Merck & Co. (MRK) 10-K 1 Mar 10 2009 FY Annual report Financial data

Document and Company Informatio

Document and Company Information (USD $)
	12 Months Ended Dec. 31, 2009	Jan. 29, 2010	Jun. 30, 2009
Document and Company Information [Abstract]
Entity Registrant Name	Merck & Co. Inc.
Entity Central Index Key	0000310158
Document Type	10-K
Document Period End Date	2009-12-31
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$41,003,000,000
Entity Common Stock, Shares Outstanding		3,115,317,260

Consolidated Statement of Incom

Consolidated Statement of Income (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Consolidated Statement of Income [Abstract]
Sales	27428.3	23850.3	24197.7
Costs, Expenses and Other
Materials and production	9018.9	5582.5	6140.7
Marketing and administrative	8543.2	7,377	7556.7
Research and development	5,845	4805.3	4882.8
Restructuring costs	1633.9	1032.5	327.1
Equity income from affiliates	(2,235)	-2560.6	-2976.5
U.S. Vioxx Settlement Agreement charge	0	0	4,850
Other (income) expense, net	-10669.5	-2318.1	-75.2
Total Costs, Expenses and Other	12136.5	13918.6	20705.6
Income Before Taxes	15291.8	9931.7	3492.1
Taxes on Income	2267.6	1999.4	95.3
Net Income	13024.2	7932.3	3396.8
Less: Net Income Attributable to Noncontrolling Interests	122.9	123.9	121.4
Net Income Attributable to Merck & Co., Inc.	12901.3	7808.4	3275.4
Preferred Stock Dividends	2.1	0	0
Net Income Available to Common Shareholders	12899.2	7808.4	3275.4
Basic Earnings per Common Share Available to Common Shareholders	5.67	3.65	1.51
Earnings per Common Share Assuming Dilution Available to Common Shareholders	5.65	3.63	1.49

Consolidated Balance Sheet

Consolidated Balance Sheet (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current Assets
Cash and cash equivalents	9311.4	4368.3
Short-term investments	293.1	1118.1
Accounts receivable (net of allowance for doubtful accounts of $112.6 in 2009 and $58.5 in 2008)	6602.9	2907.7
Inventories (excludes inventories of $1,157.2 in 2009 and $587.3 in 2008 classified in Other assets - see Note 8)	8055.3	2,091
Deferred income taxes and other current assets	4165.9	8627.5
Total current assets	28428.6	19112.6
Investments	432.3	6491.3
Property, Plant and Equipment (at cost)
Land	666.7	386.1
Buildings	12210.3	9767.4
Machinery, equipment and office furnishings	16173.6	13103.7
Construction in progress	1817.5	871
Property, Plant and Equipment, Gross	30868.1	24128.2
Less allowance for depreciation	12594.6	12128.6
Property,Plant and Equipment, Net	18273.5	11999.6
Goodwill	11923.1	1438.7
Other Intangibles, Net	47655.8	525.4
Other Assets	5376.4	7628.1
Total Assets	112089.7	47195.7
Current Liabilities
Loans payable and current portion of long-term debt	1379.2	2297.1
Trade accounts payable	2236.9	617.6
Accrued and other current liabilities	9453.8	9174.1
Income taxes payable	1285.2	1426.4
Dividends payable	1,189	803.5
6% Mandatory convertible preferred stock, $1 par value Authorized - 11,500,000 shares; issued and outstanding - 855,422 shares	206.6	0
Total current liabilities	15750.7	14318.7
Long-Term Debt	16074.9	3943.3
Deferred Income Taxes and Noncurrent Liabilities	18771.5	7766.6
Merck & Co., Inc. Stockholders' Equity
Common stock, $0.50 par value - 2009; $0.01 par value - 2008 Authorized - 6,500,000,000 shares - 2009; 5,400,000,000 shares - 2008 Issued - 3,562,528,536 shares - 2009; 2,983,508,675 - 2008	1781.3	29.8
Other paid-in capital	39682.6	8319.1
Retained earnings	41404.9	43698.8
Accumulated other comprehensive loss	-2766.5	-2553.9
Stockholders' equity before deduction for treasury stock	80102.3	49493.8
Less treasury stock, at cost: 454,305,985 shares - 2009; 875,818,333 shares - 2008	21044.3	30735.5
Total Merck & Co., Inc. stockholders' equity	59,058	18758.3
Noncontrolling Interests	2434.6	2408.8
Total Equity	61492.6	21167.1
Total Liabilities and Stockholders' Equity	112089.7	47195.7

Consolidated Balance Sheet (Par

Consolidated Balance Sheet (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified	Dec. 31, 2009	Dec. 31, 2008
Current Assets
Allowance for doubtful accounts	112.6	58.5
Inventories classified in Other assets	1157.2	587.3
Current Liabilities
Preferred stock, par value	1	0
Preferred stock, shares authorized	11,500,000	0
Preferred stock, shares issued and outstanding	855,422	0
Mandatory convertible preferred stock, dividend rate	0.06
Merck & Co., Inc. Stockholders' Equity
Common stock, par value	0.5	0.01
Common stock, shares authorized	6,500,000,000	5,400,000,000
Common stock, shares issued	3,562,528,536	2,983,508,675
Treasury stock, shares	454,305,985	875,818,333

Consolidated Statement of Equit

Consolidated Statement of Equity (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Beginning Balance	21167.1	20591.4	19965.8
Net income attributable to Merck & Co., Inc.	12901.3	7808.4	3275.4
Total other comprehensive income (loss), net of tax	-212.6	-1727.8	338.2
Comprehensive income, net of tax	12688.7	6080.6	3613.6
Cumulative effect of adoption of guidance on accounting for unrecognized tax benefits			81
Schering-Plough merger	30670.9
Preferred stock conversions	5.5
Cash dividends declared on common stock ($1.52 per share)	-3597.7	-3250.4	-3310.7
Treasury stock shares purchased		(2,725)	-1429.7
Acquisition of NovaCardia, Inc.			366.4
Net income attributable to noncontrolling interests	122.9	123.9	121.4
Distributions attributable to noncontrolling interests	-119.4	-121.8	-120.8
Share-based compensation plans and other	554.6	468.4	1304.4
Ending Balance	61492.6	21167.1	20591.4
Common Stock
Beginning Balance	29.8	29.8	29.8
Schering-Plough merger	1,752
Cancellations of treasury stock	-4.9
Preferred stock conversions	0.1
Share-based compensation plans and other	4.3
Ending Balance	1781.3	29.8	29.8
Other Paid-In Capital
Beginning Balance	8319.1	8014.9	7166.5
Schering-Plough merger	30860.7
Preferred stock conversions	5.4
Acquisition of NovaCardia, Inc.			366.4
Share-based compensation plans and other	497.4	304.2	482
Ending Balance	39682.6	8319.1	8014.9
Retained Earnings
Beginning Balance	43698.8	39140.8	39095.1
Net income attributable to Merck & Co., Inc.	12901.3	7808.4	3275.4
Cumulative effect of adoption of guidance on accounting for unrecognized tax benefits			81
Cancellations of treasury stock	-11595.4
Cash dividends declared on common stock ($1.52 per share)	-3597.7	-3250.4	-3310.7
Share-based compensation plans and other	-2.1
Ending Balance	41404.9	43698.8	39140.8
Accumulated Other Comprehensive Loss
Beginning Balance	-2553.9	-826.1	-1164.3
Total other comprehensive income (loss), net of tax	-212.6	-1727.8	338.2
Ending Balance	-2766.5	-2553.9	-826.1
Treasury Stock
Beginning Balance	-30735.5	-28174.7	-27567.4
Schering-Plough merger	-1964.1
Cancellations of treasury stock	11600.3
Treasury stock shares purchased		(2,725)	-1429.7
Share-based compensation plans and other	55	164.2	822.4
Ending Balance	-21044.3	-30735.5	-28174.7
Non-controlling Interests
Beginning Balance	2408.8	2406.7	2406.1
Schering-Plough merger	22.3
Net income attributable to noncontrolling interests	122.9	123.9	121.4
Distributions attributable to noncontrolling interests	-119.4	-121.8	-120.8
Ending Balance	2434.6	2408.8	2406.7

