Merck Annual Report 2000

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In the United States, we support Medicare reform
In the United States, we are the leading advocates for prescription drug coverage for the elderly. We believe that Medicare beneficiaries will benefit most from a comprehensive modernizing of the current Medicare system in which drugs are integrated into the overall benefit and beneficiaries can take advantage of choice and competition like enrollees in the best public- and private-sector employee systems. A program like the U.S. Federal Employees Health Benefits Program is a working model of how this can be done. This program gives individuals freedom to choose between a series of affordable prescription drug plans provided by the private sector while preserving incentives for the pharmaceutical industry to come up with medical breakthroughs.

YOURxPLAN – Immediate solution to a long-term challenge: About 77 million Americans have either no prescription drug coverage or consider their coverage inadequate, according to a recent survey commissioned by Merck-Medco. These results demonstrate the need for long-term solutions to the problem of prescription drug coverage, but Merck is not waiting for legislative change. YOURxPLAN was created by Merck-Medco and Reader’s Digest to offer immediate relief. Pronounced Your Plan, this program provides access to affordable prescription drugs for Americans who lack adequate insurance and helps them better manage their health and medical costs.
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Recognizing that comprehensive Medicare reform may take time, Merck-Medco is moving ahead with a program to help people right away. YOURxPLAN is a discount drug program that provides Americans who have no drug coverage or inadequate drug coverage an opportunity to save on their prescription drug costs. Brought to consumers by Merck-Medco in conjunction with Reader’s Digest, YOURxPLAN provides affordable prescriptions to Americans lacking adequate drug coverage and helps them better manage their prescription drug use and health. For an annual fee of $25 a year – $40 per household – members receive discounts on virtually all brand name and generic medications, up to 40 percent on leading brand name medicines and additional cash-back bonuses on selected medicines.
Merck-Medco’s Generics First program is the first national generic drug education and sampling campaign designed to provide the highest quality of prescription drug care at the lowest cost. A team of Merck-Medco clinical pharmacists is conducting face-to-face visits with more than 1,700 doctors in 12 cities to promote the benefits of generic drugs and provide the forms these physicians can use to order generic samples. A national mailing to an additional 6,000 doctors will distribute similar educational material and the generic drug sample order form. By utilizing a generic drug when appropriate, a patient can save between 30 to 60 percent of what the brand-name counterpart costs.

Merck-Medco – No. 1 in customer satisfaction: Sally Swanson, retired schoolteacher, learned during a tour of the Merck-Medco, Columbus, Ohio, pharmacy that consumers rated Merck-Medco No. 1 among national mail service pharmacies in customer satisfaction for the third year in a row (survey by Caredata.com Consumer Research). What she saw and heard prompted Ms. Swanson, who heads a health committee, to recommend Merck-Medco as the pharmacy of choice for the Michigan Association of Retired School Personnel.

    Moving toward a single, free
    market in the European Union
    Across the Atlantic in Western Europe, our second-largest regional market, we are an active participant in an important dialogue among government officials, European Commission representatives and the industry with a goal of completing a single market for pharmaceuticals in the 15 member states of the European Union. At present, national governments set their own prices for prescription drugs and effectively decide which they will reimburse and which they will not. This results in several unintended and adverse consequences. For one, it denies some patients access to the most innovative drugs in the name of cost containment. For another, it opens the door for arbitrage – buying drugs cheaply in one market and selling them in another where prices are higher – by middlemen who contribute nothing to the creation of innovative medicines. The pharmaceutical industry is virtually the only economic sector that does not currently benefit from a single market in Europe.
    While this so-called parallel trade is legal within the EU, the combination of administered prices and free movement distorts the market and leads to disparities in access. Short term, these actions may benefit some patients in terms of lower cost, but over the longer term, they restrict the ability of pharmaceutical companies to engage in the R&D necessary to come up with breakthrough drugs. In addition, as increasingly acknowledged by European policy makers, fragmentation of the market harms the competitiveness of the European pharmaceutical industry compared with its counterparts in the United States and Japan.
    Merck management believes that a competition-based single market in the EU would result in more competitive prices, improved customer access to all of our medicines and an environment most conducive to innovation. To that end, the Company is working with the interested parties throughout Europe on a single market for pharmaceuticals.

Romania – Building a network of care: Merck first began to help people in Romania who suffer from HIV/AIDS, most of whom are children, in 1997. When the government demonstrated a clear commitment to deal seriously with the HIV epidemic, Merck gave $1 million in 1999 to help establish a network of regional HIV/AIDS treatment centers in Bucharest and other major cities.
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    Helping the developing world
    We also strive to provide people in the developing world with better access to our medicines. Many poorer nations lack even basic health care structures capable of delivering medicines safely, let alone administering them correctly. That is why the Company donated about $300 million in funds, medicines and other aid around the world this year. In addition, we cooperate with a variety of organizations – particularly governments and agencies such as the World Health Organization – to adapt mechanisms of delivery to fit the circumstances of individual countries. Merck’s giving programs were recognized by Worth magazine, which, in its November/December 2000 issue, ranked Merck first in corporate giving among all of America’s public corporations. The magazine particularly noted Merck’s donation of Mectizan to combat river blindness (see below). The magazine introduced the rankings by asking readers to imagine what life would be like if businesses ceased their philanthropic efforts.
    Merck has a long history of donating products to people who need them – whether in the cases of sustained need or natural disasters. For example, in 2000 we pledged vaccines to help wipe out measles in Honduras and to battle hepatitis B in Eastern Europe and Latin America. Our largest ongoing product donation program helps the inhabitants of sub-Saharan Africa and South America who are afflicted with onchocerciasis (river blindness). Since 1987, the Company has donated more than 500 million tablets of Mectizan to people at risk for river blindness in some of the poorest countries in the world. Just this year, we began delivering Mectizan to prevent lymphatic filariasis (elephantiasis) in African countries where it co-exists with river blindness. Click here for more.

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