Merck is leading the way to a healthier future with products that touch the lives and improve the well-being of people and communities around the world. Our product portfolio is among the broadest in the healthcare industry. As a leader in global healthcare, we are committed to addressing critical social, environmental and economic challenges to ensure not only the vitality of our business, but also the health of our world.

That’s why innovation and corporate responsibility are at the core of our business strategy and activities. We develop breakthrough medicines and vaccines that tackle unmet medical needs, we adopt positions and advocate for changes that will improve access to these products, and we find new ways to do the right thing for our constituents. This is particularly important today, because we live in a resource-scarce environment. Every dollar, every dosage and every drop of water count. The healthcare system is under constant strain, trying to provide optimum care to more people while reducing costs.

To meet these challenges while achieving our business goals, we rely on the integrity, knowledge, skill and collaboration of Merck colleagues globally. Together, we strive to create an environment of mutual respect and opportunity, even as the company faces global workforce reductions. We remain true to our commitment to act responsibly and with even greater transparency.

In addition to making substantial progress in meeting our business objectives, we launched several significant initiatives in 2011, as well as a new corporate responsibility framework in 2010. For example, as part of our commitment to ensure access to healthcare worldwide, we established a new Research & Development headquarters in Beijing, China, focused on innovative drug discovery and development. Building this new facility in China will enable us to complement our existing R&D capabilities, and facilitate new collaborations with scientists in the region and across emerging markets.

We are looking forward to celebrating the twenty-fifth year anniversary of Merck’s MECTIZAN^® (ivermectin) Donation Program, the longest-running donation program of its kind, with the goal of eliminating river blindness, a leading cause of preventable blindness, and lymphatic filariasis, more commonly known as elephantiasis. Building on this legacy of tackling urgent global health challenges such as river blindness, HIV/AIDS and hepatitis, in September we launched “Merck for Mothers,” a long-term effort with global health partners to help create a world where no woman has to die from preventable complications of pregnancy and childbirth. This initiative applies our scientific and business expertise to making proven solutions more widely available, developing new technologies, and improving global public awareness about maternal mortality.

Our current corporate responsibility progress constitutes steps along a journey, accelerated by our unwavering commitment to expand access to healthcare, work toward true environmental sustainability, employ a diverse workforce that values collaboration and operate with the highest standards of integrity. We have an exciting pipeline of new medicines and a growing presence in emerging markets. By staying focused on scientific innovation and responsible business practices, we expect to continue making strides, in partnership with our many stakeholders, while delivering value to our shareholders, customers and patients. We know that our ability to advance human health owes much to listening and working with others who share the same goal. We welcome you to join us on this path toward a healthier future.

Be well,

Mr. Kenneth C. Frazier
Chairman and CEO
August 2012