1_Consolidated Statement of Equ

Consolidated Statement of Equity (Parenthetical) (USD $)
	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Common stock, dividends declared	1.52	1.52	1.52

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash Flows from Operating Activities
Net income	13024.2	7932.3	3396.8
Adjustments to reconcile net income to net cash provided by operating activities:
Gain related to Merck/Schering-Plough partnership	-7529.6	0	0
Gain on disposition of interest in Merial Limited	-3162.5	0	0
Gain on distribution from AstraZeneca LP	0	-2222.7	0
Equity income from affiliates	(2,235)	-2560.6	-2976.5
Dividends and distributions from equity affiliates	1724.3	4289.6	2485.6
U.S. Vioxx Settlement Agreement charge	0	0	4,850
Depreciation and amortization	2,576	1631.2	1988.2
Deferred income taxes	1820.2	530.1	-1781.9
Share-based compensation	415.5	348	330.2
In-process research and development	0	0	325.1
Taxes paid for Internal Revenue Service settlement	0	0	-2788.1
Other	-534.2	607.8	-186.1
Net changes in assets and liabilities:
Accounts receivable	165.2	-889.4	-290.7
Inventories	1211.3	-452.1	-40.7
Trade accounts payable	-45.2	0	117.7
Accrued and other current liabilities	-4003.5	-1710.9	451.1
Income taxes payable	-364.8	-465.3	987.2
Noncurrent liabilities	231.3	(108)	26.2
Other	98.8	-358.3	105.1
Net Cash Provided by Operating Activities	3,392	6571.7	6999.2
Cash Flows from Investing Activities
Capital expenditures	-1460.6	-1298.3	(1,011)
Purchases of securities and other investments	-3070.8	-11967.3	-10132.7
Proceeds from sales of securities and other investments	10941.9	11065.8	10860.2
Proceeds from sale of interest in Merial Limited	4,000	0	0
Schering-Plough merger, net of cash acquired	-12842.6	0	0
Acquisitions of businesses, net of cash acquired	(130)	0	-1135.9
Distribution from AstraZeneca LP	0	1899.3	0
Increase in restricted assets	5547.6	-1629.7	-1401.1
Other	170.5	95.8	10.5
Net Cash Provided by (Used by) Investing Activities	3,156	-1834.4	(2,810)
Cash Flows from Financing Activities
Net change in short-term borrowings	(2,422)	1859.9	11.4
Proceeds from issuance of debt	4,228	0	0
Payments on debt	-25.3	(1,392)	-1195.3
Purchases of treasury stock	0	(2,725)	-1429.7
Dividends paid to stockholders	(3,215)	-3278.5	-3307.3
Other dividends paid	-264.1	-121.8	-120.8
Proceeds from exercise of stock options	186.4	102.3	898.6
Other	-126.3	32.6	277
Net Cash Used by Financing Activities	-1638.3	-5522.5	-4866.1
Effect of Exchange Rate Changes on Cash and Cash Equivalents	33.4	-182.6	98.3
Net Increase (Decrease) in Cash and Cash Equivalents	4943.1	-967.8	-578.6
Cash and Cash Equivalents at Beginning of Year	4368.3	5336.1	5914.7
Cash and Cash Equivalents at End of Year	9311.4	4368.3	5336.1

Nature of Operations

Nature of Operations
	12 Months Ended Dec. 31, 2009 USD / shares
Nature of Operations [Abstract]
Nature of Operations	1. Nature of Operations On November3, 2009, Merck Co., Inc. (Old Merck) and Schering-Plough Corporation (Schering-Plough) completed their previously-announced merger (the Merger). In the Merger, Schering-Plough acquired all of the shares of Old Merck, which became a wholly-owned subsidiary of Schering-Plough and was renamed Merck Sharp Dohme Corp. Schering-Plough continued as the surviving public company and was renamed Merck Co., Inc. (New Merck or the Company). However, for accounting purposes only, the Merger was treated as an acquisition with Old Merck considered the accounting acquirer. Accordingly, the accompanying financial statements reflect Old Mercks stand-alone operations as they existed prior to the completion of the Merger. References in these financial statements to Merck for periods prior to the Merger refer to Old Merck and for periods after the completion of the Merger to New Merck. The results of Schering-Ploughs business have been included in New Mercks financial statements only for periods subsequent to the completion of the Merger. Therefore, New Mercks financial results for 2009 do not reflect a full year of legacy Schering-Plough operations. The Merger resulted in the inclusion of Schering-Ploughs assets and liabilities as of the merger date at their respective fair values with limited exceptions. Accordingly, the Merger materially affected Mercks results of operations and financial position (see Note3). The Company is a global health care company that delivers innovative health solutions through its medicines, vaccines, biologic therapies, and consumer and animal products, which it markets directly and through its joint ventures. The Companys operations are principally managed on a products basis and are comprised of one reportable segment, which is the Pharmaceutical segment. The Pharmaceutical segment includes human health pharmaceutical and vaccine products marketed either directly by the Company or through joint ventures. Human health pharmaceutical products consist of therapeutic and preventive agents, sold by prescription, for the treatment of human disorders. The Company sells these human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies and managed health care providers such as health maintenance organizations, pharmacy benefit managers and other institutions. Vaccine products consist of preventive pediatric, adolescent and adult vaccines, primarily administered at physician offices. The Company sells these human health vaccines primarily to physicians, wholesalers, physician distributors and government entities. The Companys professional representatives communicate the effectiveness, safety and value of its pharmaceutical and vaccine products to health care professionals in private practice, group practices and managed care organizations. The Company also has animal health operations that discover, develop, manufacture and market animal health products, including vaccines. The Companys professional representatives communicate the safety and value of the Companys animal health products to veterinarians, distributors and animal

Summary of Accounting Policies

Summary of Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Accounting Policies [Abstarct]
Summary of Accounting Policies	2. Summary of Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling interest is maintained. Intercompany balances and transactions are eliminated. Controlling interest is determined by majority ownership interest and the absence of substantive third-party participating rights or, in the case of variable interest entities, by majority exposure to expected losses, residual returns or both. For those consolidated subsidiaries where Merck ownership is less than 100%, the outside shareholders interests are shown as Noncontrolling interests in equity. Investments in affiliates over which the Company has significant influence but not a controlling interest, such as interests in entities owned equally by the Company and a third party that are under shared control, are carried on the equity basis. Mergers and Acquisitions On January1, 2009, new guidance issued by the Financial Accounting Standards Board (FASB) was adopted which changes the way in which the acquisition method is to be applied in a business combination. The acquisition method of accounting requires that the assets acquired and liabilities assumed be recorded at the date of the merger or acquisition at their respective fair values with limited exceptions. Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if fair value can reasonably be estimated. If the acquisition date fair value of an asset acquired or liability assumed that arises from a contingency cannot be determined, the asset or liability is recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability is recognized. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Accordingly, the Company may be required to value assets at fair value measures that do not reflect the Companys intended use of those assets. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of the acquired business are reflected in the Companys consolidated financial statements and results of operations after the date of the merger or acquisition. If the Company determines the assets acquired do not meet the definition of a business under the acquisition method of accounting, the transaction will be accounted for as an acquisition of assets rather than a business combination, and therefore, no goodwill will be recorded. Foreign Currency Translation For international subsidiaries where the local currencies have been determined to be the functional currencies, the net assets of these subsidiaries are translated into U.S.dollars using current exchange rates. The U.S.dollar effects that ar

