Because of our long-standing support for adding prescription drug coverage to Medicare, we are pleased that Congress acted to pass the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA). Implementation of the new benefit, which will begin on January 1, 2006, advances Merck's goal of improving access to medicines by expanding insurance coverage and does so while preserving market-based incentives for pharmaceutical innovation.

The new drug benefit will provide very important help especially to those people with Medicare who can least afford medicines and who have the highest prescription drug needs. The legislation will also help retain employer-sponsored retiree coverage through which millions of seniors already receive excellent drug benefits by providing incentives to ensure that employers who offer retiree drug coverage retain that coverage.

We are encouraged that the legislation avoids adopting government price controls. Unlike virtually all other services in the Medicare program, this prescription drug benefit will be managed through competing private plans using market-based cost containment tools, not price controls or fee schedules set by the government. At the same time, the benefit assures that prescription drug plans will have incentives to control drug costs by demanding competitive prices for medicines and by encouraging the appropriate use of medicines.

Because Merck is focused on developing novel medicines that represent true advances in patient care, have proven clinical outcomes and are priced competitively, we are well positioned for the implementation of a Medicare drug benefit delivered by private plans.

Since the Medicare prescription drug benefit is not scheduled to take effect until 2006, the legislation includes interim help for people with Medicare, particularly for low-income beneficiaries through a Medicare-approved discount card program. Merck is participating in Medicare-approved drug discount cards by offering discounts on Merck medicines for eligible beneficiaries enrolled in a Medicare-endorsed drug discount card. For low-income seniors who exhaust their discount card federal purchasing credit, Merck provides its medicines through their participating discount card.

This program reaffirms Merck's leadership role in helping Americans gain access to much-needed medicines and our commitment to making the new Medicare program a success.