Merck Sharp & Dohme 10-K 30 Mar 10 2009 FY Annual report Financial data

Document and Entity Information

Document and Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Jan. 29, 2010	Jun. 30, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	Merck Sharp & Dohme Corp.
Entity Central Index Key	0000064978
Document Type	10-K
Document Period End Date	2009-12-31
Amendment Flag	false
Document Fiscal Year Focus	2,009
Document Fiscal Period Focus	FY
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	Non-accelerated Filer
Entity Public Float			$58,949,000,000
Entity Common Stock, Shares Outstanding		100

Consolidated Statement of Incom

Consolidated Statement of Income (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Consolidated Statement of Income [Abstract]
Sales	23643.2	23850.3	24197.7
Costs, Expenses and Other
Materials and production	5590.8	5582.5	6140.7
Marketing and administrative	7323.8	7,377	7556.7
Research and development	5139.2	4805.3	4882.8
Restructuring costs	545.6	1032.5	327.1
Equity income from affiliates	(2,503)	-2560.6	-2976.5
U.S. Vioxx Settlement Agreement charge			4,850
Other (income) expense, net	-3275.8	-2318.1	-75.2
Total Costs, Expenses and Other	12820.6	13918.6	20705.6
Income Before Taxes	10822.6	9931.7	3492.1
Taxes on Income	2747.5	1999.4	95.3
Net Income	8075.1	7932.3	3396.8
Less: Net Income Attributable to Noncontrolling Interests	122.8	123.9	121.4
Net Income Attributable to Merck Sharp & Dohme Corp.	7952.3	7808.4	3275.4

Consolidated Balance Sheet

Consolidated Balance Sheet (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current Assets
Cash and cash equivalents	6632.8	4368.3
Short-term investments	293.1	1118.1
Accounts receivable (net of allowance for doubtful accounts of $39.9 in 2009 and $58.5 in 2008)	3280.5	2907.7
Inventories (excludes inventories of $709.9 in 2009 and $587.3 in 2008 classified in Other assets - see Note 8)	2147.7	2,091
Deferred income taxes and other current assets	2100.7	8627.5
Receivables from Affiliates	1032.7	0
Total current assets	15487.5	19112.6
Investments	430.3	6491.3
Property, Plant and Equipment (at cost)
Land	325.3	386.1
Buildings	9618.9	9767.4
Machinery, equipment and office furnishings	13002.9	13103.7
Construction in progress	1231.7	871
Property, Plant and Equipment, Gross	24178.8	24128.2
Less allowance for depreciation	12,526	12128.6
Property,Plant and Equipment, Net	11652.8	11999.6
Goodwill	1,439	1438.7
Other Intangibles, Net	523.2	525.4
Receivables from Affiliates	7067.5	0
Other Assets	5149.4	7628.1
Total Assets	41749.7	47195.7
Current Liabilities
Loans payable and current portion of long-term debt	450.5	2297.1
Trade accounts payable	646.8	617.6
Accrued and other current liabilities	5477.3	9174.1
Income taxes payable	583.7	1426.4
Dividends payable	0	803.5
Payables to affiliates	859.5	0
Total current liabilities	8017.8	14318.7
Long-Term Debt	8067.8	3943.3
Deferred Income Taxes and Noncurrent Liabilities	7382.4	7766.6
Merck Sharp & Dohme Corp. Stockholders' Equity
Contributed capital	8683.2	8348.9
Retained earnings	37641.8	43698.8
Accumulated other comprehensive loss	-2565.6	-2553.9
Stockholders' equity before deduction for treasury stock	43759.4	49493.8
Receivables from MSD's Parent Company	8809.7	0
Investment in MSD's Parent Company	19080.2	0
Treasury stock, at cost, 875,818,333 shares	0	30735.5
Total Merck Sharp & Dohme Corp. stockholders' equity	15869.5	18758.3
Noncontrolling Interests	2412.2	2408.8
Total equity	18281.7	21167.1
Total Liabilities and Stockholders' Equity	41749.7	47195.7

Consolidated Balance Sheet (Par

Consolidated Balance Sheet (Parenthetical) (USD $)
In Millions, except Share data	Dec. 31, 2009	Dec. 31, 2008
Current Assets
Allowance for doubtful accounts	39.9	58.5
Inventories classified in Other assets	709.9	587.3
Merck Sharp & Dohme Corp. Stockholders' Equity
Treasury stock, shares		875,818,333