Merger with Schering-Plough Cor

Merger with Schering-Plough Corporation
	12 Months Ended Dec. 31, 2009 USD / shares
Merger with Schering-Plough Corporation [Abstract]
Merger with Schering-Plough Corporation	3. Merger with Schering-Plough Corporation On November3, 2009, Old Merck and Schering-Plough completed the Merger. In the Merger, Schering-Plough acquired all of the shares of Old Merck, which became a wholly-owned subsidiary of Schering-Plough and was renamed Merck Sharp Dohme Corp. Schering-Plough continued as the surviving public company and was renamed Merck Co., Inc. However, for accounting purposes only, the Merger was treated as an acquisition with Old Merck considered the accounting acquirer. Under the terms of the Merger agreement, each issued and outstanding share of Schering-Plough common stock was converted into the right to receive a combination of $10.50 in cash and 0.5767 of a share of the common stock of New Merck. Each issued and outstanding share of Old Merck common stock was automatically converted into a share of the common stock of New Merck. Based on the closing price of Old Merck stock on November3, 2009, the consideration received by Schering-Plough shareholders was valued at $28.19 per share, or $49.6billion in the aggregate. The cash portion of the consideration was funded with a combination of existing cash, including from the sale of Old Mercks interest in Merial Limited, the sale or redemption of investments and the issuance of debt (see Note11). Upon completion of the Merger, each issued and outstanding share of Schering-Plough 6% Mandatory Convertible Preferred Stock (Schering-Plough 6% preferred stock) not converted in accordance with the terms of the preferred stock remained outstanding as one share of Merck 6% Mandatory Convertible Preferred Stock (6% preferred stock) having the rights set forth in the New Merck certificate of incorporation (see Note13)which rights were substantially similar to the rights of the Schering-Plough 6% preferred stock. The Merger expanded the Companys pipeline of product candidates, broadened the Companys commercial portfolio, expanded its global presence and increased its manufacturing capabilities. Additionally, the Company expects to realize substantial cost savings and synergies, including opportunities for consolidation in both sales and marketing and research and development. Calculation of Consideration Transferred Schering-Plough common stock shares outstanding at November3, 2009 (net of treasury shares) 1,641.1 Units of merger consideration arising from conversion of 6% preferred stock 74.7 (1) Shares and units eligible 1,715.8 Cash per share/unit $ 10.50 Cash consideration for outstanding shares/units $ 18,015.6 6% preferred stock make-whole dividend payments 98.5 (2) Value of Schering-Plough deferred stock units settled in cash 155.9 (3) Total cash consideration $ 18,270.0 Shares and units eligible 1,715.8 Common stock exchange ratio per share/unit 0.5767 Equivalent New Merck shares 989.5 Shares issued to settle certain performance-based awards 0.7 New Merck shares issued 990.2 Old Merck common stock share price on November3,

Restructuring

Restructuring
	12 Months Ended Dec. 31, 2009 USD / shares
Restructuring [Abstract]
Restructuring	4. Restructuring Merger Restructuring Program In February 2010, the Company announced the first phase of a new global restructuring program (the Merger Restructuring Program) in conjunction with the integration of the legacy Merck and legacy Schering-Plough businesses. This Merger Restructuring Program is intended to optimize the cost structure of the combined Company. As part of the first phase of the Merger Restructuring Program, by the end of 2012, the Company expects to reduce its total workforce by approximately 15% across all areas of the Company worldwide. The Company also plans to eliminate 2,500 vacant positions as part of the first phase of the program. These workforce reductions will primarily come from the elimination of duplicative positions in sales, administrative and headquarters organizations, as well as from the consolidation of certain manufacturing facilities and research and development operations. The Company will continue to hire new employees in strategic growth areas of the business during this period. Certain actions, such as the ongoing reevaluation of manufacturing and research and development facilities worldwide have not yet been completed, but will be included later in 2010 in other phases of the Merger Restructuring Program. In connection with the Merger Restructuring Program, separation costs under the Companys existing severance programs worldwide were recorded in the fourth quarter of 2009 to the extent such costs were probable and reasonably estimable. The Company recorded pretax restructuring costs of $1.5billion, primarily employee separation costs, related to the Merger Restructuring Program in the fourth quarter of 2009. This first phase of the Merger Restructuring Program is expected to be completed by the end of 2012 with the total pretax costs estimated to be $2.6billion to $3.3billion. Costs under voluntary programs and enhancement programs will be recorded in 2010 as the relevant criteria are met. The Company estimates that approximately 85% of the cumulative pretax costs relate to cash outlays, primarily related to employee separation expense. Approximately 15% of the cumulative pretax costs are non-cash, relating primarily to the accelerated depreciation of facilities to be closed or divested. 2008 Global Restructuring Program In October 2008, Old Merck announced a global restructuring program (the 2008 Restructuring Program) to reduce its cost structure, increase efficiency, and enhance competitiveness. As part of the 2008 Restructuring Program, the Company expects to eliminate approximately 7,200 positions 6,800 active employees and 400 vacancies across all areas of the Company worldwide by the end of 2011. About 40% of these total reductions will occur in the United States. As part of the 2008 Restructuring Program, the Company is streamlining management layers by reducing its total number of senior and mid-level executives globally. As of December31, 2009, approximately 4,910 positions have been eliminated in connection with 2008 Restructuring Program, comprised of employee separations and the elimination of contractors and vacant positions. Merck is rolling out

Acquisitions, Research Collabor

Acquisitions, Research Collaborations and License Agreements
	12 Months Ended Dec. 31, 2009 USD / shares
Acquisitions, Research Collaborations and License Agreements [Abstract]
Acquisitions, Research Collaborations and License Agreements	5. Acquisitions, Research Collaborations and License Agreements In December 2009, Merck and Avecia Investments Limited announced a definitive agreement under which Merck would acquire the biologics business of the Avecia group for a total purchase price of $180million. Avecia Biologics is a contract manufacturing organization with specific expertise in microbial-derived biologics. Under the terms of the agreement, Merck would acquire Avecia Biologics Limited (Avecia) and all of its assets, including all Avecias process development and scale-up, manufacturing, quality and business support operations located in Billingham, United Kingdom. This transaction closed on February1, 2010, and accordingly, the results of operations of the acquired business will be included in Mercks results of operations after the acquisition date. In September 2009, Old Merck announced that it had entered into an exclusive agreement with CSL Biotherapies (CSL), a subsidiary of CSL Limited, to market and distribute Afluria, CSLs seasonal influenza (flu) vaccine, in the United States, for the 2010/2011-2015/2016 flu seasons. Under the terms of the agreement, Merck will assume responsibility for all aspects of commercialization of Afluria in the United States. CSL will supply Afluria to Merck and will retain responsibility for marketing the vaccine outside the United States. Afluria is indicated for the active immunization of persons ages6months and older against influenza disease caused by influenza virus subtypes A and type B present in the vaccine. In July 2009, Old Merck and Portola Pharmaceuticals, Inc. (Portola) signed an exclusive global collaboration and license agreement for the development and commercialization of betrixaban (MK-4448), an investigational oral Factor Xa inhibitor anticoagulant currently in PhaseII clinical development for the prevention of stroke in patients with atrial fibrillation. In return for an exclusive worldwide license to betrixaban, Old Merck paid Portola an initial fee of $50million at closing, which was recorded in Research and development expense. Portola is eligible to receive additional cash payments totaling up to $420million upon achievement of certain development, regulatory and commercialization milestones, as well as double-digit royalties on worldwide sales of betrixaban, if approved. Merck will assume all development and commercialization costs, including the costs of PhaseIII clinical trials. Portola retained an option (a)to co-fundPhaseIII clinical trials in return for additional royalties and (b)to co-promote betrixaban with Merck in the United States. The term of the agreement commenced in August 2009 and, unless terminated earlier, will continue until there are no remaining royalty payment obligations in a country, at which time the agreement will expire in its entirety in such country. The agreement may be terminated by either party in the event of a material uncured breach or bankruptcy of a party. The agreement may be terminated by Merck in the event that the parties or Merck decide to cease development of betrixaban for safety or efficacy. In addition, Merck may terminate the agreement a

