CORPORATE RESPONSIBILITY REPORT 2012 - Addison

309 Pages·2014·10.7 MB·English

CORPORATE
RESPONSIBILITY
REPORT
2012
MERCK CORPOOORRRAAATTTEEE RRREEESSSPPOONNSIBILITY REPORT
CORPORATE RESPONSIBILITY
At Merck, corporate responsibility is
our daily commitment to discovering
innovative solutions to the world’s
biggest health challenges.
It is this simple promise that informs
all of our actions as we apply our global
resources, our talents and our scientifi c
and operational expertise to some of
the most signifi cant health, social,
environmental and economic challenges
in the world today. Ultimately, it helps us
to discover better ways to deliver greater
value to both shareholders and society.
Through innovative research,
groundbreaking partnerships and smarter
processes, we are focusing on four
areas of priority: Access to Health,
Environmental Sustainability, Employees,
and Ethics & Transparency. With a focus
on these priority areas across our entire
organization, we are committed to leading
the future of healthcare.
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vaccines, we believe Merck can have The global economy continues to be
a profound impact on people’s lives for uncertain, an ongoing challenge to
years to come. pharmaceutical companies that can
invest a billion dollars or more over the
In addition, we are resolute in our promise 10 to 20 years it takes to bring a new
to develop and reward our employees, drug to market.
protect the environment and support
the communities in which we work and But we are determined to advance our
live. Furthermore, we are operating mission, and, in 2012, we made progress
ethically and transparently in order to through a number of important initiatives:
earn and retain the trust and confi dence
of our stakeholders. This report, which • Expanding our product portfolio,
also serves as our annual Communication as well as our local development
on Progress Report to the UN Global and distribution capacity, through
Compact, is one of the ways in which important joint ventures
we increase our transparency.
KENNETH C. FRAZIER, CHAIRMAN • Developing new partnerships to
AND CHIEF EXECUTIVE OFFICER
reduce maternal mortality through
We continue to deliver long-term returns
Merck for Mothers, our 10-year,
by pursuing opportunities where the
LETTER FROM THE CEO $500 million initiative that is applying
need is great and where we have unique
the company’s scientifi c and business
capabilities to make a real difference in
expertise—as well as its fi nancial
people’s lives.
and human resources—to address this
At Merck, corporate responsibility
issue around the world
underscores our steadfast But the challenges, too, are great. Of the
commitment to help the world seven billion people alive today, six billion • Celebrating the 25th anniversary of
be well. live in emerging and developing markets. Merck’s MECTIZAN® (ivermectin)
We believe we have an obligation, as well Donation Program and its success in
Merck people share an unwavering as an opportunity, to help meet their unmet contributing to the goals of eliminating
commitment to our mission to save and health needs by advancing effective river blindness and lymphatic fi lariasis
improve lives around the world, and to and safe medicines at affordable and
• Strengthening the impact that Merck
uphold the highest standards of ethics sustainable prices.
employees have on communities
and integrity.
throughout the world, by recently
In the developed world, the costs to
increasing paid time off, from 20
We believe that innovative and productive treat chronic diseases are large and
to 40 hours per year, for employee
research and development is the only increasing. Today these costs represent
volunteerism; throughout 2012, Merck
sustainable way to create true and approximately three-quarters of all
employees volunteered through a
enduring value for all of our stakeholders, healthcare expenses, and two-thirds of
variety of programs, resulting in more
and we are focused on tackling some of the increase in healthcare spending is due
than 221,000 total volunteer hours
healthcare’s most daunting challenges. to the increased prevalence of treated
By continuing to invest in the discovery chronic disease. • Emphasizing the importance of
and development of medicines and raising ethical and compliance-
related concerns through an updated
mandatory training program, which
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MERCK CORPOOORRRAAATTTEEE RRREEESSSPPOONNSIBILITY REPORT
provides additional guidance on the Know that we take very seriously our
Merck Code of Conduct special responsibility to provide genuine
and enduring value to customers,
• Identifying and implementing major
patients, employees, communities and
projects to cut water use, protect
shareholders for generations to come.
water quality and reduce operating
costs through improvements to water
Be well,
and wastewater infrastructure
We are proud of our progress, but remain
focused on the work ahead. We have
Kenneth C. Frazier
made progress in meeting the objectives
Chairman and
identifi ed in Merck’s Access to Health
Chief Executive Offi cer
Guiding Principles, but we must address
July 2013
the ongoing challenge of creating a
companywide strategy to expand access
to our discoveries in both developed and
developing markets while continuing to
build a sustainable business.
