##### 



As filed with the Securities and Exchange Commission on
    February 28, 2007
    UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 WASHINGTON, D. C. 20549
      FORM 10-K
 (MARK ONE)þ

Annual Report Pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934For the Fiscal Year Ended
    December 31, 2006oro

Transition Report Pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934For the transition period from
    ________ to ________   Commission File
    No. 1-3305
      Merck & Co.,
    Inc.
 One Merck Drive
 Whitehouse Station, N. J.
    08889-0100
 (908) 423-1000
  Incorporated in New
    Jersey

I.R.S. Employer
    Identification
    No. 22-1109110   Securities Registered pursuant to Section 12(b) of the
    Act:
  Name of Each ExchangeTitle of Each Class

on which RegisteredCommon Stock
    ($0.01 par value)

New York and Philadelphia Stock
    Exchanges       Yes þ     No o
  Yes o     No þ
  Yes þ     No o
  Regulation S-K Form 10-K Form 10-K. o
   þ o o
  Rule 12b-2 Yes o     No þ
  Documents
    Incorporated by Reference:
  Document

Part of
    Form 10-KProxy Statement for the Annual
    Meeting of

Part IIIStockholders to be held
    April 24, 2007, to be filed with the Securities and
    Exchange Commission within 120 days after the close of the
    fiscal year covered by this report




---



##### 



Table of
    Contents
  PagePart IItem 1.


Business

2Item 1A.


Risk
    Factors

16Cautionary Factors
    that May Affect Future Results

21Item 1B.


Unresolved Staff
    Comments

22Item 2.


Properties

22Item 3.


Legal
    Proceedings

22Item 4.


Submission of
    Matters to a Vote of Security Holders

35Executive Officers
    of the Registrant

36Part IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities

40Item 6.


Selected Financial
    Data

44Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations

45Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk

73Item 8.


Financial
    Statements and Supplementary Data

74(a)


Financial
    Statements

74Notes to
    Consolidated Financial Statements

77Report of
    Independent Registered Public Accounting Firm

122(b)


Supplementary
    Data

124Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure

125Item 9A.


Controls and
    Procedures

125Managements
    Report

125Item 9B.


Other
    Information

126Part IIIItem 10.


Directors,
    Executive Officers and Corporate Governance

126Item 11.


Executive
    Compensation

126Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters

127Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence

127Item 14.


Principal
    Accountant Fees and Services

127Part IVItem 15.


Exhibits and
    Financial Statement Schedules

127Signatures

131Consent of
    Independent Registered Public Accounting Firm

132




---



##### 



PART I  Item 1.
    Business.      Overview
  Gardasil Januvia Zostavax RotaTeq Zolinza
  Janumet Emend Arcoxia first-in-class HIV
   2




---



##### 



Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx
 3




---



##### 



Product
    Sales
  1
  ($ in millions)

2006


2005


2004Singulair

$
3,579.0


$
2,975.6


$
2,622.0Cozaar/Hyzaar


3,163.1



3,037.2



2,823.7Fosamax


3,134.4



3,191.2



3,159.7Zocor


2,802.7



4,381.7



5,196.5Primaxin


704.8



739.6



640.6Cosopt/Trusopt


697.1



617.2



558.8Proscar


618.5



741.4



733.1Vasotec/Vaseretic


547.2



623.1



719.2Cancidas


529.8



570.0



430.0Maxalt


406.4



348.4



309.9Propecia


351.8



291.9



270.2Vioxx


-



-



1,489.3Vaccines/Biologicals2


1,859.4



1,103.3



1,070.3Other


4,241.8



3,391.3



2,949.5Total

$
22,636.0


$
22,011.9


$
22,972.8   1
    
    Presented net of discounts and
    returns.2
    
    These amounts do not reflect sales
    of vaccines sold in most major European markets through the
    Companys joint venture, Sanofi Pasteur MSD, the results of
    which are reflected in equity income from affiliates.  Singulair Cozaar Hyzaar Vasotec , and/or Fosamax Fosamax Plus D Fosamax Zocor Primaxin Cancidas , s Cosopt Trusopt , Proscar Maxalt , Propecia
  Varivax M-M-R ProQuad Gardasil, Pneumovax RotaTeq Zostavax
  Nexium Prilosec
  U.S. Product Approvals RotaTeq RotaTeq
 4




---



##### 



RotaTeq RotaTeq
  Zostavax Zostavax
  Gardasil
  Zolinza
  Januvia Januvia
  catch-up Varivax ProQuad
  Voluntary Withdrawal of Vioxx Vioxx Vioxx
  Vioxx Vioxx. Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx
  Vioxx. Vioxx
 5




---



##### 



16-18, benefit-to-risk Vioxx Vioxx Vioxx.
  Vioxx, Vioxx Vioxx Vioxx www.merck.com/newsroom/vioxx/martin_report.html
  Acquisitions
      Joint Ventures
  Pharmaceutical
 Zetia ( Ezetrol Vytorin Inegy Zetia Zocor,
  Prilosec
   6




---



##### 



Nexium Prilosec. Nexium Prilosec.
  true-up Nexium Prilosec
  Pepcid
    AC over-the-counter Pepcid Pepcid Complete, over-the-counter
  Vaccines
     Other
   Competition
 7




---



##### 



Zocor, Zocor
  Distribution
    Raw Materials
  Government Regulation and Investigation
   8




---



##### 



9




---



##### 



Patents, Trademarks and Licenses per se
  Cancidas, Comvax Haemophilus , Cosopt, Cozaar,
    Crixivan Emend, Fosamax, Gardasil, Hyzaar Invanz Maxalt, Primaxin, Propecia,
    Recombivax HB ,
    RotaTeq, Singulair, Januvia Trusopt, Zolinza Zostavax. Zetia Vytorin Sustiva/Stocrin (efavirenz). Sustiva Stocrin Aggrastat Aggrastat
  Invanz Trusopt Cozaar/Hyzaar Singulair
      Zocor Zocor
  Proscar Proscar Proscar Propecia; Propecia
  Fosamax Fosamax Fosamax Fosamax
 10




---



##### 



Fosamax Plus D
      Research
    and Development
    best-in-class
       11




---



##### 



Emend,
  Janumet Januvia
  Arcoxia Arcoxia Arcoxia
      th MK-0518
  th 24-week MK-0518 24-week
 12




---



##### 



13




---



##### 



Back-up
   Phase I
  Alzheimers
    Disease
 MK-0952
 Atherosclerosis
 MK-6213
 Cancer
 MK-0429
 MK-0646*
 MK-0731
 MK-0752
 MK-4721*
 V930
 Cardiovascular
 MK-0448
 MK-8141*
 Diabetes
 MK-0941
 MK-0893
 MK-1642
 MK-3887
 Phase I
  Endocrine
 MK-0867*
 MK-0974
 Glaucoma
 MK-0994
 Infectious Disease
 MK-0608
 MK-7009
 MK-8122*
 V710 (S. aureus)
 V512 (Flu)
 Insomnia
 MK-0454
 MK-8998
 Osteoporosis
 MK-0773
 Parkinsons
    Disease
 MK-0657
 Psychiatric Disease
 MK-2637
 MK-0249
 MK-5757
 Phase II
  Alzheimers
    Disease
 MK-0249
 Arthritis
 MK-0822
 Atherosclerosis
 MK-0859
 MK-0633
 Cancer
 MK-0457*
 MK-0822
 Diabetes
 MK-0533
 Endocrine
 MK-0677
 HIV
 V526
 HPV
 V502**
 Infectious Disease
 (Pediatric)
 V419*
 Migraine
 MK-0974
 Osteoporosis
 MK-0822
 Overactive Bladder
 MK-0634
 MK-0594
 Pain
 MK-0759
 MK-6721*
 MK-2295*/***
 Respiratory Disease
 MK-0633
 Stroke
 MK-0724*
 Phase III
  Atherosclerosis
 MK-0524B
 MK-0524A
 (ER niacin/
 laropiprant)
 HIV
 MK-0518
 (raltegravir)
 Insomnia
 Gaboxadol*
 Obesity
 MK-0364
 (taranabant)
 Under FDA Review
  CINV
 Emend For Injection
 (MK-0517)
 Diabetes
 Janumet
 Osteoarthritis
 Arcoxia
   2006
    U.S. Approvals
  Rotavirus
 Gastroenteritis
 RotaTeq
 Shingles
 Zostavax
 Cervical Cancer and
 Genital Warts
 Gardasil **
 Diabetes
 Januvia
 Cancer (CTCL)
 Zolinza*
   *
    