Collaborative Arrangements

Collaborative Arrangements
	12 Months Ended Dec. 31, 2009 USD / shares
Collaborative Arrangements [Abstract]
Collaborative Arrangements	6. Collaborative Arrangements The Company continues its strategy of establishing external alliances to complement its substantial internal research capabilities, including research collaborations, licensing preclinical and clinical compounds and technology platforms to drive both near- and long-term growth. The Company supplements its internal research with an aggressive licensing and external alliance strategy focused on the entire spectrum of collaborations from early research to late-stage compounds, as well as new technologies across a broad range of therapeutic areas. These arrangements often include upfront payments and royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development, as well as expense reimbursements or payments to the third party. As discussed in Note2, on January1, 2009, new guidance issued by the FASB was adopted which defines collaborative arrangements and establishes reporting requirements for transactions between participants in a collaborative arrangement and between participants in the arrangement and third parties. The Company reviewed its third party arrangements to determine if any arrangement is within the scope of this new guidance. Each arrangement is unique in nature and the Companys most significant arrangements are discussed below. Cozaar/Hyzaar In 1989, Old Merck and E.I. duPont de Nemours and Company (DuPont) agreed to form a long-term research and marketing collaboration to develop a class of therapeutic agents for high blood pressure and heart disease, discovered by DuPont, called angiotensinII receptor antagonists, which include Cozaar and Hyzaar. In return, Old Merck provided DuPont marketing rights in the United States and Canada to its prescription medicines, Sinemet and Sinemet CR. Pursuant to a 1994 agreement with DuPont, the Company has an exclusive licensing agreement to market Cozaar and Hyzaar, which are both registered trademarks of DuPont, in return for royalties and profit share payments to DuPont. The patents that provide U.S.marketing exclusivity for Cozaar and Hyzaar expire in April 2010. In addition, the patent for Cozaar will expire in a number of major European markets in March 2010. Hyzaar lost patent protection in a number of major European markets in February 2010. Remicade/Simponi In 1998, a subsidiary of Schering-Plough entered into a licensing agreement with Centocor, Inc. (Centocor), now a Johnson Johnson company, to market Remicade, which is prescribed for the treatment of inflammatory diseases. In 2005, Schering-Ploughs subsidiary exercised an option under its contract with Centocor for license rights to develop and commercialize Simponi (golimumab), a fully human monoclonal antibody. The Company has exclusive marketing rights to both products outside the United States, Japan and certain Asian markets. In December 2007, Schering-Plough and Centocor revised their distribution agreement regarding the development, commercialization and distribution of both Remicade and Simponi, extending the Companys rights to exclusively market Remicade to match the durati

Financial Instruments

Financial Instruments
	12 Months Ended Dec. 31, 2009 USD / shares
Financial Instruments [Abstract]
Financial Instruments	7. Financial Instruments Derivative Instruments and Hedging Activities The Company manages the impact of foreign exchange rate movements and interest rate movements on its earnings, cash flows and fair values of assets and liabilities through operational means and through the use of various financial instruments, including derivative instruments. A significant portion of the Companys revenues and earnings in foreign affiliates is exposed to changes in foreign exchange rates. The objectives and accounting related to the Companys foreign currency risk management program, as well as its interest rate risk management activities are discussed below. Foreign Currency Risk Management A significant portion of the Companys revenues are denominated in foreign currencies. Merck relies on sustained cash flows generated from foreign sources to support its long-term commitment to U.S.dollar-based research and development. To the extent the dollar value of cash flows is diminished as a result of a strengthening dollar, the Companys ability to fund research and other dollar-based strategic initiatives at a consistent level may be impaired. The Company has established revenue hedging and balance sheet risk management programs to protect against volatility of future foreign currency cash flows and changes in fair value caused by volatility in foreign exchange rates at its U.S. functional currency entities. The objective of the revenue hedging program is to reduce the potential for longer-term unfavorable changes in foreign exchange to decrease the U.S.dollar value of future cash flows derived from foreign currency denominated sales, primarily the euro and Japanese yen. To achieve this objective, the Company will partially hedge forecasted foreign currency denominated third party and intercompany distributor entity sales that are expected to occur over its planning cycle, typically no more than three years into the future. The Company will layer in hedges over time, increasing the portion of third party and intercompany distributor entity sales hedged as it gets closer to the expected date of the forecasted foreign currency denominated sales, such that it is probable the hedged transaction will occur. The portion of sales hedged is based on assessments of cost-benefit profiles that consider natural offsetting exposures, revenue and exchange rate volatilities and correlations, and the cost of hedging instruments. The hedged anticipated sales are a specified component of a portfolio of similarly denominated foreign currency-based sales transactions, each of which responds to the hedged risk in the same manner. The Company manages its anticipated transaction exposure principally with purchased local currency put options, which provide the Company with a right, but not an obligation, to sell foreign currencies in the future at a predetermined price. If the U.S.dollar strengthens relative to the currency of the hedged anticipated sales, total changes in the options cash flows offset the decline in the expected future U.S.dollar cash flows of the hedged foreign currency sales. Conversely, if the U.S.dollar weakens, the options

Inventories

Inventories
	12 Months Ended Dec. 31, 2009 USD / shares
Inventories [Abstract]
Inventories	8. Inventories Inventories at December 31 consisted of: 2009 2008 Finished goods $ 2,475.5 $ 432.6 Raw materials and work in process 6,580.9 2,147.1 Supplies 322.8 98.6 Total (approximates current cost) 9,379.2 2,678.3 Reduction to LIFO costs (166.7 ) - $ 9,212.5 $ 2,678.3 Recognized as: Inventories $ 8,055.3 $ 2,091.0 Other assets 1,157.2 587.3 The increase in inventories in 2009 is primarily due to the Merger, including $2.3billion at December31, 2009 of remaining purchase accounting adjustments to inventories. These adjustments will be recognized as a component of Materials and production costs as the related inventories are sold. Inventories valued under the LIFO method comprised approximately 21% and 56% of inventories at December31, 2009 and 2008, respectively. Amounts recognized as Other assets are comprised almost entirely of raw materials and work in process inventories.

Goodwill and Other Intangibles

Goodwill and Other Intangibles
	12 Months Ended Dec. 31, 2009 USD / shares
Goodwill and Other Intangibles [Abstract]
Goodwill and Other Intangibles	9. Goodwill and Other Intangibles As a result of the Merger (see Note3), the Company recorded $10.5billion of goodwill and $40.9billion of acquired identifiable intangible assets, including acquired IPRD. The Company recorded an additional $7.3billion of intangible assets in conjunction with the remeasurement of Mercks previously held equity interest in the MSP Partnership. The following table summarizes goodwill activity by segment: All Pharmaceutical Other Total Goodwill balance as of January1, 2008 $ 1,115.2 $ 339.6 $ 1,454.8 Other (16.1 ) - (16.1 ) Goodwill balance as of December31, 2008 1,099.1 339.6 1,438.7 Additions 8,736.0 1,748.4 10,484.4 Goodwill balance as of December31, 2009 $ 9,835.1 $ 2,088.0 $ 11,923.1 Other intangibles at December 31 consisted of: 2009 2008 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Net Amount Amortization Net Products and product rights $ 41,413.8 $ 2,301.5 $ 39,112.3 $ 1,629.1 $ 1,501.2 $ 127.9 In-process research and development(1) 6,650.7 6,650.7 Tradenames 1,599.8 52.1 1,547.7 64.0 37.5 26.5 Other 816.3 471.2 345.1 742.5 371.5 371.0 Total identifiable intangible assets $ 50,480.6 $ 2,824.8 $ 47,655.8 $ 2,435.6 $ 1,910.2 $ 525.4 (1) Amounts capitalized as in-process research and development are accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project, the Company will make a separate determination as to the useful life of the assets and begin amortization. Aggregate amortization expense was $921.8million in 2009, $186.1million in 2008 and $235.8million in 2007. The estimated aggregate amortization expense for each of the next five years is as follows: 2010, $4.8billion; 2011, $4.8billion; 2012, $4.7billion; 2013, $4.7billion; 2014, $4.4billion.