To do this, I believe that healthcare
companies, regulators, payers,
governments, and other stakeholders
must work collaboratively to bring safe,
effective, affordable medicines and
vaccines to the world’s people.
It is critical, therefore, that Merck
continues to take a leadership role in
the pharmaceutical industry, building
partnerships with a wide range of
stakeholders to advance R&D, enable
access to medicines and vaccines,
and help improve quality of life across
the globe.
The world is changing, but Merck’s focus
on pursuing the best science and building
a sustainable business is steadfast, and
even more important, our people remain
deeply committed to our mission and
our company.
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Among its responsibilities, the
Committee takes a leadership role in
shaping the corporate governance of
the company. The Committee also
advises the Board and management on
policies and practices that pertain to the
company’s responsibilities as a global
corporate citizen, including our special
obligations as a healthcare company with
products and services that affect health
and quality of life around the world, and
our commitment to uphold the highest
standards of ethical behavior in all of our
dealings. The Committee’s combined
responsibilities refl ect the strong
alignment in our approach to corporate
WILLIAM B. HARRISON, JR.
governance, policy and responsibility.
BOARD LETTER
As Lead Director of the Board and Chair
of the Governance, Public Policy and
Corporate Responsibility Committee, I am
proud of Merck’s legacy of achievement
Dear Stakeholders,
in helping the world be well. I also
understand the challenges we face as we
Merck has a long history of bringing
continue to deliver on Merck’s mission to
innovative medicines to market to
develop and provide innovative products
address some of the world’s most
and services that save and improve lives
profound unmet medical needs. We do
around the world.
this while delivering long-term returns
on our company’s investment in R&D
We are confi dent in the innovation and
and, critically, within a robust governance
integrity that drive and direct our future
structure and in a manner that is ethical
course. We care deeply about both
and transparent.
the results we achieve and how we
achieve them.
In May 2012, the Board merged the
Governance Committee and the
Sincerely,
Public Policy and Social Responsibility
Committee in recognition of the value of
incorporating policy review and corporate
responsibility within the company’s
William B. Harrison, Jr.
governance framework.
Lead Director and Chair, Committee
on Governance, Public Policy and
Corporate Responsibility
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OUR APPROACH MATERIALITY
• Environmentally sustainable ways to
meet the world’s health needs now
and in the future
We aspire to be the best healthcare • Better ways to strengthen a workplace A materiality assessment is an
company in the world and are where our employees—and our important means to ensure that
committed to improving health business—can thrive annual corporate responsibility
and well-being around the world by reports refl ect the organization’s
• Better ways to build and strengthen
providing leading innovations and signifi cant economic, environmental,
trusted relationships
solutions for tomorrow. and social impacts or fundamentally
• The highest ethical standards infl uence the assessments and
At Merck, our vision is to make a and communicating with decisions of stakeholders.1
difference in the lives of people globally greater transparency
through our innovative medicines, In 2010, Merck conducted a materiality
vaccines, biologic therapies, consumer Since successfully managing social, assessment to guide us in the
health and animal health products. We ethical and environmental issues involves development of our corporate responsibility
have made it our mission to provide everyone at Merck, we established a framework and to ensure that our strategic
innovative, distinctive products and companywide corporate responsibility approach was linked directly to our core
services that save and improve lives and framework, as well as a list of key business drivers. Our approach includes
satisfy customer needs; to be recognized performance indicators to measure the precise criteria in certain areas including:
as a great place to work; and to provide company’s performance and progress in business relevance; satisfying stakeholder
investors with a superior rate of return. our areas of strategic focus. demands; opportunities for improvement;
and areas of potential leadership.
Our corporate responsibility approach is Integrated into our approach to corporate
aligned with the company’s mission and responsibility is also a commitment Key issues were identifi ed through a
values and articulates how we see our to constructive engagement with consideration of numerous sources,
responsibilities in the areas of access to stakeholders. We recognize that issues including:
health, ethical and transparent business that matter to key stakeholders can very
practices, environmentally sustainable quickly become material issues for our • Merck corporate plans, objectives
operations, scientifi c advancement, shareholders. So, we seek to balance and strategies
employee wellness and value-creation for our responsibilities in ways that support
• Company policies and initiatives
our shareholders. our fi duciary duty to generate long-term
related to company policies
shareholder value, while also considering
In short, corporate responsibility at Merck the needs of other stakeholders. • Employee surveys and other input
is a daily commitment and a simple Learn more about our stakeholder from employees
promise that is embedded in our business engagement process.