    Licensed, alliance, or acquisition
    (pipeline)**
    
    Multiple licenses, including CSL,
    Ltd.***
    
    Proof-of-Concept
    Molecule 14




---



##### 



Zetia Vytorin Cozaar Hyzaar Prilosec Nexium Vasotec Vaseretic Aggrastat
  Employees
            Environmental
    Matters
   15




---



##### 



Geographic
    Area Information
          Available
    Information
  www.merck.com. Form 10-K, Form 10-Q, Form 8-K,
  www.merck.com/about/corporategovernance
  Item 1A.
    Risk
    Factors.  Form 10-K, Form 10-K
  The Company faces significant litigation related to
    Vioxx.
  Vioxx Vioxx, Vioxx. Vioxx Vioxx Vioxx Vioxx
 16




---



##### 



Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx. Vioxx and/or
  Vioxx. Vioxx Vioxx. Vioxx and/or
  Vioxx Vioxx
  Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx
 17




---



##### 



Vioxx Vioxx
  Vioxx Vioxx
  Certain of the Companys major products are going to
    lose patent protection in the near future and, when that occurs,
    the Company expects a significant decline in sales of those
    products.
    Zocor, Zocor Zocor Zocor Zocor
  Fosamax Fosamax Fosamax
  Fosamax Fosamax Fosamax Plus D Fosamax Fosamax Plus D
  The Companys research and development efforts may not
    succeed in developing commercially successful products and the
    Company may not be able to acquire commercially successful
    products in other ways; in consequence, the Company may not be
    able to replace sales of successful products that have lost
    patent protection.
  Zocor Fosamax
 18




---



##### 



Zocor Fosamax
  The Companys products, including products in
    development, can not be marketed unless the Company obtains and
    maintains regulatory approval.
      The Company is dependent on its patent rights, and if its
    patent rights are invalidated or circumvented, its business
    would be adversely affected.
     19




---



##### 



The Company faces intense competition from lower-cost generic
    products.
      The Company faces intense competition from new products.
    The Company faces pricing pressure with respect to its
    products.
      Changes in laws and regulations could adversely affect the
    Companys business.
   20




---



##### 



Cautionary
    Factors that May Affect Future Results

(Cautionary Statements Under the Private Securities
    Litigation Reform Act of 1995)



This report and other written reports and oral statements made
    from time to time by the Company may contain so-called
    forward-looking statements, all of which are based
    on managements current expectations and are subject to
    risks and uncertainties which may cause results to differ
    materially from those set forth in the statements. One can
    identify these forward-looking statements by their use of words
    such as expects, plans,
    will, estimates, forecasts,
    projects and other words of similar meaning. One can
    also identify them by the fact that they do not relate strictly
    to historical or current facts. These statements are likely to
    address the Companys growth strategy, financial results,
    product development, product approvals, product potential, and
    development programs. One must carefully consider any such
    statement and should understand that many factors could cause
    actual results to differ materially from the Companys
    forward-looking statements. These factors include inaccurate
    assumptions and a broad variety of other risks and
    uncertainties, including some that are known and some that are
    not. No forward-looking statement can be guaranteed and actual
    future results may vary materially. The Company does not assume
    the obligation to update any forward-looking statement. The
    Company cautions you not to place undue reliance on these
    forward-looking statements. Although it is not possible to
    predict or identify all such factors, they may include the
    following: 
    Significant litigation related to Vioxx.
    Competition from generic products as the Companys products
    lose patent protection.
    Increased brand competition in therapeutic areas
    important to the Companys long-term business performance.
    The difficulties and uncertainties inherent in new product
    development. The outcome of the lengthy and complex process of
    new product development is inherently uncertain. A candidate can
    fail at any stage of the process and one or more late-stage
    product candidates could fail to receive regulatory approval.
    New product candidates may appear promising in development but
    fail to reach the market because of efficacy or safety concerns,
    the inability to obtain necessary regulatory approvals, the
    difficulty or excessive cost to manufacture
    and/or the
    infringement of patents or intellectual property rights of
    others. Furthermore, the sales of new products may prove to be
    disappointing and fail to reach anticipated levels.
    Pricing pressures, both in the United States and abroad,
    including rules and practices of managed care groups, judicial
    decisions and governmental laws and regulations related to
    Medicare, Medicaid and health care reform, pharmaceutical
    reimbursement and pricing in general.
    Changes in government laws and regulations and the enforcement
    thereof affecting the Companys business.
    Efficacy or safety concerns with respect to marketed products,
    whether or not scientifically justified, leading to product
    recalls, withdrawals or declining sales.
    Legal factors, including product liability claims, antitrust
    litigation and governmental investigations, including tax
    disputes, environmental concerns and patent disputes with
    branded and generic competitors, any of which could preclude
    commercialization of products or negatively affect the
    profitability of existing products.
    Lost market opportunity resulting from delays and uncertainties
    in the approval process of the FDA and foreign regulatory
    authorities.
    Increased focus on privacy issues in countries around the world,
    including the United States and the EU. The legislative and
    regulatory landscape for privacy and data protection continues
    to evolve, and there has been an increasing amount of focus on
    privacy and data protection issues with the potential to affect
    directly the Companys business.
    Changes in tax laws including changes related to the taxation of
    foreign earnings.
    Changes in accounting pronouncements promulgated by
    standard-setting or regulatory bodies, including the Financial
    Accounting Standards Board and the SEC, that are adverse to the
    Company. 21




---



##### 




    Economic factors over which the Company has no control,
    including changes in inflation, interest rates and foreign
    currency exchange rates.    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.        Item 3.
    Legal
    Proceedings.    VioxxLitigation
  Product
    Liability Lawsuits
 and/or Vioxx Vioxx and/or Vioxx
  Vioxx
 22




---



##### 



Vioxx
  Vioxx www.merck.com
  Vioxx
  Vioxx Vioxx
  Vioxx
  Vioxx
    Vioxx
     23




---



##### 



Vioxx
 24




---



##### 



Vioxx
   State orFederalVerdict Date


Plaintiff


Court


Result


CommentsAug. 19, 2005


Ernst


Texas


Verdict for Plaintiff


Jury awarded plaintiff $253.4
    million; the Court reduced amount to approximately
    $26.1 million plus interest.  The judgment is now on appeal.Nov. 3, 2005


Humeston


N.J.


Verdict for Merck; then judge
    overturned the verdict


Judge has ordered a new trial,
    which is currently ongoing.Feb. 17, 2006


Plunkett


Federal


Mistrial after jury deadlocked in
    first trial; verdict for Merck in retrial


Merck prevailed in February 2006
    retrial. Plaintiff has moved for a new trial.April 5, 2006


McDarby


N.J.


Verdict for Plaintiff


Plaintiff was awarded $13.5 million
    in damages. Mercks motion for a new trial is pending, as
    is plaintiffs motion for attorneys fees.April 5, 2006


Cona


N.J.


Verdict for Merck on failure to
    warn claim


However, the jury awarded plaintiff
    the nominal sum of $135 for his Consumer Fraud Act claim.
    Mercks motion for a new trial on the Consumer Fraud Act
    claim is pending, as is plaintiffs motion for
    attorneys fees.April 21, 2006


Garza


Texas


Verdict for Plaintiff


Judge reduced $32 million jury
    award to $7.75 million plus interest. Merck has moved for a
    new trial.July 13, 2006


Doherty


N.J.


Verdict for Merck


Plaintiff has moved for a new trial.Aug. 2, 2006


Grossberg


California


Verdict for Merck


Plaintiff has moved for a new trial.Aug. 17, 2006


Barnett


Federal


Verdict for Plaintiff


Plaintiff awarded $51 million in
    damages.  The judge ruled the award was grossly
    excessive, and has scheduled a new trial on damages in
    October 2007. Mercks motion for a new trial on the
    remaining issues is pending.Sept. 26, 2006


Smith


Federal


Verdict for MerckNov. 15, 2006


Mason


Federal


Verdict for MerckDec. 13, 2006


Dedrick


Federal


Verdict for Merck


Plaintiff has moved for a new trial.Dec. 15, 2006


Albright


Alabama


Verdict for Merck


Plaintiff has moved for a new trial.Jan. 18, 2007


Arrigale/Appell


California


Mistrial declared after the jury
    deadlocked  25




---



##### 



Other
    Lawsuits
  Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx
  Shareholder
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx
  Vioxx Vioxx Vioxx
 26




---



##### 



Vioxx. Vioxx.
  Vioxx Vioxx Vioxx Vioxx www.merck.com/newsroom/vioxx/martin_report.html
  Vioxx Vioxx Vioxx Vioxx Vioxx
  International
    Lawsuits
 Vioxx Vioxx
  Additional
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx and/or
  Insurance
 Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
 27




---



##### 



Vioxx
  Vioxx Vioxx
  Investigations
 Vioxx. Vioxx Vioxx Vioxx and/or
  Vioxx
  Vioxx
  Reserves
 Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
 28