Joint Ventures and Other Equity

Joint Ventures and Other Equity Method Affiliates
	12 Months Ended Dec. 31, 2009 USD / shares
Joint Ventures and Other Equity Method Affiliates [Abstract]
Joint Ventures and Other Equity Method Affiliates	10. Joint Ventures and Other Equity Method Affiliates Equity income from affiliates reflects the performance of the Companys joint ventures and other equity method affiliates and was comprised of the following: Years Ended December 31 2009 2008 2007 Merck/Schering-Plough $ 1,195.5 $ 1,536.3 $ 1,830.8 AstraZeneca LP 674.3 598.4 820.1 Other(1) 365.2 425.9 325.6 $ 2,235.0 $ 2,560.6 $ 2,976.5 (1) Primarily reflects results from Merial Limited until disposition on September17, 2009, Sanofi Pasteur MSD and Johnson JohnsonMerck Consumer Pharmaceuticals Company. Merck/Schering-Plough Partnership In 2000, Old Merck and Schering-Plough (collectively the Partners) entered into an agreement to create an equally-owned partnership to develop and market in the United States new prescription medicines for cholesterol management. This agreement generally provided for equal sharing of development costs and for co-promotion of approved products by each company. In 2001, the cholesterol-management partnership was expanded to include all the countries of the world, excluding Japan. In 2002, ezetimibe, the first in a new class of cholesterol-lowering agents, was launched in the United States as Zetia (marketed as Ezetrol outside the United States). In 2004, a combination product containing the active ingredients of both Zetia and Zocor, was approved in the United States as Vytorin (marketed as Inegy outside of the United States). The cholesterol agreements provided for the sharing of operating income generated by the MSP Partnership based upon percentages that varied by product, sales level and country. In the U.S.market, the Partners shared profits on Zetia and Vytorin sales equally, with the exception of the first $300million of annual Zetia sales on which Schering-Plough received a greater share of profits. Operating income included expenses that the Partners contractually agreed to share, such as a portion of manufacturing costs, specifically identified promotion costs (including direct-to-consumer advertising and direct and identifiable out-of-pocket promotion) and other agreed upon costs for specific services such as on-going clinical research, market support, market research, market expansion, as well as a specialty sales force and physician education programs. Expenses incurred in support of the MSP Partnership but not shared between the Partners, such as marketing and administrative expenses (including certain sales force costs), as well as certain manufacturing costs, were not included in Equity income from affiliates. However, these costs were reflected in the overall results of each company. Certain research and development expenses were generally shared equally by the Partners, after adjusting for earned milestones. As a result of the Merger (see Note3), the MSP Partnership is now owned 100% by the Company. The results of the MSP Partnership through the date of the Merger are reflected in Equity income from affiliates. Act

Loans Payable, Long Term Debt a

Loans Payable, Long Term Debt and Other Commitments
	12 Months Ended Dec. 31, 2009 USD / shares
Loans Payable, Long-Term Debt and Other Commitments [Abstract]
Loans Payable, Long-Term Debt and Other Commitments	11. Loans Payable, Long-Term Debt and Other Commitments Loans payable at December31, 2009 included $739.1million of Euro-denominated notes due in 2010 and short-term foreign borrowing of $235.9million. Also included in loans payable at December31, 2009 was $106.0million of long-dated notes that are subject to repayment at the option of the holders beginning in 2010 that were reclassified from long-term debt during 2009. Additionally, loans payable at December31, 2009 included $298.2million of long-dated notes that are subject to repayment at the option of the holders on an annual basis. Loans payable at December31, 2008 included $1.9billion of commercial paper borrowings, $322.2million of long-dated notes that are subject to repayment at the option of the holders on an annual basis and $68million of short-term foreign borrowing. Long-term debt at December 31 consisted of: 2009 2008 5.375% euro-denominated notes due 2014 $ 2,349.6 $ 5.30%notes due 2013 1,362.7 6.50%notes due 2033 1,314.4 1.875%notes due 2011 1,249.8 5.00%notes due 2019 1,242.5 6.55%notes due 2037 1,147.3 6.00%notes due 2017 1,118.3 4.75%notes due 2015 1,065.5 1,078.3 4.00%notes due 2015 1,004.4 5.85%notes due 2039 748.5 Floating rate euro-denominated term loan due 2012 650.0 4.375%notes due 2013 522.7 530.0 6.4%debentures due 2028 499.4 499.3 5.75%notes due 2036 497.8 497.8 5.95%debentures due 2028 497.4 497.2 5.125%notes due 2011 268.5 273.7 6.3%debentures due 2026 248.2 248.0 Other 287.9 319.0 $ 16,074.9 $ 3,943.3 The Company was a party to interest rate swap contracts which effectively convert the 5.125% fixed-rate notes and $750million of the 4.00% fixed-rate notes to floating-rate instruments (see Note7). Other (as presented in the table above) at December31, 2009 and 2008 consisted primarily of $186.7million and $292.7million of borrowings at variable rates averaging 0.0% and 1.1%, respectively. Of these borrowings, $158.7million is subject to repayment at the option of the holders beginning in 2011. In both years, Other also included foreign borrowings at varying rates up to 11.7%. On June25, 2009, Old Merck closed an underwritten public offering of $4.25billion senior unsecured notes consisting of $1.25billion aggregate principal amount of 1.875%notes due 2011, $1.0billion aggregate principal amount of 4.00%notes due 2015, $1.25billion aggregate principal amount of 5.00%notes due 2019 and $750million aggregate principal amount of 5.85%notes due 2039. Interest on the notes is payable semi-annually. The notes of each series are redeemable in whole or in part at any time, at the Companys option at the redemption prices specified in each notes

Contingencies and Environmental

Contingencies and Environmental Liabilities
	12 Months Ended Dec. 31, 2009 USD / shares
Contingencies and Environmental Liabilities [Abstract]
Contingencies and Environmental Liabilities	12. Contingencies and Environmental Liabilities The Company is involved in various claims and legal proceedings of a nature considered normal to its business, including product liability, intellectual property and commercial litigation, as well as additional matters such as antitrust actions. The Company records accruals for contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available. For product liability claims, a portion of the overall accrual is actuarially determined and considers such factors as past experience, number of claims reported and estimates of claims incurred but not yet reported. Individually significant contingent losses are accrued when probable and reasonably estimable. Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable. The Companys decision to obtain insurance coverage is dependent on market conditions, including cost and availability, existing at the time such decisions are made. As a result of a number of factors, product liability insurance has become less available while the cost has increased significantly. The Company has evaluated its risks and has determined that the cost of obtaining product liability insurance outweighs the likely benefits of the coverage that is available and as such, has no insurance for certain product liabilities effective August1, 2004, including liability for legacy Merck products first sold after that date. The Company will continue to evaluate its insurance needs and the costs, availability and benefits of product liability insurance in the future. Vioxx Litigation Product Liability Lawsuits As previously disclosed, individual and putative class actions have been filed against Old Merck in state and federal courts alleging personal injury and/or economic loss with respect to the purchase or use of Vioxx. All such actions filed in federal court are coordinated in a multidistrict litigation in the U.S.District Court for the Eastern District of Louisiana (the MDL) before District Judge Eldon E. Fallon. A number of such actions filed in state court are coordinated in separate coordinated proceedings in state courts in New Jersey, California and Texas, and the counties of Philadelphia, Pennsylvania and Washoe and Clark Counties, Nevada. As of December31, 2009, the Company had been served or was aware that it had been named as a defendant in approximately 9,100 pending lawsuits, which include approximately 19,400 plaintiff groups, alleging personal injuries resulting from the use of Vioxx, and in approximately 44 putative class actions alleging personal injuries and/or economic loss. (All of the actions discussed in this paragraph and in Other Lawsuits below are collectively referred to as the Vioxx Product Liability Lawsuits.) Of these lawsuits, approximately 7,350 lawsuits representing approximately 15,525 plaintiff groups are or are slated to be in the federal MDL and approximately 10 lawsuits representing approxim

