As part of our business strategy, Merck is changing the way it approaches every aspect of our business in order to regain an industry leadership position. The initial phase of the strategy announced in 2005 was designed to reduce the Company’s cost structure, increase efficiency and enhance competitiveness.

On October 22, 2008, Merck outlined the next steps in the Company's ongoing efforts to reduce its cost structure, increase efficiency and enhance competitiveness. As part of the 2008 restructuring program, Merck 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 percent of the total reductions will occur in the United States. To streamline management layers across the Company, Merck will reduce its total number of senior and mid-level executives by approximately 25 percent. These positions are in addition to the 11,250 positions eliminated as part of the 2005 restructuring program, which was substantially complete at the end of September 2008.

During 2008, the Company eliminated approximately 5,800 positions in connection with the program. Of the positions eliminated in 2008, approximately 1,750 related to the 2008 restructuring program (which commenced in October 2008) and 4,050 related to the 2005 restructuring program. The position eliminations are comprised of actual headcount reductions, the elimination of contractors and vacant positions. As of December 31, 2008, Merck has approximately 55,200 employees.

The restructuring effort involves all areas of the Company. For example, Merck has implemented a new, more customer-centric selling model designed to provide Merck with a meaningful competitive advantage and help physicians, patients and payers improve patient outcomes. The Company is also making greater use of outside technology resources, centralizing common sales and marketing activities, and consolidating and streamlining its operations. Merck's manufacturing division will further focus its capabilities on core products and outsourcing non-core manufacturing. In addition, Merck is enhancing its research operations to expand access to worldwide external science and incorporate it as a key component of the Company's pipeline, which will help ensure a more sustainable pipeline by translating basic research productivity into late-stage clinical success. As a result, basic research operations will be organized to consolidate work in support of a given therapeutic area into one of four locations. This will provide a more efficient use of research facilities and result in the closure of three basic research sites in Tsukuba, Japan; Pomezia, Italy; and Seattle, Washington, by the end of 2009.

Through these difficult but necessary actions, the Company is committed to treating employees with fairness and respect. Eligible employees receive benefits and other services including severance pay, continuance of health care benefits and outplacement services to assist them.

For updated information on Merck's restructuring program, please see our most recently filed quarterly report on Form 10-Q or annual report on Form 10-K.

Restructuring Performance Summary 2005-2008

	2008	2007	2006	2005
Position eliminations	5,800	2,400	3,700	1,100

Merck eliminated a total of 13,000 positions between 2005 and 2008.