---



##### 



Vioxx Vioxx Vioxx Vioxx
  Other
    Product Liability Litigation
  Fosamax Fosamax and/or Fosamax Fosamax Fosamax Fosamax
  Fosamax Fosamax Fosamax Fosamax Fosamax
  Commercial
    Litigation
     29




---



##### 



Pepcid
    Governmental
    Proceedings
   30




---



##### 



Pepcid.
      Tienam
  Vaccine
    Litigation
  and/or M-M-R
   31




---



##### 



and/or M-M-R M-M-R
  Patent
    Litigation
  Fosamax,
    Prilosec, Nexium, Propecia, Trusopt Cosopt Prilosec Nexium Prilosec. Fosamax Propecia Trusopt Cosopt Prilosec Nexium
  Zetia Zetia Zetia
  Singulair
  Fosamax Fosamax Fosamax Plus D Fosamax Fosamax Plus D
 32




---



##### 



Fosamax
        Trusopt Cosopt Trusopt Cosopt Cosopt Trusopt Cosopt
    Nexium Nexium
 33




---



##### 



Propecia
  Cozaar
  Other
    Litigation
         34




---



##### 



Environmental
    Matters
  de minimis
    Item 4.
    Submission
    of Matters to a Vote of Security Holders.      35




---



##### 



Executive
    Officers of the Registrant (ages as of February 1,
    2007)                End-to-End
                           36




---



##### 



not-for-profit
  not-for-profit
                             37




---



##### 



38




---



##### 



39




---



##### 



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.      Cash
    Dividends Paid per Common Share
  Year


4th Q


3rd Q


2nd Q


1st Q2006

$
1.52


$
0.38


$
0.38


$
0.38


$
0.382005

$
1.52


$
0.38


$
0.38


$
0.38


$
0.38   Common
    Stock Market Prices
  2006

4th Q


3rd Q


2nd Q


1st QHigh

$
46.37


$
42.51


$
36.84


$
36.65Low

$
41.24


$
35.00


$
32.75


$
31.812005High

$
32.54


$
32.34


$
35.20


$
32.61Low

$
25.50


$
26.97


$
30.40


$
27.48     Equity
    Compensation Plan Information
    Number ofsecuritiesremaining availableNumber of





for future issuancesecurities to be





under equityissued upon


Weighted-average


compensation plansexercise of


exercise price of


(excludingoutstanding


outstanding


securitiesoptions, warrants


options, warrants


reflected in columnPlan Category

and rights


and rights


(a))(a)


(b)


(c)Equity compensation plans approved
    by security holders (1)


253,655,299
(2)


$53.36



166,532,568Equity compensation plans not
    approved by security holders (3)










Total


253,655,299



$53.36



166,532,568     (1)
    
    Includes options to purchase shares of Company Common Stock and
    other rights under the following stockholder-approved plans: the
    1996 Incentive Stock Plan, the 2001 Incentive Stock Plan, the
    2004 Incentive 40




---



##### 



Stock Plan, the 2007 Incentive Stock Plan, the 1996 Non-Employee
    Directors Stock Option Plan, the 2001 Non-Employee Directors
    Stock Option Plan and the 2006 Non-Employee Directors Stock
    Option Plan.(2)
    
    Excludes approximately 6,000,567 shares of restricted stock
    units and 2,753,676 performance share units (assuming maximum
    payouts) under the 2004 Incentive Stock Plan. Also excludes
    370,042 shares of phantom stock deferred under the
    Merck & Co., Inc. Deferral Program. As of
    December 31, 2005, no additional shares were reserved under
    the Deferral Program. Beginning January 1, 2006, one-tenth
    of 1 percent of the outstanding shares of Merck Common
    Stock on the last business day of the preceding calendar year
    plus any shares authorized under the Deferral Program but not
    issued are reserved for future issuance (2,149,813 as of
    December 31, 2006). The actual amount of shares to be
    issued prospectively equals the amount participants elect to
    defer from payouts under the Companys various incentive
    programs, such as the Executive Incentive Plan, into phantom
    stock, increased by the amount of dividends that would be paid
    on an equivalent number of shares of Merck Common Stock, divided
    by the market price of Merck Common Stock.(3)
    
    The table does not include information for equity compensation
    plans and options and other warrants and rights assumed by the
    Company in connection with mergers and acquisitions and pursuant
    to which there remain outstanding options or other warrants or
    rights (collectively, Assumed Plans), which include
    the following: Medco Containment Services, Inc. 1991
    Class C Non-Qualified Stock Option Plan; SIBIA
    Neurosciences, Inc. 1996 Equity Incentive Plan; Provantage
    Health Services, Inc. 1999 Stock Incentive Plan; Rosetta
    Inpharmatics, Inc. 1997 and 2000 Employee Stock Plans. A total
    of 1,681,419 shares of Merck Common Stock may be purchased
    under the Assumed Plans, at a weighted average exercise price of
    $17.17. No further grants may be made under any Assumed Plans. 41




---



##### 



Performance
    Graph
    Comparison
    of Five-Year Cumulative Total Return*
   End of


2006/2001Period Value


CAGR**Merck

$
94



−1
%DJUSPR


90



−2S&P 500


135



6   
  2001


2002


2003


2004


2005


2006MERCK



100.00




98.92




87.70




63.46




66.03




94.21DJUSPR



100.00




79.62




87.15




79.93




78.61




89.92S&P 500



100.00




77.91




100.24




111.14




116.59




134.99   *
    
    Assumes that the value of the
    investment in Company Common Stock and each index was $100 on
    December 31, 2001 and that all dividends were reinvested.**
    
    Compound Annual Growth Rate 42




---



##### 



Issuer
    Purchases of Equity Securities
  Total Number of

($ in millions)Total



Shares Purchased

Approx. Dollar ValueNumber

Average

as Part of

of Shares That May Yetof Shares

Price Paid

Publicly Announced

Be Purchased Under thePeriod

Purchased

Per Share

Plans or
    Programs(1)

Plans or
    Programs(1)October 1 
    October 31, 2006


1,996,600


$
43.69



1,996,600


$
6,691.5November 1 
    November 30, 2006


1,889,300


$
44.40



1,889,300


$
6,607.7December 1 
    December 31, 2006


1,830,100


$
43.84



1,830,100


$
6,527.4Total


5,716,000


$
43.97



5,716,000


$
6,527.4   (1)
    
    These share repurchases were made
    as part of a plan announced in July 2002 to purchase
    $10 billion in Merck shares. 43




---



##### 



Item 6.
    Selected
    Financial
    Data.(1)    Merck &
    Co., Inc. and Subsidiaries($ in millions except per share amounts)
  2006(2)


2005(3)


2004(4)


2003(5)


2002Results for Year:Sales

$
22,636.0


$
22,011.9


$
22,972.8


$
22,567.8


$
21,445.8Materials and production costs


6,001.1



5,149.6



4,965.7



4,443.7



4,004.9Marketing and administrative
    expenses


8,165.4



7,155.5



7,238.7



6,200.3



5,652.2Research and development expenses


4,782.9



3,848.0



4,010.2



3,279.9



2,677.2Restructuring costs


142.3



322.2



107.6



194.6



-Equity income from affiliates


(2,294.4
)


(1,717.1
)


(1,008.2
)


(474.2
)


(644.7
)Other (income) expense, net


(382.7
)


(110.2
)


(344.0
)


(203.2
)


104.5Income from continuing operations
    before taxes


6,221.4



7,363.9



8,002.8



9,126.7



9,651.7Taxes on income


1,787.6



2,732.6



2,172.7



2,492.7



2,856.9Income from continuing operations


4,433.8



4,631.3



5,830.1



6,634.0



6,794.8Income from discontinued
    operations, net of taxes


-



-



-



241.3



354.7Net income


4,433.8



4,631.3



5,830.1



6,875.3



7,149.5Basic earnings per common shareContinuing operations

$
2.04


$
2.11


$
2.63


$
2.97


$
3.01Discontinued operations


-



-



-



0.11



0.16Net income

$
2.04


$
2.11


$
2.63


$
3.07(6
)

$
3.17Earnings per common share assuming
    dilutionContinuing operations

$
2.03


$
2.10


$
2.62


$
2.94


$
2.98Discontinued operations


-



-



-



0.11



0.16Net income

$
2.03


$
2.10


$
2.62


$
3.05


$
3.14Cash dividends declared


3,318.7



3,338.7



3,329.1



3,264.7



3,204.2Cash dividends paid per common share

$
1.52


$
1.52


$
1.49


$
1.45


$
1.41Capital expenditures


980.2



1,402.7



1,726.1



1,915.9



2,128.1Depreciation


2,098.1



1,544.2



1,258.7



1,129.6



1,067.5Year-End Position:Working capital

$
2,507.5


$
7,806.9


$
1,688.8


$
1,926.9


$
2,011.2Property, plant and equipment, net


13,194.1



14,398.2



14,713.7



14,169.0



14,195.6Total assets


44,569.8



44,845.8



42,572.8



40,587.5(7
)


