Our sales and marketing practices are governed by external laws, regulations and industry codes of conduct; as well as by our global Code of Conduct, business practices and compliance program.

These practices are monitored and enforced to ensure that our interactions with customers and consumers help inform their decisions accurately and in a balanced manner. We believe that compliance, in letter and spirit, with all policies governing scientific, business and promotion-related activity is a corporate and individual responsibility of the highest order. Our ethical behavior will ensure that scientific information predominates in prescribing decisions.

US PhRMA Code Compliance

Inappropriate promotional activities have been criticized as having an undue influence on physician prescribing. In addition, some have expressed concerns over the way pharmaceutical companies provide information to healthcare professionals and consumers. Merck's longstanding Code of Conduct, business practices and compliance program have sought to address and pre-empt inappropriate practices. We are constantly evaluating and revising our policies and practices. Over the past several years, the pharmaceutical sector as a whole has recognized that more needed to be done to address concerns raised by public officials and stakeholders in the healthcare community.

The revised PhRMA Code, issued in 2008, strengthened the standards that govern the industry's sales and marketing practices in the United States and ensures that companies have adequate policies and procedures in place to comply with the Code.

Key Components of the PhRMA Code

Among the key requirements of the Code is an annual requirement for company CEOs and chief compliance officers personally to certify that they have processes in place to comply with the Code. In addition, the new Code encourages companies to obtain third-party verification of their compliance policies and procedures. Merck completed self-certification of our compliance policies and procedures in early 2009 and 2010.

Other requirements of the Code had previously been incorporated into Merck's already-strong ethical practices. For example, Merck follows the standards for commercial support of Continuing Medical Education established by the Accreditation Council for Continuing Medical Education (ACCME), and Merck's compliance program already requires that company representatives be periodically assessed to ensure that they comply with relevant company policies and standards of conduct.

In response to the Code changes, Merck updated our policies and practices in the United States to ensure that professional sales representatives and their immediate managers do not provide physicians with meals outside of physician offices or hospitals, other than through speaker programs. We believe that these actions improve transparency and strengthen the standards for our marketing practices, represent progress for the pharmaceutical industry as a whole, and are a necessary step to restoring confidence in the industry.