Equity

Equity
	12 Months Ended Dec. 31, 2009 USD / shares
Equity [Abstract]
Equity	13. Equity In accordance with the New Merck certificate of incorporation there are 6,500,000,000shares of common stock and 20,000,000shares of preferred stock authorized. Of the authorized shares of preferred stock, there is a series of 11,500,000shares which is designated as 6% mandatory convertible preferred stock. 6% Mandatory Convertible Preferred Stock Prior to the Merger, on August15, 2007, Schering-Plough issued 10,000,000shares of Schering-Plough 6% preferred stock. In connection with the Merger, holders of the Schering-Plough 6% preferred stock received 6% preferred stock (which rights were substantially similar to the rights of the Schering-Plough 6% preferred stock) in accordance with the New Merck Restated Certificate of Incorporation. As a result of the Merger, the 6% preferred stock became subject to the make-whole acquisition provisions of the preferred stock effective as of November3, 2009. During the make-whole acquisition conversion period that ended on November19, 2009, the 6% preferred stock was convertible at a make-whole conversion rate of 8.2021. For each share of preferred stock that was converted during this period, the holder received $86.12 in cash and 4.7302 New Merck common shares. Holders also received a dividend make-whole payment of between $10.79 and $10.82 depending on the date of the conversion. A total of 9,110,423shares of 6% preferred stock were converted into 43,093,881shares of New Merck common stock and cash payments of approximately $785million were made to those holders who converted. In addition, make-whole dividend payments of $98.5million were made to those holders who converted representing the present value of all remaining future dividend payments from the conversion date through the mandatory conversion date on August13, 2010 using the discount rate as stipulated in the preferred stock designations. As of December31, 2009, 855,422shares of 6% preferred stock remained issued and outstanding. These outstanding shares will automatically convert into common shares of the Company and cash on August13, 2010, pursuant to the provisions of the New Merck Restated Certificate of Incorporation. The holders may also elect to convert at any time prior to August13, 2010. The 6% preferred stock of $206.6million at December31, 2009 has been classified as a current liability because all conversions will be settled as a combination of cash and common stock. Additionally, under certain conditions, the Company may elect to cause the conversion of all, but not less than all, of the Merck 6% preferred stock then outstanding. The 6% preferred stock accrues dividends at an annual rate of 6% on shares outstanding. The dividends are cumulative from the date of issuance and, to the extent the Company is legally permitted to pay dividends and the Board of Directors declares a dividend payable, the Company will pay dividends on each dividend payment date. The remaining dividend payment dates are February15, May 15 and August13, 2010. Capital Stock A summary of common stock and treasury stock transactions (shares in millions) is as follows:

Share-Based Compensation Plans

Share-Based Compensation Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Share-Based Compensation Plans [Abstract]
Share-Based Compensation Plans	14. Share-Based Compensation Plans The Company has share-based compensation plans under which employees, non-employee directors and employees of certain of the Companys equity method investees may be granted options to purchase shares of Company common stock at the fair market value at the time of grant. In addition to stock options, the Company grants performance share units (PSUs) and restricted stock units (RSUs) to certain management level employees. These plans were approved by the Companys shareholders. As a result of the Merger, the Schering-Plough 2006 Stock Incentive Plan (Schering-Plough 2006 SIP) was amended and restated. Share-based compensation instruments remain available for future grant under the Schering-Plough 2006 SIP to New Merck employees who were employees of Schering-Plough prior to the Merger. As such, there are outstanding share-based compensation instruments, as well as share-based compensation instruments available for future grant, under Old Merck and New Merck incentive plans. Also, as a result of the Merger, certain share-based compensation instruments previously granted under the Schering-Plough 2006 SIP and other legacy Schering-Plough incentive plans were exchanged for New Merck replacement awards. Other awards related to precombination services became payable in cash. In addition, certain stock options under Schering-Plough legacy incentive plans contain a lock-in feature whereby an award holder can elect to receive a cash payment for those stock options at a fixed amount based on the price of Schering-Ploughs common stock 60days prior to the Merger. The liability associated with this provision was $246.4million at December31, 2009. Upon expiration of the exercise period associated with the lock-in feature, the amount was reclassified from liabilities to equity. The fair value of replacement awards attributable to precombination service was $525.2million and is included in the calculation of consideration transferred (see Note3). A significant portion of the legacy Schering-Plough awards vested in the opening balance sheet at the time of the Merger. Those Schering-Plough share-based compensation instruments that did not immediately vest upon completion of the Merger were exchanged for New Merck replacement awards that generally vest on the same basis as the original grants made under the Schering-Plough legacy incentive plans and will immediately vest if the employee is terminated by the Company within two years of the Merger under certain circumstances. The fair value of New Merck replacement awards attributed to postcombination services is being recognized as compensation cost subsequent to the Merger over the requisite service period of the awards. At December31, 2009, 134.0million shares collectively were authorized for future grants under the Companys share-based compensation plans. Prior to the Merger, employee share-based compensation awards were settled primarily with treasury shares. Subsequent to the Merger, these awards are being settled with newly issued shares. Employee stock options are granted to purchase shares of Company stock at the fair market value at

Pension and Other Postretiremen

Pension and Other Postretirement Benefit Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Pension and Other Postretirement Benefit Plans [Abstract]
Pension and Other Postretirement Benefits Plans	15. Pension and Other Postretirement Benefit Plans The Company has defined benefit pension plans covering eligible employees in the United States and in certain of its international subsidiaries. Pension benefits in the United States are based on a formula that considers final average pay and years of credited service. In addition, the Company provides medical, dental and life insurance benefits, principally to its eligible U.S.retirees and similar benefits to their dependents, through its other postretirement benefit plans. The Company uses December 31 as the year-end measurement date for all of its pension plans and other postretirement benefit plans. The net cost for pension and other postretirement benefit plans consisted of the following components: Other Postretirement Pension Benefits Benefits Years Ended December 31 2009 2008 2007 2009 2008 2007 Service cost $ 398.4 $ 344.1 $ 377.2 $ 75.3 $ 73.2 $ 90.8 Interest cost 449.7 414.2 379.9 108.3 113.8 107.7 Expected return on plan assets (649.2 ) (559.4 ) (491.4 ) (98.0 ) (129.0 ) (130.5 ) Net amortization 122.8 70.4 149.4 18.9 (22.6 ) (16.8 ) Termination benefits 88.7 62.3 25.6 9.6 11.2 7.7 Curtailments (6.2 ) 5.7 1.1 (9.9 ) (15.9 ) (16.8 ) Settlements 2.7 8.6 5.4 - - - Net pension and other postretirement cost $ 406.9 $ 345.9 $ 447.2 $ 104.2 $ 30.7 $ 42.1 Net pension and other postretirement benefit cost totaled $511.1million in 2009, $376.6million in 2008 and $489.3million in 2007. The increase in 2009 as compared with 2008 is primarily due to $118.2million of costs associated with Schering-Plough benefit plans from the date of the Merger through December31, 2009. The net pension cost attributable to U.S.plans included in the above table was $288.7million in 2009, $226.4million in 2008 and $302.2million in 2007. In connection with restructuring actions (see Note4), termination charges were recorded in 2009, 2008 and 2007 on pension and other postretirement benefit plans related to expanded eligibility for certain employees exiting Merck. Also, in connection with these restructuring activities, net curtailment gains were recorded in 2009 and curtailment losses were recorded in 2008 and 2007 on pension plans and net curtailment gains were recorded in 2009, 2008 and 2007 on other postretirement benefit plans. In addition, settlement losses were recorded in 2009, 2008 and 2007 on certain of its domestic and international pension plans. Employee benefit plans are an exception to the recognition and fai