47,561.2Long-term debt


5,551.0



5,125.6



4,691.5



5,096.0



4,879.0Stockholders equity


17,559.7



17,977.7



17,349.3



15,620.8(7
)


18,200.5Financial Ratios:Income from continuing
    operations
    as a % of sales


19.6%



21.0%



25.4%



29.4%



31.7%Net incomeas a % of average total assets


9.9%



10.6%



14.0%



15.0%



15.5%Year-End Statistics:Average common shares outstanding
    (millions)


2,177.6



2,197.0



2,219.0



2,236.7



2,257.5Average common shares outstanding
    assuming dilution (millions)


2,187.7



2,200.4



2,226.4



2,253.1



2,277.0Number of stockholders of record


184,200



198,200



216,100



233,000



246,300Number of employees


60,000



61,500



62,600



63,200
(7)


77,300   (1)
    Prior year amounts reflect the
    impact of retrospectively adopting Securities and Exchange
    Commission Interpretation, Commission Guidance Regarding
    Accounting for Sales of Vaccines and BioTerror Countermeasures
    to the Federal Government for Placement into the Pediatric
    Vaccine Stockpile or the Strategic National Stockpile, (see
    Note 2 to the consolidated financial statements).(2)
    Amounts for 2006 include the
    impact of restructuring actions, acquired research expenses
    resulting from acquisitions made during the year, additionalVioxx legal defense
    costs and the incremental impact of expensing stock options.(3)
    Amounts for 2005 include the
    impact of the net tax charge primarily associated with the
    American Jobs Creation Act repatriation, restructuring actions
    and additionalVioxx
    legal defense costs.(4)
    Amounts for 2004 include the
    impact of the withdrawal ofVioxx, Vioxx legal
    defense costs and restructuring actions.(5)
    Amounts for 2003 include the
    impact of the implementation of a new distribution program for
    U.S. wholesalers and restructuring actions.(6)
    Amount does not add as a result
    of rounding.(7)
    Decrease in 2003 primarily
    reflects the impact of the spin-off of Medco Health. 44




---



##### 



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Description
    of Mercks Business
    Overview
    Gardasil Januvia Zostavax RotaTeq Zolinza
  Janumet Emend Arcoxia first-in-class HIV
     45




---



##### 



Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx
  Competition
    and the Health Care Environment
     46




---



##### 



Stocrin Crixivan Stocrin.
     47




---



##### 



Acquisitions
      Operating
    Results
  Sales
 Singulair once-a-day Gardasil ProQuad, RotaTeq Nexium, Cozaar/Hyzaar Zocor, Proscar
 48




---



##### 



Zocor Proscar
  Zocor Fosamax
  Vioxx
  (1)
  ($ in millions)

2006


2005


2004Singulair

$
3,579.0


$
2,975.6


$
2,622.0Cozaar/Hyzaar


3,163.1



3,037.2



2,823.7Fosamax


3,134.4



3,191.2



3,159.7Zocor


2,802.7



4,381.7



5,196.5Primaxin


704.8



739.6



640.6Cosopt/Trusopt


697.1



617.2



558.8Proscar


618.5



741.4



733.1Vasotec/Vaseretic


547.2



623.1



719.2Cancidas


529.8



570.0



430.0Maxalt


406.4



348.4



309.9Propecia


351.8



291.9



270.2Vioxx


-



-



1,489.3Vaccines/Biologicals
    (2)


1,859.4



1,103.3



1,070.3Other


4,241.8



3,391.3



2,949.5$
22,636.0


$
22,011.9


$
22,972.8   (1)
    Presented net of discounts and returns.(2)
    These amounts do not reflect sales of vaccines sold in most
    major European markets through the Companys joint venture,
    Sanofi Pasteur MSD, the results of which are reflected in equity
    income from affiliates.  Singulair Cozaar/Hyzaar Vasotec and/or Fosamax Fosamax Plus D Fosavance Fosamax Zocor, Primaxin Cancidas Cosopt Trusopt, Proscar Maxalt, Propecia
  Varivax M-M-R ProQuad, Gardasil, Pneumovax RotaTeq, Zostavax,
 49




---



##### 



Nexium Prilosec.
  Segment
    Revenues
  ($ in millions)

2006


2005


2004Pharmaceutical segment revenues

$
20,374.8


$
20,678.8


$
21,591.0Vaccines segment
    revenues(1)


1,705.5



984.2



972.8Other segment
    revenues(2)


162.1



161.8



185.1Other
    revenues(3)


393.6



187.1



223.9Total revenues

$
22,636.0


$
22,011.9


$
22,972.8   (1)
    In accordance with segment
    reporting requirements, Vaccines segment revenues exclude
    $153.9 million, $119.1 million and $97.5 million
    in 2006, 2005 and 2004, respectively, of vaccines sales by
    certain
    non-U.S. subsidiaries
    managed by and included in the Pharmaceutical segment.(2)
    Includes other non-reportable
    human and animal health segments.(3)
    Other revenues are primarily
    comprised of miscellaneous corporate revenues, sales related to
    divested products or businesses and other supply sales not
    included in segment results.  Pharmaceutical
    Segment Revenues
 Zocor Proscar Singulair Cozaar/Hyzaar.
  Singulair once-a-day Singulair Singulair
  Cozaar Hyzaar Cozaar Cozaar Hyzaar Cozaar/Hyzaar
  Preminent Hyzaar
  Fosamax Fosamax Plus D and/or Fosamax Fosamax Plus D Fosamax Fosamax Plus D Fosamax Fosamax Plus D
  Fosamax Fosamac
 50




---



##### 



Zocor Zocor Zocor
  Zocor Zocor Vytorin
  Januvia Januvia
  Januvia Januvia Januvia Januvia Januvia
  Januvia Januvia Januvia Januvia
  Zolinza Zolinza
  Cosopt Propecia Maxalt Arcoxia Invanz Emend Nexium.
  Proscar Proscar Proscar Proscar Propecia Propecia
  Vaccines
    Segment Revenues
 non-U.S. subsidiaries,
 51




---



##### 



Gardasil RotaTeq Zostavax.
  Gardasil Gardasil 26-year-old Gardasil
  Gardasil. Gardasil 12-year-old 10-year-old Gardasil
  Gardasil Gardasil
  Gardasil Gardasil Gardasil Gardasil Silgard.
  Gardasil Gardasil
  Gardasil Gardasil. Gardasil Gardasil
  Gardasil
  RotaTeq RotaTeq RotaTeq
 52




---



##### 



RotaTeq
  RotaTeq RotaTeq
  RotaTeq RotaTeq RotaTeq three-year RotaTeq
  RotaTeq RotaTeq RotaTeq RotaTeq
  Zostavax Zostavax
  Zostavax Zostavax. Zostavax
  Varivax ProQuad catch-up
  (VZV)-containing Varivax, ProQuad Zostavax
  VZV-containing
  ProQuad Varivax M-M-R ProQuad Zostavax
  VZV-containing
 53




---



##### 



Costs,
    Expenses and Other
  Share-Based
    Compensation
 Share-Based Payment
  ($ in millions)

2006


Change


2005


Change


2004Materials and production

$
6,001.1



17
%

$
5,149.6



4
%

$
4,965.7Marketing and administrative


8,165.4



14
%


7,155.5



−1
%


7,238.7Research and development


4,782.9



24
%


3,848.0



−4
%


4,010.2Restructuring costs


142.3



−56
%


322.2




*


107.6Equity income from affiliates


(2,294.4
)


34
%


(1,717.1
)


70
%


(1,008.2
)Other (income) expense, net


(382.7
)


*



(110.2
)


−68
%


(344.0
)$
16,414.6



12
%

$
14,648.0



−2
%

$
14,970.0  *
    
    100% or greater.  Materials
    and Production
   Vioxx
  Zocor Vioxx
 54




---



##### 



Marketing
    and Administrative
 Vioxx Januvia Fosamax
  Vioxx Vioxx Vioxx
  Research
    and Development
     Emend,
  Janumet Januvia
  Arcoxia Arcoxia Arcoxia
      th th
 55




---



##### 



th 24-week 24-week
        MK-0524B
        Stocrin Sustiva
 56




---



##### 



57




---



##### 



58




---



##### 



Restructuring
    Costs
   Equity
    Income from Affiliates
 Vytorin Zetia
  Other
    (Income) Expense, Net
   Segment
    Profits
  ($ in millions)