Consolidated Statement of Stock

Consolidated Statement of Stockholders Equity (USD $)
In Millions	Contributed Capital	Receivables from MSD's Parent Company	Retained Earnings	Accumulated Other Comprehensive Loss	Investment in MSD's Parent Company / Treasury Stock	Non-controlling Interests	Total
Beginning Balance at Dec. 31, 2006	7196.3		39095.1	-1164.3	-27567.4	2406.1	19965.8
Net income attributable to Merck Sharp & Dohme Corp.			3275.4				3275.4
Total other comprehensive income (loss), net of tax				338.2			338.2
Comprehensive income, net of tax							3613.6
Cumulative effect of adoption of guidance on accounting for unrecognized tax benefits			81				81
Cash dividends declared on common stock ($1.52 per share)			-3310.7				-3310.7
Treasury stock shares purchased					-1429.7		-1429.7
Acquisition of NovaCardia, Inc.	366.4						366.4
Net income attributable to noncontrolling interests						121.4	121.4
Distributions attributable to noncontrolling interests						-120.8	-120.8
Share-based compensation plans and other	482				822.4		1304.4
Ending Balance at Dec. 31, 2007	8044.7		39140.8	-826.1	-28174.7	2406.7	20591.4
Net income attributable to Merck Sharp & Dohme Corp.			7808.4				7808.4
Total other comprehensive income (loss), net of tax				-1727.8			-1727.8
Comprehensive income, net of tax							6080.6
Cash dividends declared on common stock ($1.52 per share)			-3250.4				-3250.4
Treasury stock shares purchased					(2,725)		(2,725)
Net income attributable to noncontrolling interests						123.9	123.9
Distributions attributable to noncontrolling interests						-121.8	-121.8
Share-based compensation plans and other	304.2				164.2		468.4
Ending Balance at Dec. 31, 2008	8348.9		43698.8	-2553.9	-30735.5	2408.8	21167.1
Net income attributable to Merck Sharp & Dohme Corp.			7952.3				7952.3
Total other comprehensive income (loss), net of tax				-11.7			-11.7
Comprehensive income, net of tax							7940.6
Cancellations of treasury stock	-4.9		-11595.4		11600.3
Cash dividends declared on common stock ($1.52 per share)			-2413.9				-2413.9
Receivables from MSD's Parent Company		-8809.7					-8809.7
Net income attributable to noncontrolling interests						122.8	122.8
Distributions attributable to noncontrolling interests						(120)	(120)
Share-based compensation plans and other	339.2				55	0.6	394.8
Ending Balance at Dec. 31, 2009	8683.2	-8809.7	37641.8	-2565.6	-19080.2	2412.2	18281.7

1_Consolidated Statement of Sto

Consolidated Statement of Stockholders 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
Retained Earnings
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	8075.1	7932.3	3396.8
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposition of interest in Merial Limited	-3162.5
Gain on distribution from AstraZeneca LP		-2222.7
Equity income from affiliates	(2,503)	-2560.6	-2976.5
Dividends and distributions from equity affiliates	2030.9	4289.6	2485.6
U.S. Vioxx Settlement Agreement charge			4,850
Depreciation and amortization	1662.2	1631.2	1988.2
Deferred income taxes	2168.5	530.1	-1781.9
Share-based compensation	376	348	330.2
In-process research and development			325.1
Taxes paid for Internal Revenue Service settlement			-2788.1
Other	-514.8	607.8	-186.1
Net changes in assets and liabilities:
Accounts receivable	-372.8	-889.4	-290.7
Inventories	-195.5	-452.1	-40.7
Trade accounts payable	23.7		117.7
Accrued and other current liabilities	-3981.6	-1710.9	451.1
Income taxes payable	-128.9	-465.3	987.2
Noncurrent liabilities	-155.9	(108)	26.2
Other	63.4	-358.3	105.1
Net Cash Provided by Operating Activities	3384.8	6571.7	6999.2
Cash Flows from Investing Activities
Capital expenditures	-1294.3	-1298.3	(1,011)
Purchases of securities and other investments	-3070.8	-11967.3	-10132.7
Proceeds from sales of securities and other investments	10713.8	11065.8	10860.2
Proceeds from sale of interest in Merial Limited	4,000
Acquisitions of businesses, net of cash acquired	(130)		-1135.9
Distribution from AstraZeneca LP		1899.3
Decrease (increase) in restricted assets	5474.3	-1629.7	-1401.1
Loans to affiliates	-7789.8
Other	33.8	95.8	10.5
Net Cash Provided by (Used by) Investing Activities	7,937	-1834.4	(2,810)
Cash Flows from Financing Activities
Net change in short-term borrowings	-1094.9	1859.9	11.4
Proceeds from issuance of debt	4,228
Payments on debt	-25.3	(1,392)	-1195.3
Purchases of treasury stock		(2,725)	-1429.7
Dividends paid to stockholders	(3,215)	-3278.5	-3307.3
Other dividends paid	(120)	-121.8	-120.8
Receivables from MSD's Parent Company	-8809.7
Proceeds from exercise of stock options	38.5	102.3	898.6
Other	-124.3	32.6	277
Net Cash Used by Financing Activities	-9122.7	-5522.5	-4866.1
Effect of Exchange Rate Changes on Cash and Cash Equivalents	65.4	-182.6	98.3
Net Increase (Decrease) in Cash and Cash Equivalents	2264.5	-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	6632.8	4368.3	5336.1

