Merck is committed to diversity both in our workforce and among our suppliers. We cast a wide net in our search for talent, seeking qualified suppliers, large and small, from all segments of the business community.

These include minority-, women-, veteran-, service disabled-, HUBZone small- and gay- and lesbian-owned (LGBT) business enterprises. We believe that working with qualified suppliers from diverse segments of the business community supports our business objectives and economic development in the diverse communities that we serve.

Merck has had a Supplier Diversity program in the United States for many years. Managed by our Global Procurement Group, the program's objectives are to foster growth of companies regardless of size that are owned by ethnic minorities, women, veterans, and lesbian, gay, bisexual and transgender (LGBT) individuals, with the goal of identifying and utilizing qualified diverse suppliers as providers of goods and services to meet Merck's business needs.

Qualified diverse suppliers are pursued from all segments of the business community. Merck's Supplier Diversity program has three major areas of focus: business development, supplier development and strategic outreach. Minority-, women-, LGBT-, and veteran-owned business entities must be at least 51 percent owned, operated and controlled by minorities (Black, Hispanic, Asian and Native American), women, veterans, or LGBT individuals who are U.S. citizens, and the business must be headquartered in the United States or Puerto Rico.

Merck hosts Supplier Diversity Forums to increase qualified, diverse suppliers' understanding of Merck's business needs, to introduce these suppliers to the Merck business professionals who are involved in supplier selection, and to increase Merck's knowledge about current and potential diverse suppliers. Merck's most recent forums were focused in the media industry—global channel marketing companies, as well as market research firms and agencies. More than 50 diverse businesses presented their capabilities and value propositions to over 100 internal Merck stakeholders.

Our Supplier Diversity program also supports the development of qualified, diverse suppliers through a number of internal and external programs. In addition to providing coaching and feedback on performance, Merck launched Phase II of our Supplier Diversity Mentor/Champion Program, in 2008. Through the program, we conduct supplier assessments and create joint development plans with qualified, diverse suppliers that focus on increasing supplier growth, competitiveness and sustainability. Merck senior executives champion each mentored supplier and create targeted growth and development plans that include Merck-sponsored training and guidance. Suppliers in the following categories are currently enrolled in the program: research, information technology, construction, professional services, marketing, direct materials and site services.

Fostering Growth and Development

Historically, the utilization of diverse businesses in research has been challenging. In 2008, Merck, several other pharmaceutical corporations, and a number of diverse businesses hosted a conference that focused solely on minority, women, veteran, service-disabled-veteran, and LGBT businesses in the life sciences arena. More than 300 people attended the event, including pharmaceutical executives and buyers, diverse business owners, and government agencies such as the Department of Commerce, the Minority Business Development Agency, the Centers for Disease Control and Prevention, and the FDA. Diverse suppliers from across the U.S. attended the two-day conference in New Jersey and made business connections with corporations, government agencies and one another. The initiative has grown since 2008 and is now a nonprofit organization called Diversity Alliance for Science (DA4S). Merck continues to be a strong sponsor of the annual conference and holds a seat on its board of directors.

We also participate in more than 30 external supplier conferences and networking events focused on minority-, women-, veteran-, and LGBT-owned businesses, and are active in external organizations, including the National Minority Supplier Development Council, the U.S. Pan Asian American Chamber of Commerce, Women's Business Enterprise National Council, and the National Gay and Lesbian Chamber of Commerce. In addition, we build into our contracts with nonminority suppliers our principles to encourage diversity in supplier development, growth and utilization. We believe that driving diverse supplier utilization through our supply chain will fuel the economy in the business community and provide a multiplier effect for diverse business utilization.

Merck has also expanded its Supplier Diversity program to the United Kingdom and Canada, where the company is a charter member of the Minority Supplier Development U.K. and a national member of the Canadian Aboriginal Minority Supplier Council. Plans for further expansion to other countries are under way.