Dear Stakeholders,

Companies that expand their view of value beyond short-term financial gain to include the well-being of their employees, customers and society are creating "shared value". I couldn't agree more with this perspective.

But what does this mean for Merck? How does Merck grow as a profitable business and continue to provide the greatest benefits to patients and communities?

The answer is clear but challenging: focus the company's competencies and capabilities on delivering shared value — the ability to innovate in biomedical science for the benefit of patients and grow the business, while integrating corporate responsibility into every area of the organization.

This proposition is embedded in the four pillars of our new corporate responsibility framework, which we believe will make Merck even better at what it already does well:

• Expanding global access to healthcare
• Integrating environmental sustainability into every aspect of the business
• Demonstrating Merck's concern for the diversity and well-being of its employees
• Demonstrating the highest standards of ethics and transparency in all of its actions

We see it through Merck's industry leadership with innovations to address HIV/AIDS, cardiovascular disease, and vaccine-preventable diseases. We see it through the programs and partnerships that bring our medicines and vaccines to those who don't have access but need them the most. Our work, for example, to reduce the incidences of cervical cancer around the world and our program to eliminate river blindness reflect not only Merck's value as a leader in innovative healthcare but also its social responsibility values in action. Good for business, good for society.

To make sure the framework becomes a fundamental component of Merck's culture, the company has developed a set of key performance indicators that will allow us to measure our progress within these four focus areas.

On behalf of the Board, I look forward to helping a stronger and more formidable Merck continue to create shared value — to stay ahead of the evolving demands of global business by being competitive, ethical, innovative, and committed to the idea that, more than ever, good citizenship makes good business sense.

Sincerely,

Thomas E. Shenk, Ph.D.
Chair, Merck Board Committee on Public Policy and Social Responsibility
September 2011