Nature of Operations

Nature of Operations
	12 Months Ended Dec. 31, 2009
Nature of Operations [Abstract]
Nature of Operations	1. Nature of Operations On November3, 2009, Merck Co., Inc. (MSD) and Schering-Plough Corporation (Schering-Plough) completed their previously-announced merger (the Merger). In the Merger, Schering-Plough acquired all of the shares of MSD, 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. (MSDs Parent Company). MSD is a global health care company that delivers innovative health solutions through its medicines and vaccines, which are marketed directly and through joint ventures. Human health pharmaceutical products consist of therapeutic and preventive agents, sold by prescription, for the treatment of human disorders. These human health pharmaceutical products are sold 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. These human health vaccines are sold primarily to physicians, wholesalers, physician distributors and government entities. MSDs 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.

Summary of Accounting Policies

Summary of Accounting Policies
	12 Months Ended Dec. 31, 2009
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 MSD 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 MSD ownership is less than 100%, the outside shareholders interests are shown as Noncontrolling interests in equity. Investments in affiliates over which MSD has significant influence but not a controlling interest, such as interests in entities owned equally by MSD 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, MSD may be required to value assets at fair value measures that do not reflect MSDs 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 MSDs consolidated financial statements and results of operations after the date of the merger or acquisition. If MSD 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 The U.S. dollar is the functional currency for MSDs foreign subsidiaries. Cash Equivalents Cash equivalents are comprised of certain highly liquid investments with original maturities of less than three months. Inventories Inventories are valued at the lower of cost or market. The cost of a substantia

Merger with Schering-Plough Cor

Merger with Schering-Plough Corporation
	12 Months Ended Dec. 31, 2009
Merger with Schering-Plough Corporation [Abstract]
Merger with Schering-Plough Corporation	3. Merger with Schering-Plough Corporation On November3, 2009, MSD and Schering-Plough completed the Merger. In the Merger, Schering-Plough acquired all of the shares of MSD, 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. MSD shareholders received one share of common stock of MSDs Parent Company for each share of stock that they owned.

Restructuring

Restructuring
	12 Months Ended Dec. 31, 2009
Restructuring [Abstract]
Restructuring	4. Restructuring Merger Restructuring Program In February2010, MSDs Parent Company announced the first phase of a new global restructuring program (the Merger Restructuring Program) in conjunction with the integration of the legacy MSD and legacy Schering-Plough businesses. This Merger Restructuring Program is intended to optimize the cost structure of MSDs Parent Company and its subsidiaries. As part of the first phase of the Merger Restructuring Program, by the end of 2012, MSDs Parent Company expects to reduce its total workforce by approximately 15% across all areas of the company worldwide. 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. This first phase of the Merger Restructuring Program is expected to be completed by the end of 2012 with the total pretax costs, including the portion attributable to MSD, estimated to be $2.6billion to $3.3billion. In connection with the Merger Restructuring Program, separation costs under existing severance programs worldwide were recorded in the fourth quarter of 2009 to the extent such costs were probable and reasonably estimable. Costs under voluntary programs and enhancement programs will be recorded in 2010 as the relevant criteria are met. Approximately 85% of the cumulative pretax costs are estimated to be 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. MSD recorded pretax restructuring costs of $403.8million in 2009 for its estimated portion of the Merger Restructuring Program costs, primarily representing employee separation costs. 2008 Global Restructuring Program In October2008, MSD 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, MSD expects to eliminate approximately 7,200 positions 6,800 active employees and 400 vacancies across all areas of MSD 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, MSD 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. During 2009, basic research facilities in Pomezia, Italy and Tsukuba, Japan were sold and the operations conducted at the basic research facility in Seattle were closed. MSD has also sold or closed certain other facilities and sold related assets in connection with the 2008 Restructuring Program. In connection with the 2008 Restructuring Program, separation costs under existing severance programs worldwide were recorded in the third quarter of

