Merck is committed to seeking additional ways to reduce the cost of our antiretrovirals (ARVs) for people living in the world's poorest countries and those hardest hit by the epidemic, including through working with external manufacturers and suppliers to achieve incremental efficiencies.

For ISENTRESS^® (raltegravir), Merck has established a low-cost supply chain with generic partners for the commercialization of ISENTRESS in all Low Income countries and all sub-Saharan Africa. This supply chain is being registered in these countries. The implementation of this supply chain has allowed us to reduce the price of ISENTRESS from $3.05 per day to $1.85 per day in these countries. We are committed to reviewing this price regularly.

In June 2011, Merck granted two nonexclusive licenses to two Indian generic manufacturers, Emcure Pharmaceuticals Ltd., and Matrix Laboratories Ltd., for the manufacture and commercialization of raltegravir in 60 Low Income and sub-Saharan African countries. In addition, Merck has granted royalty-free licenses for efavirenz to six South African generic manufacturers.

Manufacturers to whom Merck has granted a royalty-free voluntary license for efavirenz include:

• Emcure Pharmaceuticals S. Africa and Arrow Pharma S. Africa—Joint license granted in 2011
• Sonke Pharmaceuticals—License granted in 2009
• Aspen Pharmacare—License granted in 2008
• Aurobindo Pharma—License granted in 2008
• Cipla Medpro—License granted in 2008
• Adcock Ingram Healthcare—License granted in 2007

Patent Pool for HIV Medicines

Merck, in principle, supports the objectives of the Medicines Patent Pool Foundation for expanding access to HIV medicines. Merck has demonstrated its commitment to improved access to HIV medicines through longstanding efforts over many years, including differential pricing, voluntary licensing, public-private partnerships, philanthropic programs, and continued research and development efforts in HIV.

While we continue to monitor and assess the Medicines Patent Pool proposal, Merck's immediate focus is on implementing our access strategy for ISENTRESS in Low Income countries and sub-Saharan Africa as part of our ongoing efforts to further enhance global access to our HIV medicines. Through this comprehensive and innovative strategy, Merck will bring ISENTRESS to the areas of greatest need at a significantly reduced price, while facilitating generic competition in the areas of greatest need through voluntary licenses and investing in healthcare capacity. We remain willing to meet with the Medicines Patent Pool Foundation to continue to discuss developments with the patent pool.

Compulsory Licensing

Merck understands that access to medicines is a particularly complex issue in many developing countries and respects that international trade agreements, especially the World Trade Organization's TRIPs agreement (trade-related aspects of intellectual property rights) and subsequent Declaration on TRIPs and Public Health agreements, provide countries with the authority, in limited circumstances, to use compulsory licensing. In the case of medicines, we further respect that compulsory licenses may be issued, under limited and specified circumstances, to meet a health crisis or emergency.

However, both the letter and spirit of international trade rules suggest that such authority should be used only in the most extraordinary and limited circumstances in order to foster a global environment that supports all forms of innovation. Merck will work vigorously with governments and other stakeholders in the developing world in the interests of meeting health needs of patients and increasing access to its medicines.

For more information on Merck's public policy position on compulsory licensing, click here.