Other

Other (Income) Expense, Net
	12 Months Ended Dec. 31, 2009 USD / shares
Other (Income) Expense, Net [Abstract]
Other (Income) Expense, Net	16. Other (Income) Expense, Net Years Ended December 31 2009 2008 2007 Interest income $ (210.2 ) $ (631.4 ) $ (741.1 ) Interest expense 458.0 251.3 384.3 Exchange (gains) losses (12.4 ) 147.4 (54.3 ) Other, net (10,904.9 ) (2,085.4 ) 335.9 $ (10,669.5 ) $ (2,318.1 ) $ (75.2 ) The decline in interest income in 2009 as compared with 2008 is primarily the result of lower interest rates and a change in the investment portfolio mix toward cash and shorter-dated securities in anticipation of the Merger. The increase in interest expense in 2009 is largely due to $174million of commitment fees and incremental interest expense related to the financing of the Merger. Included in other, net in 2009 was a $7.5billion gain resulting from recognizing Mercks previously held equity interest in the MSP Partnership at fair value as a result of obtaining control of the MSP Partnership in the Merger (see Note3). Also included in other, net in 2009 was a $3.2billion gain on the sale of Old Mercks interest in Merial (see Note10), $231million of investment portfolio recognized net gains, and an $80million charge related to the settlement of the Vioxx third-party payor litigation in the United States. Included in other, net in 2008 was an aggregate gain on distribution from AZLP of $2.2billion (see Note10), a gain of $249million related to the sale of the remaining worldwide rights to Aggrastat, a $300million expense for a contribution to the Merck Company Foundation, $117million of investment portfolio recognized net losses and a $58million charge related to the resolution of an investigation into whether Old Merck violated state consumer protection laws with respect to the sales and marketing of Vioxx. The fluctuation in exchange losses (gains) in 2008 from 2007 is primarily due to the higher cost of foreign currency contracts due to lower U.S.interest rates and unfavorable impacts of period-to-period changes in foreign currency exchange rates on net long or net short foreign currency positions, considering both net monetary assets and related foreign currency contracts. The change in other, net for 2008 primarily reflects an aggregate gain in 2008 from AZLP of $2.2billion, the impact of a $671million charge in 2007 related to the resolution of certain civil governmental investigations, and a 2008 gain of $249million related to the sale of the remaining worldwide rights to Aggrastat, partially offset by a $300million expense for a contribution to the Merck Company Foundation, higher investment portfolio recognized net losses of $153million and a $58million charge related to the resolution of an investigation into whether Old Merck violated consumer protection laws with respect to the sales and marketing of Vioxx. Interest paid was $351.4million in 2009, $247.0million in 2008 and $406.4million in 2007, respectively, which excludes commitment fees.

Taxes on Income

Taxes on Income
	12 Months Ended Dec. 31, 2009 USD / shares
Taxes on Income [Abstract]
Taxes on Income	17. Taxes on Income A reconciliation between the effective tax rate and the U.S.statutory rate is as follows: 2009 2008 2007 Amount Tax Rate Amount Tax Rate Amount Tax Rate U.S. statutory rate applied to income before taxes $ 5,352.2 35.0 % $ 3,476.1 35.0 % $ 1,222.3 35.0 % Differential arising from: Gain on equity investments (2,539.7 ) (16.6 ) 29.0 0.3 Foreign earnings (1,189.0 ) (7.8 ) (1,269.9 ) (12.9 ) (1,196.0 ) (34.3 ) Tax rate change (198.0 ) (1.3 ) State tax settlements (108.0 ) (0.7 ) (191.6 ) (2.0 ) Foreign tax credit utilization (192.0 ) (2.0 ) Amortization of purchase accounting adjustments 760.0 5.0 Restructuring 264.0 1.7 114.7 1.2 State taxes 185.1 1.2 310.9 3.2 11.6 0.3 In-process research and development 113.8 3.3 Other (1) (259.0 ) (1.7 ) (277.8 ) (2.7 ) (56.4 ) (1.6 ) $ 2,267.6 14.8 % $ 1,999.4 20.1 % $ 95.3 2.7 % (1) Other includes the tax effect of contingency reserves, research credits, export incentives and miscellaneous items. The 2007 tax rate reconciliation percentage of (34.3)% for foreign earnings reflects the change in mix of foreign and domestic earnings primarily resulting from the $4.85billion U.S.Vioxx Settlement Agreement charge. Income (loss) before taxes consisted of: Years Ended December 31 2009 2008 2007 Domestic $ 5,319.5 $ 5,210.1 $ (2,525.8 ) Foreign 9,972.3 4,721.6 6,017.9 $ 15,291.8 $ 9,931.7 $ 3,492.1 Taxes on income consisted of: Years Ended December 31 2009 2008 2007 Current provision Federal $ (55.2 ) $ 1,053.6 $ 988.1 Foreign 495.4 292.4 687.0 State 7.2 123.3 202.2 447.4 1,469.3 1,877.3 Deferred provision Federal 2,094.7 419.0 (1,671.5 ) Foreign (437.3 ) 55.8 157.2 State 162.8 55.3 (267.7 ) 1,

Earnings per Share

Earnings per Share
	12 Months Ended Dec. 31, 2009 USD / shares
Earnings per Share [Abstract]
Earnings per Share	18. Earnings per Share As discussed in Note2, effective January1, 2009, new guidance issued by the FASB was adopted which clarifies that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are considered participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The provisions of this new guidance are retrospective; therefore prior periods have been restated. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. RSUs and certain PSUs granted to certain management level employees (see Note14)participate in dividends on the same basis as common shares and are nonforfeitable by the holder. As a result, these RSUs and PSUs meet the definition of a participating security. The calculations of earnings per share under the two-class method are as follows: Years Ended December31 2009 2008 2007 Basic Earnings per Common Share Net income available to Merck Co., Inc. common shareholders $ 12,899.2 $ 7,808.4 $ 3,275.4 Less: Income allocated to participating securities 46.3 20.8 8.6 Net income allocated to common shareholders $ 12,852.9 $ 7,787.6 $ 3,266.8 Average common shares outstanding 2,268.2 2,135.8 2,170.5 $ 5.67 $ 3.65 $ 1.51 Earnings per Common Share Assuming Dilution Net income available to Merck Co., Inc. common shareholders $ 12,899.2 $ 7,808.4 $ 3,275.4 Less: Income allocated to participating securities 46.2 20.8 8.6 Net income allocated to common shareholders $ 12,853.0 $ 7,787.6 $ 3,266.8 Average common shares outstanding 2,268.2 2,135.8 2,170.5 Common shares issuable (1) 5.0 6.7 19.3 Average common shares outstanding assuming dilution 2,273.2 2,142.5 2,189.8 $ 5.65 $ 3.63 $ 1.49 (1) Issuable primarily under share-based compensation plans. In 2009, 2008 and 2007, 228.0million, 201.2million and 123.7million, respectively, of common shares issuable under share-based compensation plans were excluded from the computation of earnings per common share assuming dilution because the effect would have been antidilutive.