Acquisitions, Research Collabor

Acquisitions, Research Collaborations and License Agreements
	12 Months Ended Dec. 31, 2009
Acquisitions, Research Collaborations and License Agreements [Abstract]
Acquisitions, Research Collaborations and License Agreements	5. Acquisitions, Research Collaborations and License Agreements In December2009, MSD and Avecia Investments Limited announced a definitive agreement under which MSD 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, MSD 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 MSDs results of operations after the acquisition date. In September2009, MSD 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, MSD will assume responsibility for all aspects of commercialization of Afluria in the United States. CSL will supply Afluria to MSD and will retain responsibility for marketing the vaccine outside the United States. Afluria is indicated for the active immunization of persons ages 6months and older against influenza disease caused by influenza virus subtypes A and type B present in the vaccine. In July2009, MSD 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 Phase II clinical development for the prevention of stroke in patients with atrial fibrillation. In return for an exclusive worldwide license to betrixaban, MSD 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. MSD will assume all development and commercialization costs, including the costs of Phase III clinical trials. Portola retained an option (a)to co-fund Phase III clinical trials in return for additional royalties and (b)to co-promote betrixaban with MSD in the United States. The term of the agreement commenced in August2009 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 MSD in the event that the parties or MSD decide to cease development of betrixaban for safety or efficacy. In addition, MSD may terminate the agreement at any time upon 180days prior written notice. Portola

Collaborative Arrangements

Collaborative Arrangements
	12 Months Ended Dec. 31, 2009
Collaborative Arrangements [Abstract]
Collaborative Arrangements	6. Collaborative Arrangements MSD 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. MSD 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 Note 2, 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. MSD 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 MSDs most significant arrangement is discussed below. Cozaar/Hyzaar In 1989, MSD 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 angiotensin II receptor antagonists, which include Cozaar and Hyzaar. In return, MSD 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, MSD 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 April2010. In addition, the patent for Cozaar expired in a number of major European markets in March2010. Hyzaar lost patent protection in a number of major European markets in February2010.

Financial Instruments

Financial Instruments
	12 Months Ended Dec. 31, 2009
Financial Instruments [Abstract]
Financial Instruments	7. Financial Instruments Derivative Instruments and Hedging Activities MSD 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 MSDs revenues and earnings in foreign affiliates is exposed to changes in foreign exchange rates. The objectives and accounting related to MSDs 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 MSDs revenues are denominated in foreign currencies. MSD 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, MSDs ability to fund research and other dollar-based strategic initiatives at a consistent level may be impaired. MSD 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, MSD 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. MSD 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. MSD manages its anticipated transaction exposure principally with purchased local currency put options, which provide MSD 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 value reduces to zero, but MSD benefits from the increase in the value of the anticipated fore

Inventories

Inventories
	12 Months Ended Dec. 31, 2009
Inventories [Abstract]
Inventories	8. Inventories Inventories at December31 consisted of: 2009 2008 Finished goods $ 523.6 $ 432.6 Raw materials and work in process 2,404.8 2,147.1 Supplies 98.8 98.6 Total (approximates current cost) 3,027.2 2,678.3 Reduction to LIFO costs (169.6 ) $ 2,857.6 $ 2,678.3 Recognized as: Inventories $ 2,147.7 $ 2,091.0 Other assets 709.9 587.3 Inventories valued under the LIFO method comprised approximately 53% 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, the majority of which are noncurrent vaccine inventories.

Goodwill and Other Intangibles

Goodwill and Other Intangibles
	12 Months Ended Dec. 31, 2009
Goodwill and Other Intangibles [Abstract]
Goodwill and Other Intangibles	9. Goodwill and Other Intangibles The following table summarizes goodwill activity: Goodwill balance as of January1, 2008 $ 1,454.8 Other (16.1 ) Goodwill balance as of December31, 2008 1,438.7 Additions 0.3 Goodwill balance as of December31, 2009 $ 1,439.0 Other intangibles at December31 consisted of: 2009 2008 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Net Amount Amortization Net Products and product rights $ 1,627.0 $ 1,531.2 $ 95.8 $ 1,629.1 $ 1,501.2 $ 127.9 In-process research and development(1) 130.3 130.3 Tradenames 65.7 41.2 24.5 64.0 37.5 26.5 Other 743.1 470.5 272.6 742.5 371.5 371.0 Total identifiable intangible assets $ 2,566.1 $ 2,042.9 $ 523.2 $ 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, MSD will make a separate determination as to the useful life of the assets and begin amortization. Aggregate amortization expense was $134.0million 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, $130.8million; 2011, $103.0million; 2012, $84.0million; 2013, $63.6 million; 2014, $4.0million.

