In our business, adherence to the rule of law, ethical working practices, good corporate governance, transparency and respect for people are critically important to patients, healthcare professionals, the purchasers of our products, our employees and investors—and to our sustainable business success.

We have strong corporate policies and safeguards in place, and a long history of abiding by, and promoting, high ethical standards and the law.

It takes more than having the right mechanisms, standards and training in place to ensure an ethical business environment. Ethics are an integral part of how a company and its employees—from the executive and board level on down—conduct themselves every day.

Every Merck employee is responsible for adhering to business practices that are in accordance with the letter and spirit of the law and with ethical principles that reflect the highest standards of corporate and individual behavior. Like integrity of product, integrity of performance is a Merck standard wherever we do business, and ignorance of that standard is never an acceptable excuse for improper behavior. Improper behavior cannot be rationalized as being in the company's interest. No act of impropriety advances the interest of the company; no act of impropriety will be tolerated.

The Merck Office of Ethics was established in 1995. In 2009, the Office of Ethics became part of the Global Compliance Organization, which was formally established following the merger between Merck and Schering-Plough.

The Office of Ethics has grown to include eight ethics officers, or ombudsmen, at three sites serving different parts of Merck's operations; an ethics professional responsible for communications and training; and four support staff, with a budget in 2010 of $2.5 million.

Resources for Employees

The Office of Ethics serves as an additional employee resource to raise concerns about ethical issues. Employees can do this in several ways. One is to contact (via toll-free telephone or intranet) the AdviceLine that is run by an outside vendor. More common is for employees to contact the Office of Ethics directly. They can ask to speak to an ethics officer or an ombudsman.

The Merck Ombudsman Program offers a "safe haven" for U.S.-based employees to express work-related issues without fear of retaliation. This program confidentially addresses employees' concerns about conduct that may be inconsistent with Merck's policies, practices, values and standards. Outside the United States, employees may contact the Office of Ethics directly or use the AdviceLine to raise concerns.

About 40 percent of calls that the Office of Ethics gets each year are classified as part of the ombudsman process—i.e., kept confidential—with the main distinction being that all records of this conversation are destroyed once the case is complete.

Addressing Misconduct

In 2010, the Global Compliance Organization launched a Sigma project to harmonize the processes of managing and tracking investigations. The scope of this project is to provide global visibility and response to ethics and compliance issues.

When Merck substantiates allegations of ethical misconduct, it imposes a variety of disciplinary actions on those responsible for the misconduct, such as dismissal from the company, issuance of final written warning letters and financial penalties. We also take the appropriate steps to address any needed improvements in organizational and process controls.