At Merck, we believe it is our responsibility to work with policy makers and other stakeholders to explain our views ethically and transparently, providing analyses of the issues at hand, and sharing information that can help clarify complex topics in order to benefit patients and promote social and economic development.

Merck is committed to participating constructively and responsibly in the political process. Government proposals to regulate the healthcare system may directly affect the company's business and incentives for pharmaceutical innovation. There are also important policy initiatives that can further the company's goals to increase patient access to medicines and vaccines—particularly for patients in disadvantaged communities and regions—and, most importantly, to increase healthcare insurance coverage. It is appropriate for the company to help inform the debate on these issues in the United States and in other countries.

Merck's participation in the political process is guided by the following principles:

• Improving patient access to healthcare, including to medicines and vaccines
• Encouraging innovation by protecting intellectual property rights, through government support of basic research, and by supporting efficient and effective regulatory systems, among other issues

Merck's Executive Committee has overall governing responsibility for the company's public policy strategy, as guided by Merck's Board Committee on Public Policy and Social Responsibility. Merck's Global Public Policy Leadership Team, headed by the Vice President of Global Public Policy & Corporate Responsibility, leads the development and communication of policy positions on major issues. Statements summarizing Merck's position on key public policy issues are posted on our website page.

How Merck Engages

The primary means by which Merck engages in public policy debate is by communicating information to government officials and policy makers.

Merck's Federal Policy and Government Relations office in Washington, D.C., is responsible for advocacy activities with the U.S. Congress and the federal government. Advocacy at the U.S. state level is managed by Merck's State Government Affairs and Policy organization. Outside the United States, advocacy activities are managed at the regional, country or local level, with support from regional and corporate policy staff.

To assist with our advocacy and policy analysis work, Merck and our affiliates contract with private firms specializing in government affairs advocacy. These firms employ government affairs consultants with particular expertise on issues important to the company.

The company also has established the Merck Action Network, which informs Merck's U.S.-based employees and retirees about important legislative issues, and serves as a vehicle for them to communicate with their members of Congress.

All Merck employees and our agents must abide by our global corporate code of conduct, known as our Values & Standards, which applies to our interactions with government officials and advocacy activities on public policy issues. This conduct includes ensuring that all information provided to governmental entities is complete and accurate to the best of the employee's knowledge and belief. Our corporate policy on ethical business practices also includes guidelines on the U.S. Foreign Corrupt Practices Act, and makes clear that no illegal payments of any kind (monetary or otherwise) are to be offered or made to an individual or entity—including a local, state or Federal government or political party official or candidate in the United States, a government or political party official or candidate of any other nation, or officials of public international organizations—at any time or under any circumstances.

To improve access to information about Merck's advocacy activities, Merck discloses its costs associated with lobbying in the European Union and the United States.

Click here for Merck's 2010 EU lobbying report. This estimate is based on the pro rata salary costs of MSD staff, and initiatives involved in interest representation to European institutions, based on the proportion of employee time spent on these activities. To avoid double counting, membership fees and payments to third parties are not included.

In the United States, in compliance with the Lobbying Disclosure Act, Merck files quarterly reports with the U.S. Congress describing the issues we are lobbying about and the amount of money spent each quarter. These reports incorporate the expenses associated with lobbying the federal government, including the Office of U.S. Policy and Government Relations and the portion of trade association dues associated with federal lobbying.

Engaging Responsibly in Europe

In 2010, Merck voluntarily agreed to participate in the European Commission's "Register of Interest Representatives" initiative and to the corresponding code of conduct. Merck supports efforts to make this code the standard for transparency and disclosure within the European Union and encourages other companies to participate in the register.

Corporate Political and Merck Political Action Committee Contributions

Where permitted by law in the United States, Canada and Australia, the company provides corporate political contributions, primarily to the electoral campaigns of individual candidates.

Merck also enables employees to participate in the political process by joining a nonpartisan political action committee (PAC), through which they can pool their financial resources to support federal and state candidates. Except for administrative expenses, the Merck Employees Political Action Committee (Merck PAC) is completely funded with voluntarily contributions from eligible Merck employees. The PAC supports legislators from both sides of the aisle who understand and appreciate the work Merck does to discover and develop medicines and get these to the patients who need them.

Merck's corporate policy governing its corporate and PAC contributions can be found here. In addition, we have developed the Merck Principles Governing Corporate and Political Action Committee Spending. These principles are modeled on provisions in the Model Code for Political Spending established by the Center for Political Accountability and are intended to promote corporate accountability.

Merck has a formal PAC Contributions Committee that makes decisions on spending for the Merck PAC. This Committee also makes decisions on Merck's corporate political contributions. The committee is chaired by our Executive Vice President and General Counsel and includes senior managers representing different divisions and corporate functions. The General Counsel approves contribution recommendations, following review and approval by the Committee, and with periodic oversight from outside legal counsel.

To ensure compliance with Merck policy, an outside legal expert provides periodic oversight of the company's political activities. Merck performs periodic audits to assess and enforce compliance with Merck's policy governing its corporate and PAC contributions. Merck requires those individuals who recommend corporate political contributions in the United States to certify their knowledge of and adherence to our corporate Policy and Principles Governing Corporate Political and Political Action Committee Contributions.

To improve access to information about Merck's corporate political and PAC contributions in the United States, Merck semiannually posts the company's contributions categorized by state, candidate and amount. Merck also discloses any contributions to committees known as 527 organizations. To view a full listing of Merck's corporate and PAC contributions made within the United States in 2011, please click here.

The only other countries where Merck provides corporate contributions to candidates or political parties are Canada and Australia. These contributions are subject to the same policies and governance procedures discussed above. To view Merck's 2011 contributions in Canada and Australia, please click here.

Archived corporate political contribution reports are available here.

Industry Groups and Trade Associations

Merck is a member of numerous industry and trade groups. We work with these groups because they represent the pharmaceutical industry and business community in debates led by governments and other stakeholders, and because they help the industry reach consensus on policy issues. At times we may not share the views of our peers or associations. With Merck representatives on the boards and committees of industry groups and associations, we can voice questions or concerns we may have about policy or related activities. We may even recuse ourselves from related association or industry group activities.

For a list of industry and trade groups in which we are members and Merck's dues (dues that are > $25,000) to trade associations that are used for political purposes, please click here.