Joint Ventures and Other Equity

Joint Ventures and Other Equity Method Affiliates
	12 Months Ended Dec. 31, 2009
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 MSDs joint ventures and other equity method affiliates and was comprised of the following: Years Ended December 31 2009 2008 2007 Merck/Schering-Plough $ 1,463.5 $ 1,536.3 $ 1,830.8 AstraZeneca LP 674.3 598.4 820.1 Other(1) 365.2 425.9 325.6 $ 2,503.0 $ 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, MSD 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 provides 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 provide for the sharing of operating income generated by the Merck/Schering-Plough partnership (the MSP Partnership) based upon percentages that vary 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 receives 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, are not included in Equity income from affiliates. However, these costs are 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. See Note 12 for information with respect to litigation involving the MSP Partnership and the Partners related to the sale and promotion of Zetia and Vytorin. Summarized financial information for the MSP Partnership is as follows: Years Ended December 31

Loans Payable, Long Term Debt a

Loans Payable, Long Term Debt and Other Commitments
	12 Months Ended Dec. 31, 2009
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 $298.2million of long-dated notes that are subject to repayment at the option of the holders on an annual basis, $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, and short-term foreign borrowing of $46.3million. 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 borrowings. Long-term debt at December31 consisted of: 2009 2008 1.875% notes due 2011 $ 1,249.8 $ 5.00% notes due 2019 1,242.5 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 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 223.1 319.0 $ 8,067.8 $ 3,943.3 MSD 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 Note 7). 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 8.5%. On June25, 2009, MSD 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 MSDs option at the redemption prices specified in each notes associated prospectus. Proceeds from the notes were used to fund a portion of the cash consideration of the Merger. Also, in connection with the Merger, effective as of November3, 2009, MSDs Parent Company executed a full and unconditional guarantee of the existing debt of MSD and MSD executed a full and unconditional guarantee of the existing debt of MSDs Parent Company (excluding commercial paper), including for payments of principal and interest. The aggregate maturities of long-term debt for each of the next five years are as follows: 2010, $6.3million; 2011, $1.5billion; 2012, $4.2million; 2013, $529.9million; 2014, $15.8million. Also, in connection with the Merger, on March

Contingencies and Environmental

Contingencies and Environmental Liabilities
	12 Months Ended Dec. 31, 2009
Contingencies and Environmental Liabilities [Abstract]
Contingencies and Environmental Liabilities	12. Contingencies and Environmental Liabilities MSD 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. MSD 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. MSDs 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. MSD 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 MSD products first sold after that date. MSD 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 MSD 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, MSD 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 approximately 10 plaintiff groups are included in a coordinated proceeding in New Jerse

Equity

Equity
	12 Months Ended Dec. 31, 2009
Equity [Abstract]
Equity	13. Equity Capital Stock and Investment in MSDs Parent Company A summary of common stock and treasury stock transactions (shares in millions) is as follows: 2009 2008 2007 Treasury Stock / Investment in MSDs Common Parent Common Treasury Common Treasury Stock Company Stock Stock Stock Stock Balance as of January 1 2,983.5 875.8 2,983.5 811.0 2,976.2 808.4 Schering-Plough Merger (2,499.5 ) Issuances of shares in connection with the acquisition of NovaCardia, Inc. 7.3 Other issuances (1) (1.5 ) (4.7 ) (23.9 ) Purchases of treasury stock 69.5 26.5 Cancellations of treasury stock (2) (484.0 ) (484.0 ) Balance as of December31 (3) 390.3 2,983.5 875.8 2,983.5 811.0 (1) Issuances primarily reflect activity under share-based compensation plans prior to the Merger. (2) Pursuant to the Merger agreement, certain treasury shares were cancelled. (3) At December31, 2009, there are 100 shares of common stock outstanding. Noncontrolling Interests In connection with the 1998 restructuring of AMI, MSD assumed a $2.4billion par value preferred stock obligation with a dividend rate of 5% per annum, which is carried by KBI and included in Noncontrolling interests.

Share-Based Compensation Plans

Share-Based Compensation Plans
	12 Months Ended Dec. 31, 2009
Share-Based Compensation Plans [Abstract]
Share-Based Compensation Plans	14. Share-Based Compensation Plans MSDs Parent Company has share-based compensation plans under which employees, non-employee directors and employees of certain of MSDs equity method investees may be granted options to purchase shares of MSDs Parent Company common stock at the fair market value at the time of grant. In addition to stock options, MSDs Parent Company grants performance share units (PSUs) and restricted stock units (RSUs) to certain management level employees. These plans were approved by the MSDs Parent Companys shareholders. As a result of the Merger on November3, 2009, MSD became a wholly-owned subsidiary of the MSDs Parent Company. In conjunction with the Merger, outstanding MSD share-based compensation awards became identical awards of MSDs Parent Company. For periods prior to the Merger, MSD recorded the expense in accordance with applicable share-based compensation accounting guidance. For periods subsequent to the Merger, an allocation of the expense for employees of MSD and its subsidiaries has been recorded using a consistent method with MSDs Parent Company. Management believes this allocation method is reasonable. The tables below reflect acvitity for these awards for MSD employees for the pre and post-Merger periods through December31, 2009. At December31, 2009, 105.5million shares collectively were authorized for future grants under the MSDs Parent 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 MSDs Parent Company shares. Employee stock options are granted to purchase shares of MSDs Parent Company common stock at the fair market value at the time of grant. These awards generally vest one-third each year over a three-year period, with a contractual term of 10years. RSUs are stock awards that are granted to employees and entitle the holder to shares of common stock as the awards vest, as well as non-forfeitable dividend equivalents. The fair value of the stock option and RSU awards is determined and fixed on the grant date based on the MSDs Parent Companys stock price. PSUs are stock awards where the ultimate number of shares issued will be contingent on the MSDs Parent Companys performance against a pre-set objective or set of objectives. The fair value of each PSU is determined on the date of grant based on the MSDs Parent Companys stock price. Over the PSU performance period, the number of shares of stock that are expected to be issued will be adjusted based on the probability of achievement of a performance target and final compensation expense will be recognized based on the ultimate number of shares issued. RSU and PSU distributions will be in shares of MSDs Parent Company stock after the end of the vesting or performance period, generally three years, subject to the terms applicable to such awards. Total pretax share-based compensation cost recorded in 2009, 2008 and 2007 was $376.0million, $348.0million and $330.2million, respectively, with related income tax benefits of $119.5million, $107.5million and $104.1million, re