2006


2005


2004Pharmaceutical segment profits

$
13,649.4


$
13,157.9


$
13,560.3Vaccines segment profits


892.8



767.0



881.4Other segment profits


380.7



355.5



278.2Other


(8,701.5
)


(6,916.5
)


(6,717.1
)Income before income taxes

$
6,221.4


$
7,363.9


$
8,002.8    59




---



##### 



Zocor Proscar. Vioxx.
    Taxes on
    Income
   Net
    Income and Earnings per Share
  ($ in millions except per share
    amounts)

2006


Change


2005


Change


2004Net income

$
4,433.8



−4
%

$
4,631.3



−21
%

$
5,830.1As a % of sales


19.6
%






21.0
%






25.4
%As a % of average total assets


9.9
%






10.6
%






14.0
%Earnings per common share assuming
    dilution

$
2.03



−3
%

$
2.10



−20
%

$
2.62   Net
    Income and Earnings per Common Share
   Selected
    Joint Venture and Affiliate Information
    Merck/Schering-Plough
    Partnership
 Zetia Ezetrol Zetia Zocor Vytorin Inegy
 60




---



##### 



Zetia Vytorin Zetia direct-to-consumer out-of-pocket
    ($ in millions)

2006


2005


2004Zetia

$
1,928.8


$
1,396.7


$
1,053.0Vytorin


1,955.3



1,028.3



132.4$
3,884.1


$
2,425.0


$
1,185.4   Zetia Vytorin Vytorin
  Vytorin Vytorin Vytorin Mayo Clinic
    Proceedings.
    AstraZeneca
    LP
 Prilosec
    Nexium Prilosec.
 61




---



##### 



Merial
    Limited
     ($ in millions)

2006


2005


2004Fipronil products

$
886.9


$
757.7


$
679.1Avermectin products


468.7



467.5



452.4Biological products


600.7



533.2



476.5Other products


238.4



228.6



227.8$
2,194.7


$
1,987.0


$
1,835.8     Sanofi
    Pasteur MSD
   Gardasil RotaTeq Zostavax
  Hexavac. Hexavac Hexavac Hexavac Hexavac Hexavac Hexavac
  HBvaxPRO Procomvax.
 62




---



##### 



($ in millions)

2006


2005


2004Hepatitis vaccines

$
70.9


$
81.1


$
80.5Viral vaccines


100.1



78.5



54.0Other vaccines


742.9



705.5



672.5$
913.9


$
865.1


$
807.0   Johnson &
    JohnsonoMerck Consumer Pharmaceuticals Company
 over-the-counter
    ($ in millions)

2006


2005


2004(1)Gastrointestinal products

$
250.9


$
250.8


$
269.2Other products


1.7



2.5



46.1$
252.6


$
253.3


$
315.3   (1)
    
    Includes sales of the European
    joint venture up through March 2004.  Capital
    Expenditures
      Analysis
    of Liquidity and Capital Resources
   63




---



##### 



Selected
    Data
  ($ in millions)

2006


2005


2004Working capital

$
2,507.5


$
7,806.9


$
1,688.8Total debt to total liabilities
    and equity


15.3
%


18.1
%


16.1
%Cash provided by operations to
    total debt


1.0:1



0.9:1



1.3:1     1993-2001
   64




---



##### 



Payments
    Due by Period
  ($ in millions)

Total


2007


2008 - 2009


2010 -2011


ThereafterPurchase obligations

$
1,108.5


$
366.4


$
614.0


$
111.1


$
17.0Loans payable and current portion
    of long-term debt


1,285.1



1,285.1



-



-



-Long-term debt


5,551.0



-



1,696.1



529.4



3,325.5Operating leases


211.5



65.8



78.5



33.3



33.9$
8,156.1


$
1,717.3


$
2,388.6


$
673.8


$
3,376.4             Financial
    Instruments Market Risk Disclosures
  Foreign
    Currency Risk Management
  65




---



##### 



available-for-sale
 66




---



##### 



Interest
    Rate Risk Management
     Critical
    Accounting Policies and Other Matters
    Revenue
    Recognition
 point-of-sale
  mark-up
 67




---



##### 



first-in,
      ($ in millions)

2006


2005Balance, January 1

$
1,166.5


$
1,030.3Current provision


3,519.4



4,419.1Adjustments to prior years


(29.5
)


134.7Payments


(3,899.3
)


(4,417.6
)Balance, December 31

$
757.1


$
1,166.5     over-the-counter
     68




---



##### 



Inventories
    Produced in Preparation for Product Launches
 build-up
  Contingencies
    and Environmental Liabilities
   Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx
 69




---



##### 



Vioxx Vioxx Vioxx
  Fosamax Fosamax Fosamax Fosamax Fosamax Fosamax
    and/or
    Share-Based
    Compensation
  70




---



##### 



Pensions
    and Other Postretirement Benefit Plans
           Employers Accounting for
    Defined Benefit Pension and Other Postretirement Plans, an
    amendment of FASB Statements No. 87, 106 and 132R
 71




---



##### 



Acquisitions
 Business Combinations
    Taxes on
    Income
      72




---



##### 



Recently
    Issued Accounting Standards
  Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109
  Fair Value Measurements
  Cautionary
    Factors That May Affect Future Results
    Forms 10-K, 10-Q 8-K. Form 10-K
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.   73




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data.  (a)
    Financial
    Statements    Consolidated
    Statement of Income
  Years Ended December 31
 ($ in millions except per share amounts)
  2006


2005


2004Sales

$
22,636.0


$
22,011.9


$
22,972.8Costs, Expenses and OtherMaterials and production


6,001.1



5,149.6



4,965.7Marketing and administrative


8,165.4



7,155.5



7,238.7Research and development


4,782.9



3,848.0



4,010.2Restructuring costs


142.3



322.2



107.6Equity income from affiliates


(2,294.4
)


(1,717.1
)


(1,008.2
)Other (income) expense, net


(382.7
)


(110.2
)


(344.0
)16,414.6



14,648.0



14,970.0Income Before Taxes


6,221.4



7,363.9



8,002.8Taxes on Income


1,787.6



2,732.6



2,172.7Net Income

$
4,433.8


$
4,631.3


$
5,830.1Basic Earnings per Common Share

$
2.04


$
2.11


$
2.63Earnings per Common Share Assuming
    Dilution

$
2.03


$
2.10


$
2.62   Consolidated
    Statement of Retained Earnings
  Years Ended December 31
    ($ in millions)
  2006


2005


2004Balance, January 1

$
37,980.0


$
36,687.4


$
34,186.4Net Income


4,433.8



4,631.3



5,830.1Common Stock Dividends Declared


(3,318.7
)


(3,338.7
)


(3,329.1
)Balance, December 31

$
39,095.1


$
37,980.0


$
36,687.4   Consolidated
    Statement of Comprehensive Income
  Years Ended December 31
 ($ in millions)
  2006


2005


2004Net Income

$
4,433.8


$
4,631.3


$
5,830.1Other Comprehensive Income (Loss)Net unrealized (loss) gain on
    derivatives, net of tax and net income realization


(50.9
)


81.3



(31.7
)Net unrealized gain (loss) on
    investments, net of tax and net income realization


26.1



50.3



(100.9
)Minimum pension liability, net of
    tax


22.5



(7.0
)


(4.9
)Cumulative translation adjustment
    relating to equity investees, net of tax


18.9



(26.4
)


26.116.6



98.2



(111.4
)Comprehensive Income

$
4,450.4


$
4,729.5


$
5,718.7   The accompanying notes are an integral part of these
    consolidated financial statements.
 74




---



##### 



Consolidated
    Balance Sheet
  December 31
 ($ in millions)
  2006


2005AssetsCurrent AssetsCash and cash equivalents

$
5,914.7


$
9,585.3Short-term investments


2,798.3



6,052.3Accounts receivable


3,314.8



2,927.3Inventories (excludes inventories
    of $416.1 in 2006 and $753.8 in 2005 classified in Other
    assets  see Note 7)


1,769.4



1,658.1Prepaid expenses and taxes


1,433.0



826.3Total current assets


15,230.2



21,049.3Investments


7,788.2



1,107.9Property, Plant and Equipment (at
    cost)Land


408.9



433.0Buildings


9,745.9



9,479.6Machinery, equipment and office
    furnishings


13,172.4



12,785.2Construction in progress


882.3



1,015.524,209.5



23,713.3Less allowance for depreciation


11,015.4



9,315.113,194.1



14,398.2Goodwill


1,431.6



1,085.7Other Intangibles, Net


943.9



518.7Other Assets


5,981.8



6,686.0$
44,569.8


$
44,845.8Liabilities and
    Stockholders EquityCurrent LiabilitiesLoans payable and current portion
    of long-term debt

