Merck Provides Information on Impact of U.S. Health Care Reform Legislation

Company Reiterates Long Term Financial Targets

WHITEHOUSE STATION, N.J.--(BUSINESS WIRE)-- Merck & Co., Inc. (NYSE: MRK) today provided information on the expected impact of the recently enacted U.S. Health Care Reform legislation.

With the passage of health care reform this year, there will be improvements in access to coverage and important market reforms that begin this year. The more significant changes and improvements to coverage and access begin in 2014. Many companies will begin to incur costs related to the Health Care Reform legislation starting in 2010. These costs include increased Medicaid rebates and a one-time non-cash charge related to taxes on post-retirement medical benefits.

Accordingly, in the first quarter of 2010, Merck anticipates that Medicaid rebates and other impacts will reduce revenue by approximately $35 million. The company also plans to take a first quarter non-cash charge, related to the elimination of a tax benefit for retiree prescription drug coverage, of approximately $150 million, which will be excluded from first quarter 2010 non-GAAP earnings per share.

For the full year 2010, Merck anticipates that the increased Medicaid rebates (including Managed Medicaid) and other impacts will reduce revenue by approximately $170 million, which includes the first quarter impact of $35 million mentioned above.

The company estimates that the unfavorable sales impact related to the passage of this legislation, in 2011 will be approximately $300-$350 million.

Merck continues to target a high single-digit non-GAAP EPS compound annual growth rate for the combined company from 2009 to 2013 when compared to Merck 2009 non-GAAP EPS.

Merck previously announced that it will provide its first quarter 2010 sales and earnings announcement on May 4, 2010.

About Merck

Today's Merck is a global healthcare leader working to help the world be well. Merck is known as MSD outside the United States and Canada. Through our prescription medicines, vaccines, biologic therapies, and consumer care and animal health products, we work with customers and operate in more than 140 countries to deliver innovative health solutions. We also demonstrate our commitment to increasing access to healthcare through far-reaching policies, programs and partnerships. Merck. Be well. For more information, visit

Forward-Looking Statement

This news release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about the benefits of the merger between Merck and Schering-Plough, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Merck’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the possibility that the expected synergies from the merger of Merck and Schering-Plough will not be realized, or will not be realized within the expected time period, due to, among other things, the impact of pharmaceutical industry regulation and pending legislation that could affect the pharmaceutical industry; the risk that the businesses will not be integrated successfully; disruption from the merger making it more difficult to maintain business and operational relationships; Merck’s ability to accurately predict future market conditions; dependence on the effectiveness of Merck’s patents and other protections for innovative products; the risk of new and changing regulation and health policies in the U.S. and internationally and the exposure to litigation and/or regulatory actions.

Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in Merck’s 2009 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (


Merck & Co., Inc.
David Caouette, 908-423-3461
Amy Rose, 908-423-6537
Joe Romanelli, 908-423-5088
Carol Ferguson, 908-423-4465

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