• Customer feedback obtained through
and informs all of our individual actions. It
focus groups and other methods
extends to how we achieve our business
goals by discovering and demonstrating: • Shareholder resolutions and other
feedback received through ongoing
• Smart, sustainable ways to expand dialogue with shareholders
global access to effective healthcare
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• Input from investors and determine the areas of our corporate
investor groups committed to responsibility approach that require
sustainable investing further review and identify issues that we
might clarify in the future.
• Partners, nongovernmental
organizations, suppliers and
Merck recognizes the importance
other stakeholders
of issues that may not be within the
• Media coverage company’s immediate or total control,
such as climate change, global poverty
• Stakeholder feedback on prior
and access to medicines, particularly in
corporate responsibility reporting
the developing world. We believe that
• Industry benchmarking we can, however, infl uence progress
in these areas by addressing these
• The Global Reporting Initiative (GRI),
issues, particularly through public policy
Access to Medicine Index, the UN
and advocacy or through partnerships
Global Compact principles and other
with others.
external guidelines
We will continue to seek additional
Based on this analysis, an overall set
feedback in order to further refi ne our
of issues were identifi ed as those
key corporate responsibility issues in
most signifi cant to the company. The
future reports. While we had anticipated
key issues in this report have been
including a materiality index in this
approved by Merck’s Public Policy and
report, a new materiality assessment is
Responsibility Council based on the
being conducted in 2013 to ensure that
three parameters used to defi ne and
we capture those issues that are most
determine materiality for the purpose of
important to our stakeholders as well as
our corporate responsibility reporting:
new and evolving areas of interest.
1. Impact on Merck’s ability to achieve
1 https://www.globalreporting.org/resourcelibrary
its business strategy /Materiality.pdf
2. Level of concern to
external stakeholders
3. Degree to which Merck can control
and infl uence the topic or issue
As part of our ongoing stakeholder
engagement process, we review
the suggestions and expectations of
our stakeholders to ensure that we
are reporting on issues that are of
most relevance to them, as compared
with those identifi ed through our
own evaluations. In this way, we can
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CR GOVERNANCE
The Offi ce of Corporate Responsibility, within their respective areas. In addition,
which supports the company’s business the members of the working group, a
strategy, is accountable for producing an diverse selection of employees from
annual corporate responsibility report. all divisions of the company, serve as
Merck aspires to be open and
To contact members of the Offi ce content experts in their respective
transparent about how we operate
of Corporate Responsibility, please areas and work with the Offi ce of
in order to earn and retain the trust
click here. Corporate Responsibility to help set
and confi dence of our customers,
goals and develop metrics that support
employees, shareholders and
The Public Policy and and measure Merck’s overall corporate
other important stakeholders. Our
Responsibility Council responsibility strategy and objectives.
reporting and governance structure is
In addition to the Offi ce of Corporate
an integral part of this commitment.
Responsibility, Merck established Executive Committee
the Public Policy and Responsibility Our Executive Committee manages the
The Offi ce of Corporate Responsibility
Council, a senior-level decision-making business of Merck, and is headed by
governance body responsible for Merck’s Chairman and Chief Executive
Merck’s corporate responsibility
developing and monitoring Merck’s Offi cer, Kenneth C. Frazier. The
performance is dependent on all Merck
corporate responsibility approach, targets committee’s members, representing
employees—from Merck’s Chairman
and progress against key performance the many areas of the company, are
and CEO to staff in each business
indicators. Membership includes senior responsible for reviewing the nonfi nancial
unit, subsidiary, manufacturing plant
Merck leaders across all divisions corporate responsibility indicators
and research laboratory. All of us at
and major functions. The council’s annually and the company’s progress
Merck are aware of our corporate
responsibilities include reviewing external against our corporate responsibility
responsibilities through the Merck Code
issues that may affect Merck’s business commitments, and reviewing and
of Conduct, Our Values and Standards,
and reputation; providing high-level approving the annual corporate
but we also recognize that a central
guidance on Merck’s overall approach to responsibility report. Learn more.
coordinating function is necessary to
corporate responsibility, such as deciding
ensure a comprehensive approach to
on priority issues; developing policies Board Committee on
corporate responsibility.