$
1,285.1


$
2,972.0Trade accounts payable


496.6



471.1Accrued and other current
    liabilities


6,653.3



5,277.8Income taxes payable


3,460.8



3,691.5Dividends payable


826.9



830.0Total current liabilities


12,722.7



13,242.4Long-Term Debt


5,551.0



5,125.6Deferred Income Taxes and
    Noncurrent Liabilities


6,330.3



6,092.9Minority Interests


2,406.1



2,407.2Stockholders EquityCommon stock, one cent par valueAuthorized 
    5,400,000,000 sharesIssued 
    2,976,223,337 shares  2006 and 2005


29.8



29.8Other paid-in capital


7,166.5



6,900.0Retained earnings


39,095.1



37,980.0Accumulated other comprehensive
    income


(1,164.3
)


52.345,127.1



44,962.1Less treasury stock, at cost
    808,437,892 shares  2006
    794,299,347 shares  2005


27,567.4



26,984.4Total stockholders equity


17,559.7



17,977.7$
44,569.8


$
44,845.8   The accompanying notes are an integral part of this
    consolidated financial statement.
 75




---



##### 



Consolidated
    Statement of Cash Flows
  Years Ended December 31
 ($ in millions)
  2006


2005


2004Cash Flows from Operating
    ActivitiesNet income

$
4,433.8


$
4,631.3


$
5,830.1Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation and amortization


2,268.4



1,708.1



1,450.7Deferred income taxes


(530.2
)


9.0



48.9Equity income from affiliates


(2,294.4
)


(1,717.1
)


(1,008.2
)Dividends and distributions from
    equity affiliates


1,931.9



1,101.2



587.0Share-based compensation


312.5



48.0



25.7Acquired research


762.5







125.5Other


18.1



647.5



234.6Net changes in assets and
    liabilities:Accounts receivable


(709.3
)


345.9



173.1Inventories


226.5



125.6



331.9Trade accounts payable


16.4



63.6



(323.8
)Accrued and other current
    liabilities


461.6



238.2



1,382.3Income taxes payable


(138.2
)


663.2



465.5Noncurrent liabilities


(125.6
)


(412.2
)


(473.7
)Other


131.2



156.2



(50.5
)Net Cash Provided by Operating
    Activities


6,765.2



7,608.5



8,799.1Cash Flows from Investing
    ActivitiesCapital expenditures


(980.2
)


(1,402.7
)


(1,726.1
)Purchases of securities,
    subsidiaries and other investments


(20,044.3
)


(125,308.4
)


(82,269.2
)Proceeds from sales of securities,
    subsidiaries and other investments


16,143.8



128,981.4



82,363.8Other


(3.0
)


(3.1
)


(6.6
)Net Cash (Used) Provided by
    Investing Activities


(4,883.7
)


2,267.2



(1,638.1
)Cash Flows from Financing
    ActivitiesNet change in short-term borrowings


(1,522.8
)


1,296.2



(252.4
)Proceeds from issuance of debt


755.1



1,000.0



405.1Payments on debt


(506.2
)


(1,014.9
)


(37.3
)Redemption of preferred units of
    subsidiary










(1,500.0
)Purchases of treasury stock


(1,002.3
)


(1,015.3
)


(974.6
)Dividends paid to stockholders


(3,322.6
)


(3,349.8
)


(3,310.7
)Proceeds from exercise of stock
    options


369.9



136.5



240.3Other


(375.3
)


(93.1
)


(161.8
)Net Cash Used by Financing
    Activities


(5,604.2
)


(3,040.4
)


(5,591.4
)Effect of Exchange Rate Changes on
    Cash and Cash Equivalents


52.1



(128.8
)


108.2Net (Decrease) Increase in Cash
    and Cash Equivalents


(3,670.6
)


6,706.5



1,677.8Cash and Cash Equivalents at
    Beginning of Year


9,585.3



2,878.8



1,201.0Cash and Cash Equivalents at End
    of Year

$
5,914.7


$
9,585.3


$
2,878.8   The accompanying notes are an integral part of this
    consolidated financial statement.
 76




---



##### 



Notes to
    Consolidated Financial Statements  ($ in millions except per share amounts)
  1.
    Nature of
    Operations    2.
    Summary
    of Accounting Policies  Principles of Consolidation 
  Foreign Currency Translation 
  Cash and Cash Equivalents 
  Inventories  last-in, first-in,
  Investments  available-for-sale held-to-maturity, other-than-temporary
  Revenue Recognition  point-of-sale
 77




---



##### 



Commission Guidance
    Regarding Accounting for Sales of Vaccines and BioTerror
    Countermeasures to the Federal Government for Placement into the
    Pediatric Vaccine Stockpile or the Strategic National Stockpile.
  Depreciation 
  Acquisitions  Business
    Combinations Applicability
    of FASB Statement No. 2 to Business Combinations Accounted
    for by the Purchase Method
  Goodwill and Other Intangibles 
  Research and Development 
  Share-Based Compensation  Share-Based Payment
 78




---



##### 



Accounting for Stock-Based
    Compensation
  Legal Defense Costs 
  Use of Estimates 
  Reclassifications 
  Recently Issued Accounting Standards  Accounting for
    Uncertainty in Income Taxes  an interpretation of
    FASB Statement No. 109 Fair Value Measurements
      3.
    Voluntary
    Product Withdrawal  Vioxx Vioxx
  Vioxx Vioxx
 79




---



##### 



4.
    Restructuring  Global
    Restructuring Program
     Separation


AcceleratedYear Ended December 31,
    2006

Costs


Depreciation


Other


TotalMaterials and
    production

$
-


$
707.3


$
29.1


$
736.4Research and
    development


-



56.5



0.3



56.8Restructuring costs


113.7



-



28.6



142.3$
113.7


$
763.8


$
58.0


$
935.5Year Ended December 31,
    2005Materials and production

$
-


$
65.9


$
111.2


$
177.1Research and development


-



18.7



-



18.7Restructuring costs


182.4



-



23.0



205.4$
182.4


$
84.6


$
134.2


$
401.2        80




---



##### 



Other
    Restructuring Programs
     Separation


AcceleratedCosts(1)


Depreciation


Other


TotalRestructuring reserves as of
    January 1, 2005

$
45.7


$
-


$
-


$
45.7Expense


273.9



84.6



159.5



518.0(Payments) receipts, net


(79.3
)


-



(32.0
)


(111.3
)Non-cash activity


-



(84.6
)


(127.5
)


(212.1
)Restructuring reserves as of
    December 31, 2005

$
240.3


$
-


$
-


$
240.3Expense

$
113.7


$
763.8


$
58.0


$
935.5(Payments) receipts,
    net


(176.3
)


-



(9.4
)(2)


(185.7
)Non-cash activity


-



(763.8
)


(48.6
)


(812.4
)Restructuring reserves as of
    December 31, 2006

$
177.7


$
-


$
-


$
177.7   (1)
    Includes separation costs
    associated with the global restructuring program as well as
    amounts from other restructuring programs. The other
    restructuring programs were substantially complete as of the end
    of the first quarter of 2006.  (2)Includes
    proceeds from the sales of facilities in connection with the
    global restructuring program.
    Employers Accounting for
    Postemployment Benefits  an amendment of FASB
    Statement No. 5 and 43 Employers Accounting for Settlements and Curtailments
    of Defined Benefit Pension Plans for Termination Benefits Accounting for the
    Impairment and Disposal of Long-Lived Accounting for Costs Associated with
    Exit or Disposal Activities.
  5.
    Research
    Collaborations, Acquisitions and License Agreements     81




---



##### 



,
     82




---



##### 



in-silico
   83




---



##### 



Zolinza
  6.
    Financial
    Instruments  Foreign
    Currency Risk Management
    84