Comprehensive Income

Comprehensive Income
	12 Months Ended Dec. 31, 2009 USD / shares
Comprehensive Income [Abstract]
Comprehensive Income	19. Comprehensive Income The components of Other comprehensive income (loss) are as follows: Year Ended December31, 2009 Pretax Tax After Tax Net unrealized loss on derivatives $ (316.1 ) $ 124.9 $ (191.2 ) Net loss realization 61.2 (24.1 ) 37.1 Derivatives (254.9 ) 100.8 (154.1 ) Net unrealized gain on investments 208.3 (31.2 ) 177.1 Net gain realization (230.5 ) 23.6 (206.9 ) Investments (22.2 ) (7.6 ) (29.8 ) Benefit plan net (loss) gain and prior service cost (credit), net of amortization 504.5 (219.0 ) 285.5 Cumulative translation adjustment (1) (314.2 ) - (314.2 ) $ (86.8 ) $ (125.8 ) $ (212.6 ) Year Ended December31, 2008 Net unrealized gain on derivatives $ 291.0 $ (116.0 ) $ 175.0 Net gain realization (38.8 ) 15.4 (23.4 ) Derivatives 252.2 (100.6 ) 151.6 Net unrealized loss on investments (212.9 ) 79.2 (133.7 ) Net loss realization 116.9 (63.7 ) 53.2 Investments (96.0 ) 15.5 (80.5 ) Benefit plan net (loss) gain and prior service cost (credit), net of amortization (2,891.2 ) 1,129.5 (1,761.7 ) Cumulative translation adjustment (1) (37.2 ) - (37.2 ) $ (2,772.2 ) $ 1,044.4 $ (1,727.8 ) Year Ended December31, 2007 Net unrealized loss on derivatives $ (50.5 ) $ 20.7 $ (29.8 ) Net loss realization 43.0 (17.6 ) 25.4 Derivatives (7.5 ) 3.1 (4.4 ) Net unrealized gain on investments 106.2 (24.5 ) 81.7 Net gain realization (36.1 ) 12.4 (23.7 ) Investments 70.1 (12.1 ) 58.0 Benefit plan net gain (loss) and prior service cost (credit), net of amortization 387.4 (147.1 ) 240.3 Cumulative translation adjustment (1) 34.4 9.9 44.3 $ 484.4 $ (146.2 ) $ 338.2 (1) The increase in the cumulative translation adjustment in 2009 is due to the Merger. Amounts in 2008 and 2007 represent cumulative translation adjustments related to equity investees. The components of Accumulated other comprehensive loss are as follows: December 31 2009 2008 Net unrealized (loss) gain on derivatives $ (42.2 ) $ 111.9 Net unrealized gain on investments 33.3 6

Segment Reporting

Segment Reporting
	12 Months Ended Dec. 31, 2009 USD / shares
Segment Reporting [Abstract]
Segment Reporting	20. Segment Reporting The Companys operations are principally managed on a products basis and are comprised of one reportable segment, which is the Pharmaceutical segment. The Pharmaceutical segment includes human health pharmaceutical and vaccine products marketed either directly by the Company or through joint ventures. Human health pharmaceutical products consist of therapeutic and preventive agents, sold by prescription, for the treatment of human disorders. The Company sells these human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies and managed health care providers such as health maintenance organizations, pharmacy benefit managers and other institutions. Vaccine products consist of preventive pediatric, adolescent and adult vaccines, primarily administered at physician offices. The Company sells these human health vaccines primarily to physicians, wholesalers, physician distributors and government entities. A large component of pediatric and adolescent vaccines is sold to the U.S.Centers for Disease Control and Prevention Vaccines for Children program, which is funded by the U.S.government. The Company also has animal health operations that discover, develop, manufacture and market animal health products, including vaccines. Additionally, the Company has consumer health care operations that develop, manufacture and market OTC, foot care and sun care products in the United States and Canada. Segment composition reflects certain managerial changes that have been implemented. Segment disclosures for prior periods have been recast on a comparable basis with 2009. All other includes other non-reportable segments, including animal health and consumer health care, as well as revenue from the Companys relationship with AZLP. The accounting policies for the segments described above are the same as those described in Note2. Revenues and profits for these segments are as follows: Pharmaceutical All Other Total Year Ended December31, 2009 Segment revenues $ 25,236.5 $ 2,114.0 $ 27,350.5 Segment profits 15,714.6 1,735.1 17,449.7 Included in segment profits: Equity income from affiliates 1,330.1 751.7 2,081.8 Depreciation and amortization (92.6 ) - (92.6 ) Year Ended December31, 2008 Segment revenues $ 22,081.3 $ 1,694.1 $ 23,775.4 Segment profits 14,110.3 1,691.0 15,801.3 Included in segment profits: Equity income from affiliates 1,655.8 668.4 2,324.2 Depreciation and amortization (101.4 ) - (101.4 ) Year Ended December31, 2007 Segment revenues $ 22,282.8 $ 1,848.1 $ 24,130.9 Segment profits 14,558.7 2,027.6

Merck Schering-Plough Cholester

Merck Schering-Plough Cholesterol Partnership Combined Financial Statements
	12 Months Ended Dec. 31, 2009 USD / shares
Merck/Schering-Plough Cholesterol Partnership Combined Financial Statements [Abstract]
Merck/Schering-Plough Cholesterol Partnership Combined Financial Statements	Merck/Schering-Plough Cholesterol Partnership Merck/Schering-Plough Cholesterol Partnership Combined Statements of Cash Flows Years Ended December31, ($ in millions) 2008 2007 Operating Activities: Income from operations $ 3,155 $ 3,663 Adjustments to reconcile income from operations to net cash provided by operating activities: Accounts receivable, net 91 (109 ) Inventories 26 (18 ) Prepaid expenses and other assets 2 (2 ) Rebates payable (114 ) 106 Payable to Merck and Schering-Plough, net (53 ) 1 Accrued expenses and other liabilities (1 ) 38 Non-cash charges 68 60 Net cash provided by operating activities 3,174 3,739 Financing Activities: Contributions from Partners 407 722 Distributions to Partners (3,868 ) (4,006 ) Net cash used for financing activities (3,461 ) (3,284 ) Net increase/(decrease) in cash and cash equivalents (287 ) 455 Cash and cash equivalents, beginning of period 491 36 Cash and cash equivalents, end of period $ 204 $ 491 The accompanying notes are an integral part of these combined financial statements. Merck/Schering-Plough Cholesterol Partnership Combined Statements of Partners Capital (Deficit) ($ in millions) Schering- Plough Merck Total Balance, January1, 2007 2 (83 ) (81 ) Contributions from Partners 276 506 782 Income from operations 1,831 1,832 3,663 Distributions to Partners (1,944 ) (2,062 ) (4,006 ) Balance, December31, 2007 165 193 358 Contributions from Partners 143 264 407 Income from operations 1,665 1,490 3,155 Distributions to Partners (1,964 ) (1,836 ) (3,800 ) Balance, December31, 2008 $ 9 $ 111 $ 120 The accompanying notes are an integral part of these combined financial statements. Merck/Schering-Plough Cholesterol Partnership Notes to Combined Financial Statements 1. Description of Business and Basis of Presentation Description of Business In May 2000, Merck Co., Inc. (Merck) and Schering-Plough Corporation (Schering-Plough) (collectively the Partners) entered into agreements (the Agreements) to jointly develop and market in the United States, Schering-Ploughs then investigational cholesterol absorption inhibitor (CAI) ezetimibe (marketed today in the United States as ZETIA and as EZETROL in most other countries) (the Cholesterol Collaboration) and a fixed-combination tabl