and position statements; identifying key Governance, Public Policy &
external stakeholders and engaging in Corporate Responsibility
The Offi ce of Corporate Responsibility
outreach; providing input into Merck’s Six independent directors comprise
coordinates the development,
annual corporate responsibility report; and Merck’s Board Committee on
implementation and communication of
providing ongoing counsel and guidance Governance, Public Policy & Corporate
Merck’s global corporate responsibility
to the Offi ce of Corporate Responsibility. Responsibility, which is responsible
approach and, with the Public Policy and
for advising the Board of Directors and
Responsibility Council, is responsible
The Corporate Responsibility Report management on company policies and
for reporting on Merck’s corporate
Working Group practices that pertain to the company’s
responsibility performance. The Offi ce
Each member of the Corporate responsibilities as a global corporate
of Corporate Responsibility works with
Responsibility Report Working Group citizen; its special obligations as a
business units and functional areas to
works directly with a member of the healthcare company whose products and
integrate Merck’s corporate responsibility
Public Policy and Responsibility Council to services affect health and quality of life
principles into business policies,
promote further integration of corporate around the world; and its commitment
strategies and practices—and brings
responsibility into the business. Individual to the highest standards of ethics and
the voice of external stakeholders into
members have been chosen to be active integrity in all its dealings.
decision-making processes.
advocates for corporate responsibility
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Additionally, the committee is responsible
for taking a leadership role in shaping the
corporate governance of the company,
including the development of a set of
corporate governance guidelines for
Board approval.
In addition to the Board Committee on
Governance, Public Policy & Corporate
Responsibility, other Board committees
oversee issues related to corporate
responsibility, such as audit and
compliance, executive compensation
and research.
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STAKEHOLDER
our pages on specifi c stakeholder Payers
groups that we work with, feedback that
we’ve received, and how we work with We are aware of payers’ concerns
ENGAGEMENT
patient groups. over rising healthcare costs and limited
budgets, and we listen to the debates
STAKEHOLDER GROUPS on how to make medicines and vaccines
At Merck, we understand that we more affordable and accessible. We work
must rise to the challenge of greater with payers worldwide to make sure
stakeholder expectations. they understand that the prices of our
Engagement may take the form
products refl ect their true value. We also
of one-on-one meetings, expert
We also recognize that we can’t solve develop programs with payers to make
input forums or roundtable
major health, environmental and sure our products can reach the people
discussions, industry coalitions,
economic challenges alone, but must who need them most. To learn more
or formal partnerships.
collaborate with others who share about our access initiatives, click here.
our commitment and who bring their
Patients and Their Families
own unique expertise to the table. Governments, Multilateral
This understanding forms the core of Organizations and Regulators
Everything we do is ultimately for
Merck’s approach and commitment to
patients, for whom we have an important
stakeholder engagement. We are committed to conducting our
responsibility to ensure that our
business according to the letter and
innovative products meet their health
Merck conducts stakeholder engagement spirit of laws and regulations, as well
needs. For more information on our work
at both the corporate and the local level, as the various standards of business
with patient groups, please click here.
depending on the issue. We engage with practice that we endorse. Where laws or
industry, governments, policy makers, regulations do not exist or are inadequate,
Doctors, Healthcare Professionals
non-governmental organizations (NGOs), we have created our own standards and
and Scientists
opinion leaders, patient groups, academic use them to guide our practices.
organizations, our employees and others
Doctors and patients look to us to provide
to inform our policies, our practices and We work with policy makers,
accurate and balanced information
the development of our products. legislators, multilateral organizations
about our products. We are therefore
and governments worldwide to ensure
committed to providing appropriate
Our intention is to build lasting that policy and regulatory environments
and balanced information to physicians
relationships with our stakeholders from globally, nationally and locally foster
and other healthcare providers about
the outset, to understand their objectives, patient access to medicines and
our medicines and vaccines, and about
their expectations of Merck and the vaccines, and that they are conducive to
our ongoing research. And we interact
potential for collaboration, and to enhance ethical business practices, science and
continually with physicians, healthcare
their understanding of—and trust in— innovation. To learn more about our public
professionals and researchers to conduct
us. We strive to exchange information, policy and advocacy positions, click here.
research and clinical trials, to share
views and recommendations; share
information and to gain new perspectives
activities and progress against key Shareholders
on needs and opportunities. For more
goals; and work in partnership toward
information on our interactions with these
common objectives. We strive to create shareholder value
stakeholders, please click here.
by identifying opportunities to meet
For more information on our stakeholder customer needs and by managing our
engagement efforts, you may also visit business responsibly to achieve superior
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