---



##### 



available-for-sale
    Interest
    Rate Risk Management
    85




---



##### 



Fair
    Value of Financial Instruments
   2006


2005Carrying Value


Fair Value


Carrying Value


Fair ValueAssetsCash and cash equivalents

$
5,914.7


$
5,914.7


$
9,585.3


$
9,585.3Short-term investments


2,798.3



2,798.3



6,052.3



6,052.3Long-term investments


7,788.2



7,788.2



1,107.9



1,107.9Purchased currency options


43.9



43.9



145.4



145.4Forward exchange contracts


11.1



11.1



13.7



13.7Interest rate swaps


26.3



26.3



13.5



13.5LiabilitiesLoans payable and current portion
    of long-term debt

$
1,285.1


$
1,284.3


$
2,972.0


$
2,974.4Long-term debt


5,551.0



5,612.7



5,125.6



5,171.4Forward exchange contracts


25.5



25.5



26.0



26.0     available-for-sale-investments
  2006Carrying


Fair


Gross UnrealizedValue


Value


Gains


LossesCorporate notes and bonds

$
5,189.5


$
5,189.5


$
7.2


$
(5.0
)U.S. Government and agency
    securities


2,028.2



2,028.2



2.3



(3.7
)Commercial paper


1,110.2



1,110.2



-



-Municipal securities


708.5



708.5



4.3



(1.3
)Mortgaged-backed securities


615.4



615.4



1.8



(0.7
)Asset-backed securities


456.5



456.5



0.8



(0.4
)Foreign government bonds


191.2



191.2



-



(0.7
)Repurchase agreements


81.5



81.5



-



-Other debt securities


47.1



47.1



8.8



-Equity securities


158.4



158.4



85.5



(0.7
)Total
    Available-for-sale

$
10,586.5


$
10,586.5


$
110.7


$
(12.5
)  86




---



##### 



2005Carrying


Fair


Gross UnrealizedValue


Value


Gains


LossesRepurchase agreements

$
5,214.2


$
5,214.2


$
-


$
-Corporate notes and bonds


755.7



755.7



0.1



-Commercial paper


654.7



654.7



-



-Municipal securities


288.3



288.3



0.5



(1.3
)U.S. Government and agency
    securities


51.9



51.9



-



(0.1
)Other debt securities


45.0



45.0



10.1



(0.3
)Equity securities


150.4



150.4



60.0



(4.9
)Total
    Available-for-sale

$
7,160.2


$
7,160.2


$
70.7


$
(6.6
)   Available-for-sale
  Concentrations
    of Credit Risk
   7.
    Inventories    2006


2005Finished goods

$
403.8


$
400.0Raw materials and work in process


1,688.9



1,929.8Supplies


92.8



82.1Total (approximates current cost)


2,185.5



2,411.9Reduction to LIFO costs


-



-$
2,185.5


$
2,411.9Recognized as:Inventories

$
1,769.4


$
1,658.1Other assets

$
416.1


$
753.8    87




---



##### 



8.
    Other
    Intangibles    2006


2005Patents and product rights

$
1,656.3


$
1,656.3Other


775.9



180.4Total acquired cost

$
2,432.2


$
1,836.7Patents and product rights

$
1,321.5


$
1,191.8Other


166.8



126.2Total accumulated amortization

$
1,488.3


$
1,318.0     9.
    Joint
    Ventures and Other Equity Method Affiliates    Years Ended
    December 31

2006


2005


2004Merck/Schering-Plough

$
1,218.6


$
570.4


$
132.0AstraZeneca LP


783.7



833.5



646.5Other(1)


292.1



313.2



229.7$
2,294.4


$
1,717.1


$
1,008.2   (1)
    
    Primarily reflects results from
    Merial Limited, and joint ventures with Sanofi Pasteur and
    Johnson & Johnson.  Merck/Schering-Plough
 Zetia Ezetrol Zetia Zetia Zocor Vytorin Inegy Vytorin
  Zetia Vytorin Zetia direct-to-consumer out-of-pocket
 88




---



##### 



Singulair
  AstraZeneca
    LP
 Prilosec,
    Nexium Prilosec.
  Nexium Prilosec. Nexium Prilosec
 89




---



##### 



true-up True-Up
  True-Up True-Up
  Sanofi
    Pasteur MSD
   Merial
    Limited
   Johnson &
    JohnsonoMerck
    Consumer Pharmaceuticals Company
 over-the-counter
      Years Ended
    December 31

2006


2005


2004Sales

$
14,277.8


$
11,804.6


$
9,821.1Materials and production costs


5,308.7



4,627.4



4,140.9Other expense, net


4,042.9



3,918.0



3,691.4Income before taxes


4,926.2



3,259.2



1,988.8   90




---



##### 



December 31

2006


2005Current assets

$
7,772.7


$
6,389.0Noncurrent assets


1,483.6



1,430.5Current liabilities


4,074.9



3,420.0Noncurrent liabilities


215.6



160.4   10.
    Loans
    Payable, Long-Term Debt and Other Commitments  18-month,
    2006


20056.0% Astra note due 2008

$
1,380.0


$
1,380.04.8% notes due 2015


1,017.0



992.04.4% notes due 2013


503.0



509.86.4% debentures due 2028


499.2



499.25.8% notes due 2036


497.6



-6.0% debentures due 2028


497.0



496.82.5% notes due 2007


-



343.0Variable-rate borrowing due 2009


300.0



300.05.1% notes due 2011


249.1



-6.3% debentures due 2026


247.8



247.6Other


360.3



357.2$
5,551.0


$
5,125.6          91




---



##### 



11.
    Contingencies
    and Environmental Liabilities      VioxxLitigation
  Product
    Liability Lawsuits
 and/or Vioxx. Vioxx and/or Vioxx
  Vioxx
  Vioxx
  Vioxx
 92




---



##### 



Vioxx Vioxx
  Vioxx
  Vioxx
    Vioxx.
             93




---



##### 



Vioxx
 94




---



##### 



Vioxx
  State orFederalVerdict Date


Plaintiff


Court


Result


CommentsAug. 19, 2005


Ernst


Texas


Verdict for Plaintiff


Jury awarded plaintiff
    $253.4 million; the Court reduced amount to approximately
    $26.1 million plus interest. The judgment is now on appeal.Nov. 3, 2005


Humeston


N.J.


Verdict for Merck;
    then judge overturned the verdict


Judge has ordered a new trial,
    which is currently ongoing.Feb. 17, 2006


Plunkett


Federal


Mistrial after jury deadlocked in
    first trial; verdict for Merck in retrial


Merck prevailed in February 2006
    retrial.
    Plaintiff has moved for a new trial.April 5, 2006


McDarby


N.J.


Verdict for Plaintiff


Plaintiff was awarded
    $13.5 million in damages. Mercks motion for a new
    trial is pending, as is plaintiffs motion for
    attorneys fees.April 5, 2006


Cona


N.J.


Verdict for Merck on failure to
    warn claim


However, the jury awarded plaintiff
    the nominal sum of $135 for his Consumer Fraud Act claim.
    Mercks motion for a new trial on the Consumer Fraud Act
    claim is pending, as is plaintiffs motion for
    attorneys fees.April 21, 2006


Garza


Texas


Verdict for Plaintiff


Judge reduced $32 million jury
    award to $7.75 million plus interest. Merck has moved for a
    new trial.July 13, 2006


Doherty


N.J.


Verdict for Merck


Plaintiff has moved for a new trial.Aug. 2, 2006


Grossberg


California


Verdict for Merck


Plaintiff has moved for a new trial.Aug. 17, 2006


Barnett


Federal


Verdict for Plaintiff


Plaintiff awarded $51 million
    in damages. The judge ruled the award was grossly
    excessive, and has scheduled a new trial on damages in
    October 2007. Mercks motion for a new trial on the
    remaining issues is pending.Sept. 26, 2006


Smith


Federal


Verdict for MerckNov. 15, 2006


Mason


Federal


Verdict for MerckDec. 13, 2006


Dedrick


Federal


Verdict for Merck


Plaintiff has moved for a new trial.Dec. 15, 2006


Albright


Alabama


Verdict for Merck


Plaintiff has moved for a new trial.Jan. 18, 2007


Arrigale/Appell


California


Mistrial declared after the jury
    deadlocked   Other
    Lawsuits
 Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx and/or
 95




---



##### 



and/or
  Shareholder
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx.
  Vioxx Vioxx Vioxx
  Vioxx. Vioxx.
  Vioxx Vioxx
 96




---



##### 



Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx
  International
    Lawsuits
 Vioxx Vioxx
  Additional
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx and/or
  Insurance
 Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx
  Investigations
 Vioxx. Vioxx Vioxx.
 97




---



##### 



Vioxx and/or
  Vioxx.
  Vioxx
  Reserves
 Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Other
    Product Liability Litigation
  Fosamax Fosamax
 98




---



##### 



and/or Fosamax. Fosamax Fosamax Fosamax
  Fosamax Fosamax Fosamax Fosamax Fosamax
  Commercial
    Litigation
       99




---



##### 



Pepcid
    Governmental
    Proceedings
  Pepcid.
       100




---



##### 



Tienam
  Vaccine
    Litigation
  and/or M-M-R
      and/or M-M-R M-M-R
 101




---



##### 



Patent
    Litigation
  Fosamax Prilosec, Nexium Propecia, Trusopt Cosopt Prilosec Nexium Prilosec. Fosamax Propecia Trusopt Cosopt Prilosec Nexium
  Zetia Zetia. Zetia
  Singulair
  Fosamax Fosamax Fosamax Plus D Fosamax Fosamax Plus D
    Fosamax
   102