Pension and Other Postretiremen

Pension and Other Postretirement Benefit Plans
	12 Months Ended Dec. 31, 2009
Pension and Other Postretirement Benefit Plans [Abstract]
Pension and Other Postretirement Benefits Plans	15. Pension and Other Postretirement Benefit Plans MSD 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, MSD 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. MSD uses December31 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 $ 358.1 $ 344.1 $ 377.2 $ 71.1 $ 73.2 $ 90.8 Interest cost 405.0 414.2 379.9 102.9 113.8 107.7 Expected return on plan assets (614.5 ) (559.4 ) (491.4 ) (96.7 ) (129.0 ) (130.5 ) Net amortization 122.8 70.4 149.4 18.9 (22.6 ) (16.8 ) Termination benefits 30.3 62.3 25.6 8.2 11.2 7.7 Curtailments (6.2 ) 5.7 1.1 (9.9 ) (15.9 ) (16.8 ) Settlements 2.9 8.6 5.4 Net pension and other postretirement cost $ 298.4 $ 345.9 $ 447.2 $ 94.5 $ 30.7 $ 42.1 Net pension and other postretirement benefit cost totaled $392.9million in 2009, $376.6 million in 2008 and $489.3million in 2007. The net pension cost attributable to U.S. plans included in the above table was $205.1million in 2009, $226.4million in 2008 and $302.2million in 2007. In connection with restructuring actions (see Note 4), termination charges were recorded in 2009, 2008 and 2007 on pension and other postretirement benefit plans related to expanded eligibility for certain employees exiting MSD. 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 domestic and international pension plans. Summarized information about the changes in plan assets and benefit obligation, the funded status and the amounts recorded at December31, 2009 and 2008 is as follows: Pension Benefits Other Postretirement Benefits 2009 2008 2009 2008 Fair value of plan assets at January 1 $ 5,887.6 $ 7,385.4 $ 1,088.4 $ 1,577.6 Actual return on plan assets 1,352.1 (1,959.4 ) 303.9 (512.0 ) MSD contributions 496.1 1,190.8 91.2 99.5 Effects of exchange rate changes 105.6 (90.3

