In 2010, after having successfully completed our merger with Schering-Plough, Merck took the opportunity to reassess our corporate responsibility efforts and focus on a more strategic approach that is linked directly to our core business drivers. Our corporate responsibility materiality assessment was based on prior assessments but included more precise criteria in certain areas: business relevance; satisfying stakeholder demands; opportunities for improvement; and areas of potential leadership.

Based on this analysis, an overall set of issues was presented to the Public Policy and Responsibility Council for a final materiality assessment. After review, key issues were identified through a consideration of numerous sources, including:

• Merck corporate plans, objectives and strategies
• Company policies and initiatives related to company policies
• Employee surveys and other input from employees
• Customer feedback obtained through focus groups and other methods
• Shareholder resolutions and other feedback received through ongoing dialogue with shareholders
• Input from investors and investor groups committed to sustainable investing
• Partners, nongovernmental organizations, suppliers and other stakeholders
• Media coverage
• Stakeholder feedback on prior corporate responsibility reporting
• Industry benchmarking
• The Global Reporting Initiative (GRI), Access to Medicine Index, the UN Global Compact principles and other guidelines

The key issues in this report have been approved by Merck's Public Policy and Responsibility Council based on the three parameters used to define and determine materiality for the purpose of our corporate responsibility reporting:

1. Impact on Merck's ability to achieve its business strategy

2. Level of concern to external stakeholders

3. Degree to which Merck can control and influence the topic or issue

As part of our stakeholder engagement process, we review the suggestions and expectations of our stakeholders to ensure that we are reporting on issues that are of most relevance to them, as compared with those identified through our own evaluations. In this way, we can determine the areas of our corporate responsibility approach that require further review and identify issues that we might clarify in the future.

Merck recognizes the importance of issues that may not be within the company's immediate or total control, such as climate change, global poverty and access to medicines, particularly in the developing world. We believe that we can, however, influence progress in these areas by addressing these issues, particularly through public policy and advocacy or through partnerships with others.

Merck has received positive feedback from external stakeholders on our materiality assessment process. We will continue to use this process and seek additional feedback in order to further refine our key corporate responsibility issues in future reports. We also anticipate that our process will evolve as we learn from experience and from continued dialogue with our stakeholders.

Our next report will include an interactive materiality index that outlines the issues that are most important to our stakeholders and how we are prioritizing them internally.