Merck & Co., Inc. is committed to participating constructively in the political process. Government initiatives to control health care costs and regulate the health care system that will directly affect the Company's business and the incentives for pharmaceutical innovation continue to be debated at the federal and state government level. It is appropriate for the Company to help inform this debate.

Federal law prohibits Merck from making corporate contributions to federal candidates. Merck makes campaign contributions to support state candidates in those states where such corporate contributions are allowed by law. Although there is a general preference for making contributions directly to candidate committees, Merck also sometimes provides financial support to state legislative leadership committees, to ballot initiative campaigns, and to organizations representing elected officials of the major political parties (e.g., Democratic and Republican Governors Associations). Merck has a formal Corporate Political Contributions Committee that oversees and approves all such contributions. The Corporate Political Contributions Committee is chaired by the Executive Vice President and General Counsel, and includes senior managers representing the U.S. Pharmaceuticals Division, Merck Research Laboratories, Merck Manufacturing Division, Merck Vaccine and Infectious Diseases Division, and other Corporate functions (Click here for listing of committee members).

Within this context, the Company believes it is important to support state candidates from all parties who believe in:

• Improving patient access to medicines based on the principles of competition, consumer choice and innovation;
• Expanding health insurance coverage for the uninsured;
• Protection of intellectual property rights;
• Government support of basic research; and
• Efficient and effective regulatory systems.

Contributions reflect the Company's interest in these areas, and not those of its individual officers or directors. Additionally, employees are not reimbursed directly or through compensation increases for personal political contributions. In making these contributions, Merck complies with all disclosure requirements as prescribed by federal and state law and Generally Accepted Accounting Principles.

Merck also provides an opportunity for employees to participate in the political process by joining a nonpartisan political action committee (PAC) which allows them to pool their financial resources to support federal and state candidates. Except for administrative expenses, the Merck Employees Political Action Committee (Merck PAC) is completely comprised of funds voluntarily contributed by eligible Merck employees. The Merck PAC Committee approves all Merck PAC contributions to federal and state candidates and is chaired by the Executive Vice President and General Counsel, with members also representing various divisions and corporate functions. It is the policy of Merck and the Merck PAC to ensure that employees are not coerced in making their voluntary decision on whether or not to participate in the Merck PAC or to make other political donations, and they are also informed that their decision will in no way affect their employment or job status with the Company. The Merck PAC activity is federally regulated and all contributions are fully publicly disclosed in reports filed with the Federal Election Commission. The reports include itemization of all receipts and disbursements of $200 or more and are available on the Federal Election Commission's website.

The Merck Board of Directors recognizes that the use of Company resources in the political process is an important issue for shareholders. To improve access to information about Merck's corporate political contributions in the United States, Merck annually posts on its Web site the Company's contributions categorized by state, candidate, and amount. Merck's corporate political contributions for 2007 are listed here. ( PDF* 28KB)

Additionally, although the funds provided by Merck PAC to candidates are not corporate funds but voluntary personal contributions by employees, by following this link on the Federal Election Commission's website, you may retrieve information about Merck PAC contributions. The Company hopes this information is useful to shareholders and others in providing information on the important activities of the Company and its employee PAC.

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