Other

Other (Income) Expense, Net
	12 Months Ended Dec. 31, 2009
Other (Income) Expense, Net [Abstract]
Other (Income) Expense, Net	16. Other (Income) Expense, Net Years Ended December 31 2009 2008 2007 Interest income(1) $ (357.1 ) $ (631.4 ) $ (741.1 ) Interest expense(1) 429.6 251.3 384.3 Exchange (gains)losses (10.2 ) 147.4 (54.3 ) Other, net (3,338.1 ) (2,085.4 ) 335.9 $ (3,275.8 ) $ (2,318.1 ) $ (75.2 ) (1) Interest income in 2009 includes interest income from affiliates of $148.7 million and Interest expense in 2009 includes interest expense from affiliates of $28.3 million. 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 $3.2billion gain on the sale of MSDs interest in Merial (see Note 10), $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 Note 10), 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 MSD 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 $2.2 billion, 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 MSD violated consumer protection laws with respect to the sales and marketing of Vioxx. Interest paid was $276.9million 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
Taxes on Income [Abstract]
Taxes on Income	17. Taxes on Income Effective with the closing of the Merger, MSDs Parent Company will begin to file taxes on a consolidated basis with MSD for U.S. federal and certain state tax purposes. The income tax provision and payable balances have been computed on a separate company basis for the purpose of these financial statements. A reconciliation between the effective tax rate and the U.S. statutory rate is as follows: 2009 2008 2007 Tax Tax Tax Amount Rate Amount Rate Amount Rate U.S. statutory rate applied to income before taxes $ 3,787.9 35.0 % $ 3,476.1 35.0 % $ 1,222.3 35.0 % Differential arising from: Foreign earnings (1,082.3 ) (10.0 ) (1,269.9 ) (12.9 ) (1,196.0 ) (34.3 ) State tax settlements (108.0 ) (1.0 ) (191.6 ) (2.0 ) Foreign tax credit utilization (192.0 ) (2.0 ) State taxes 202.6 1.9 310.9 3.2 11.6 0.3 Restructuring 114.0 1.1 114.7 1.2 Gain on equity investments 95.6 0.9 29.0 0.3 In-process research and development 113.8 3.3 Other (1) (262.3 ) (2.5 ) (277.8 ) (2.7 ) (56.4 ) (1.6 ) $ 2,747.5 25.4 % $ 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 $ 6,681.8 $ 5,210.1 $ (2,525.8 ) Foreign 4,140.8 4,721.6 6,017.9 $ 10,822.6 $ 9,931.7 $ 3,492.1 Taxes on income consisted of: Years Ended December 31 2009 2008 2007 Current provision Federal $ 174.9 $ 1,053.6 $ 988.1 Foreign 394.9 292.4 687.0 State 9.2 123.3 202.2 579.0 1,469.3 1,877.3 Deferred provision Federal 2,057.1 419.0 (1,671.5 ) Foreign (83.7 ) 55.8 157.2 State 195.1 55.3 (267.7 ) 2,168.5 530.1 (1,782.0 ) $ 2,747.5 $ 1,999.4 $ 95.3 Deferred income taxes at December31 consisted of: 2009 2008 Assets Liabilities Assets Liabilities Other intangibles $ 18.8 $ 73.4 $ $ 124.9 Inventory related 235.5 248.6 Accelerated depreciation 35.9 1,057.8 1,045.1 Unremitted foreign earnings 42.6 16.7 Equity investments

Comprehensive Income

Comprehensive Income
	12 Months Ended Dec. 31, 2009
Comprehensive Income [Abstract]
Comprehensive Income	18. Comprehensive Income The components of Other comprehensive income (loss) are as follows: Year Ended December 31, 2009 Pretax Tax After Tax Net unrealized loss on derivatives $ (316.1 ) $ 125.0 $ (191.1 ) Net loss realization 60.5 (23.9 ) 36.6 Derivatives (255.6 ) 101.1 (154.5 ) Net unrealized gain on investments 205.9 (31.2 ) 174.7 Net gain realization (230.5 ) 23.6 (206.9 ) Investments (24.6 ) (7.6 ) (32.2 ) Benefit plan net (loss)gain and prior service cost (credit), net of amortization 347.5 (149.5 ) 198.0 Cumulative translation adjustment (1) (23.0 ) (23.0 ) $ 44.3 $ (56.0 ) $ (11.7 ) 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) Represents 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 $ (42.6 ) $ 111.9 Net unrealized gain on investments 30.9 63.1 Pension plan net loss (2,278.8 ) (2,440.7 ) Other postretirement benefit plan net loss (521.4 ) (596.5 ) Pension plan prior service cost (20.7 ) (26.4 ) Other postretirement benefit plan prior service cost 264.3 309.0 Cumulative translation adjustment 2.7 25.7 $ (2,565.6 ) $ (2,553.9 )

Related Party Transactions

Related Party Transactions
	12 Months Ended Dec. 31, 2009
Related Party Transactions [Abstract]
Related Party Transactions	19. Related Party Transactions As of December 31, 2009, current Receivables from affiliates were $1.0 billion, primarily reflecting a loan receivable from another subsidiary of MSDs Parent Company of $722 million that is due in October 2010, as well as interest receivables on both the current and non-current Receivables from affiliates. Non-current Receivables from affiliates were $7.1 billion and primarily represented loans receivable from other subsidiaries of MSDs Parent Company with due dates greater than one year. Receivables from MSDs Parent Company were $8.8 billion and are reflected as a reduction of shareholders equity. Receivables from affiliates and MSDs Parent Company are largely attributable to the Merger. Payables to affiliates, arising primarily from a cash pooling arrangement between MSD and MSDs Parent Company, were $859.5 million as of December 31, 2009. Subsequent to the Merger, share-based compensation of approximately $84.0 million was incurred by MSDs Parent Company on behalf of MSD and allocated to MSD. MSDs Parent Company did not incur any other significant expenses on behalf of MSD. Also subsequent to the Merger, salaries and benefits for executive officers of MSDs Parent Company of approximately $5 million were incurred at MSD and appropriately allocated to MSDs Parent Company. MSD and MSDs Parent Company share certain employees, systems and facilities and MSD provides certain services to MSDs Parent Company. MSD incurs the majority of these expenses and allocations are made between MSDs Parent Company and MSD for certain of these expenses, which in the opinion of management are reasonable allocations. Certain expenses benefit both MSD and MSDs Parent Company and for those expenses, no allocation of expense has been made to MSDs Parent Company. For the two month period subsequent to the Merger, these costs are not material to MSD or to MSDs Parent Company.

