
environmental and safety 38,39 Healthcare reform 1,6,25–26,46,47 indications 10,12,13,24 Tax expense 4,5
marketing and sales 34–36 Health information 26 Pharmaceutical Research and Trade agreements 47
Contract Research Organizations 13 Health insurance coverage 25,26,47 Manufacturers of America 14,35,36,48 Transparency Inside front cover,
Continuing Medical Education 36 Health literacy 24,52 Code of Interactions with 1,2,4,36,47–49
Corporate Governance 50,51
Corporate responsibility
Health Matters 53 Health Care Professionals 35 U
HIV/AIDS 6,12,14,18,23–25 Guiding Principles on Direct- UNCF/Merck Science Initiative 15
approach Inside front cover,3,46 partnerships 24,25 to-Consumer Advertisements UN Global Compact Table of contents,
about the report Inside front cover product pricing 18 about Prescription Medicines 36 Inside front cover,1,2,5,36
Board of Directors’ PPSR Committee 2,51,56 public policy 25 Principles on Conducting Clinical Uninsured people 26,27
CR Council 3,50 research and development 12,14,21 Trials and Communication of
integration in our Human rights 36,37 Clinical Trial Results 48
V
business principles Inside front cover,1,2 Vaccines and immunization 22,23
business and 37 Pharmaceuticals in the environment 44,45
reporting approach Inside front cover of employees 36 Philanthropy 56–59 W
D right to health 37 Pipeline 4,6,9–11 Waste and waste reduction 38,39,42–44
Developing world 6,12,19–25 Political contributions 7,47–49 Water use 42
I
access to medicines 19–25 Post-marketing studies 28–30 Work-life effectiveness 52
Informed consent 13
diseases 12 Predictive Safety Testing Consortium 12 World Health Organization 17–21,34
Injury and Illness Rate 7,53
partnerships 20,23,24 Pricing 1,17,18,25 Ethical Criteria for Medicinal
Innovation 8–11,14,18,20,37,46
public policy and advocacy 21 Products 63 Drug Promotion 34
Intellectual property protection 18,27,47
research initiatives 12,20 labeling and information 29,30 Guidelines for Drug Donations 18
Interactions with
Disaster relief 21,57 packaging 16,39,43,44 prequalification of medicines and vaccines 17
healthcare professionals 6,34–37,48
Diversity and inclusion 51–52,55 registration 17,18 Special Program for Research and
K
supplier diversity 55 safety 5,6,28–31 Training in Tropical Diseases 20
Key Performance Indicators (KPIs) 60–62
Dividend 4 stewardship 44
Donations 18,21,56–59
L Public policy 11,13,21,25,46–48
Labor relations strategy 37
Product 18,21 access in the developing world 21
Licensing 6,10,11,18
Cash 57–59 HIV and AIDS 25
Lost-Time Injury and Illness Rate 7,53
WHO Guidelines 21 research and innovation 11,13
Awards and Recognition
Merck has received recognition for our commitment and performance worldwide on various aspects of our corporate responsibilities,
including the following:
» Dow Jones Sustainability Indexes – Merck has been placed on the Dow Jones Sustainability North
America Index, which is based on a thorough analysis of corporate economic, environmental, and social
9 10
performance. The North American Index captures the leading 20 percent in terms of sustainability out
of the largest 600 North American companies. (2009)
» FTSE4Good – Merck is a FTSE4Good constituent member. The FTSE4Good Index Series has been
designed to measure the performance of companies that meet globally recognized corporate responsibility
standards. (2008, 2009)
» KLD Research and Analytics – In 2008 Merck was a member of the Domini 400 Social Index, KLD Global
Photography from Bob Burgess (Weinberg), Michelle Frankfurter (Cook), Merck Visual Communications and Lamine Smaali (Kloiber) Writing support: Zoe Bell Consulting
Sustainability Index, KLD North America Sustainability Index and the KLD Select Social Index. In 2009
Merck is a member of the FTSE KLD US All Cap Sustainability Index (USSA), FTSE KLD 400 Social Index,
FTSE KLD US Large Cap Sustainability Index, FTSE KLD US Large-Mid Cap Sustainability Index
and FTSE KLD Select Social Index. The FTSE KLD indices measure companies’ environmental, social and
governance (ESG) performance.
» Access to Medicines Index – Ranked Merck No. 3 on its inaugural Index, which assesses and ranks the world’s
20 largest pharmaceutical companies based on various criteria around global access to medicines. (2008)
» Corporate Responsibility Officer Magazine – Ranked Merck No. 4 on the 10th Annual 100 Best Corporate
Citizens List. The tenth annual list rates companies on their performance in seven key areas: environment,
climate change, human rights, philanthropy, employee relations, financial and governance. (2009)
» DiversityInc – Ranked Merck No. 8 in its annual list of the “Top 50 Companies for Diversity” marking the
Company’s seventh consecutive appearance on the list. (2008)
» Environmental Protection Agency (EPA) – Recognized Merck with the 2009 ENERGY STAR Sustained
Excellence Award for continued efforts to protect the environment. Merck, an ENERGY STAR partner since
2004, has been recognized by the EPA for four consecutive years – twice as Partner of the Year and twice
for Sustained Excellence. (2009)
For a full listing of past awards, recognition and index memberships go to www.merck.com/cr/awards.
Environmental Savings
Based on 5,100 lbs. of Mohawk Via Cool White 100% PC Recycled Paper, actual environmental savings are as follows:
Or write to us at:
Merck & Co., Inc.
Office of Corporate Responsibility
WS 2A-55
1 Merck Drive
PO Box 100
Whitehouse Station, NJ 08889
USA
GEN-2009-WS10024-PU