Segment Reporting

Segment Reporting
	12 Months Ended Dec. 31, 2009
Segment Reporting [Abstract]
Segment Reporting	20. Segment Reporting MSDs Parent Company 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 or through joint ventures. Human health pharmaceutical products consist of therapeutic and preventive agents, sold by prescription, for the treatment of human disorders. These human health pharmaceutical products are sold 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. These human health vaccines are sold 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. Segment composition reflects certain managerial changes that have been implemented. Segment disclosures for prior periods have been recast on a comparable basis with 2009. MSDs Parent Company also has an all other category which includes other non-reportable segments, including animal health and consumer health care, as well as revenue from MSDs relationship with AZLP. The accounting policies for the segments described above are the same as those described in Note 2. Revenues and profits for MSDs operations within MSDs Parent Company segments are as follows: Pharmaceutical All Other(1) Total Year Ended December31, 2009 Segment revenues $ 22,192.4 $ 1,470.6 $ 23,663.0 Segment profits 14,594.6 1,616.0 16,210.6 Included in segment profits: Equity income from affiliates 1,579.8 751.7 2,331.5 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 16,586.3 Included in segment profits: Equity income from affiliates 1,895.9 820.0 2,715.9 Depreciation and amortization (137.1 ) (137.1 ) (1) All other for MSD primarily includes revenue and equity income from MSDs relationship with AZLP and equity income from Merial until its disposition on September17, 2009. Segment profits are comprised of segment revenues less certain elements of materials and production costs and operating

Merck Schering-Plough Cholester

Merck Schering-Plough Cholesterol Partnership Combined Financial Statements
	12 Months Ended Dec. 31, 2009
Merck/Schering-Plough Cholesterol Partnership Combined Financial Statements [Abstract]
Merck/Schering-Plough Cholesterol Partnership Combined Financial Statements	Schering-Plough Cholesterol Partnership Combined Financial Statements 2.Financial Statement Schedules Merck/Schering-Plough Cholesterol Partnership Combined Financial Statements Merck/Schering-Plough Cholesterol Partnership Combined Statement of Net Sales and Contractual Expenses Year Ended December31, 2009 ($ in millions, unaudited) Net sales $ 4,128 Cost of sales 173 Selling, general and administrative 798 Research and development 203 1,174 Income from operations $ 2,954 The accompanying notes are an integral part of this combined financial statement. Merck/Schering-Plough Cholesterol Partnership Combined Balance Sheet December31, 2009 ($ in millions, unaudited) Assets Cash and cash equivalents $ 11 Accounts receivable, net 337 Receivable from MSD, net 64 Inventories 84 Prepaid expenses and other assets 10 Total assets $ 506 Liabilities and Partners Capital Rebates payable $ 259 Payable to New Merck, net 119 Accrued expenses and other liabilities 54 Total liabilities 432 Commitments and contingent liabilities (notes 3 and 5) Partners capital 74 Total liabilities and Partners capital $ 506 The accompanying notes are an integral part of this combined financial statement. Merck/Schering-Plough Cholesterol Partnership Combined Statement of Cash Flows Year Ended December31, 2009 ($ in millions, unaudited) Operating Activities: Income from operations $ 2,954 Adjustments to reconcile income from operations to net cash provided by operating activities: Accounts receivable, net (26 ) Inventories (5 ) Prepaid expenses and other assets 4 Rebates payable (4 ) Payable to Partners, net (126 ) Accrued expenses and other liabilities 10 Non-cash charges 51 Net cash provided by operating activities 2,858 Financing Activities: Contributions from Partners 438 Distributions to Partners (3,489 ) Net cash used for financing activities (3,051 ) Net decrease in cash and cash equivalents (193 ) Cash and cash equivalents, beginning of period 204 Cash and cash equivalents, end of period $ 11 The accompanying notes are an integral part of this combined financial statement. Merck/Schering-Plough Cholesterol Partnership Combined Statement of Partners Capital (Deficit) ($ in millions) New Merck MSD Total Balance, January 1, 2009 $ 9 $ 111 $ 120 Contributions from Partners (unaudited) 158 280 438 Income from operations (unaudited) 1,478 1,476 2,954 Distributions to Partners (unaudited) (1,693 ) (1,745 ) (3,438 ) Balance, December31, 2009 (unaudited) $ (48 ) $ 122 $ 74 The accompanying note