---



##### 



Trusopt Cosopt Trusopt Cosopt. Cosopt. Trusopt Cosopt
    Nexium. Nexium.
  Propecia
  Cozaar
  Other
    Litigation
   103




---



##### 



104




---



##### 



Environmental
    Matters
  de minimis
      12.
    Preferred
    Stock of Subsidiary Companies      13.
    Stockholders
    Equity   105




---



##### 



2006


2005


2004Shares


Cost


Shares


Cost


Shares


CostBalance, January 1


794.3


$
26,984.4



767.6


$
26,191.8



754.5


$
25,617.5Purchases


26.4



1,002.3



33.2



1,015.3



24.9



974.6Issuances(1)


(12.3
)


(419.3
)


(6.5
)


(222.7
)


(11.8
)


(400.3
)Balance, December 31


808.4


$
27,567.4



794.3


$
26,984.4



767.6


$
26,191.8   (1)
    
    Issued primarily under stock
    option plans.    14.
    Share-Based
    Compensation Plans      Transition Election Related to Accounting for the Tax
    Effects of Share-Based Payment Awards
 106




---



##### 



Years Ended
    December 31

2006


2005


2004Pre-tax share-based compensation
    expense

$
312.5


$
48.0


$
25.7Income tax benefits


(98.5
)


(16.8
)


(9.0
)Total share-based compensation
    expense, net of tax

$
214.0


$
31.2


$
16.7     Year Ended
    December 31

2006Income Before Taxes

$
227.8Net Income

$
159.0Earnings per Common Share Assuming
    Dilution

$
0.07     Years Ended
    December 31

2005


2004Net income, as reported

$
4,631.3


$
5,830.1Compensation expense, net of tax:Reported


31.2



16.7Fair value method


(357.1
)


(491.8
)Pro forma net income

$
4,305.4


$
5,355.0Earnings per common share:Basic - as reported


$2.11



$2.63Basic - pro forma


$1.96



$2.41Assuming dilution - as
    reported


$2.10



$2.62Assuming dilution - pro forma


$1.96



$2.40     Accounting for Stock
    Appreciation Rights and Other Variable Stock Option or Award
    Plans.
 107




---



##### 



Year Ended
    December 31

2006


2005


2004Expected dividend yield


4.2
%


4.8
%


3.4
%Risk-free interest rate


4.6
%


4.0
%


3.1
%Expected volatility


26
%


32
%


30
%Expected life (years)


5.7



5.7



5.7     WeightedWeighted


Average


AggregateAverage


Remaining


IntrinsicNumber


Exercise


Contractual


Valueof Options


Price


Term


($000s)Balance at December 31, 2005


250,088.0


$
54.52Granted


33,524.2



36.10Exercised


(12,256.8
)


30.18Forfeited


(16,018.7
)


56.77Outstanding at
    December 31, 2006


255,336.7


$
53.13



5.11


$
666,620.3Exercisable at
    December 31, 2006


193,798.7


$
58.33



3.35


$
182,489.1     Year Ended
    December 31

2006


2005


2004Total intrinsic value of stock
    options exercised

$
67.3


$
58.8


$
278.9Fair value of stock options vested

$
857.4


$
949.3


$
900.7Cash received from the exercise of
    stock options

$
369.9


$
136.5


$
240.3  108




---



##### 



RSUs


PSUsWeighted





WeightedAverage





AverageNumber


Grant Date


Number


Grant Dateof Shares


Fair Value


of Shares


Fair ValueNonvested at December 31, 2005


4,765.1


$
35.93



1,022.2


$
39.73Granted


1,583.9



35.44



523.3



35.14Vested


(76.7
)


34.68



-



-Forfeited


(271.7
)


35.19



(168.7
)


34.75Nonvested at December 31,
    2006


6,000.6


$
35.85



1,376.8


$
38.59     15.
    Pension
    and Other Postretirement Benefit Plans      Pension Benefits


Other Postretirement BenefitsYears Ended
    December 31

2006


2005


2004


2006


2005


2004Service cost

$
363.7


$
338.8


$
307.7


$
91.3


$
87.9


$
86.0Interest cost


341.3



310.6



286.0



100.1



106.0



105.7Expected return on plan assets


(436.8
)


(400.7
)


(367.7
)


(112.6
)


(103.0
)


(89.4
)Net amortization


169.4



156.1



130.0



1.9



22.0



31.0Termination benefits


29.7



32.0



18.4



3.6



6.5



3.1Curtailments


-



9.1



-



(2.6
)


0.7



(12.3
)Settlements


14.7



(4.2
)


23.0



-



-



-Net pension and postretirement cost

$
482.0


$
441.7


$
397.4


$
81.7


$
120.1


$
124.1        109




---



##### 



Employers Accounting for
    Defined Benefit Pension and Other Postretirement Plans, an
    amendment of FASB Statements No. 87, 106 and 132R
    Before





AfterApplication of


FAS 158


Application ofFAS 158


Adjustments


FAS 158Prepaid expenses and taxes

$
1,417.4


$
15.6


$
1,433.0Other assets


7,193.2



(1,211.4
)


5,981.8Accrued and other current
    liabilities


(6,654.4
)


1.1



(6,653.3
)Deferred income taxes and
    noncurrent liabilities


(6,309.4
)


(20.9
)


(6,330.3
)Accumulated other comprehensive
    income (loss)


(51.3
)


1,215.6



1,164.3  110




---



##### 



Pension Benefits


Other Postretirement Benefits2006


2005


2006


2005Fair value of plan assets at
    January 1

$
6,070.6


$
5,480.9


$
1,277.4


$
1,165.3Actual return on plan assets


955.7



391.6



209.9



101.9Company contributions


494.4



497.7



36.5



46.3Benefits paid from plan assets


(468.8
)


(306.2
)


(39.6
)


(36.1
)Other


4.8



6.6



-



-Fair value of plan assets at
    December 31

$
7,056.7


$
6,070.6


$
1,484.2


$
1,277.4Benefit obligation at January 1

$
6,523.5


$
5,879.5


$
1,816.6


$
1,892.4Service cost


363.7



338.8



91.3



87.9Interest cost


341.3



310.6



100.1



106.0Actuarial losses (gains)


150.7



286.3



(16.0
)


(29.3
)Benefits paid


(502.1
)


(329.1
)


(62.0
)


(88.5
)Plan amendments


11.3



18.2



(111.8
)


(159.1
)Curtailments


(22.7
)


(12.2
)


-



0.7Termination benefits


29.7



32.0



3.6



6.5Other


31.4



(0.6
)


-



-Benefit obligation at
    December 31

$
6,926.8


$
6,523.5


$
1,821.8


$
1,816.6Funded status at December 31

$
129.9


$
(452.9
)

$
(337.6
)

$
(539.2
)Unrecognized net loss

$
-


$
2,300.3


$
-


$
682.7Unrecognized plan changes


-



85.4



-



(338.9
)Net amount recorded

$
129.9


$
1,932.8


$
(337.6
)

$
(195.4
)Recognized as:Other assets

$
915.7


$
2,347.4


$
376.5


$
-Accrued and other current
    liabilities


(20.0
)


(8.0
)


(24.6
)


(24.9
)Deferred income taxes and
    noncurrent liabilities


(765.8
)


(439.3
)


(689.5
)


(170.5
)Accumulated other comprehensive
    loss


-



32.7



-



-    111




---



##### 



Pension Benefits


Other Postretirement Benefits2006


2005


2006


2005U.S. equities


39
%


39
%


56
%


54
%International equities


34
%


33
%


28
%


29
%Fixed-income investments


22
%


19
%


15
%


15
%Real estate and other investments


4
%


3
%


0
%


0
%Cash and cash equivalents


1
%


6
%


1
%


2
%100
%


100
%


100
%


100
%           OtherPension


PostretirementBenefits


Benefits2007

$
239.4


$
76.42008


261.3



81.82009


280.6



88.12010


300.7



94.62011


336.0



101.32012 - 2016


2,185.6



611.5        112




---



##### 



U.S. Pension and OtherPostretirementPension Plans


Benefit PlansDecember 31

2006


2005


2004


2006


2005


2004Net
    costDiscount rate


5.15
%


5.40
%


5.65
%


5.75
%


6.00
%(1)


6.25
%Expected rate of return on plan
    assets


7.65
%


7.65
%


7.70
%


8.75
%


8.75
%


8.75
%Salary growth rate


4.20
%


4.10
%


4.10
%


4.50
%


4.50
%


4.50
%Benefit
    obligationDiscount rate


5.35
%


5.15
%


5.40
%


6.00
%


5.75
%


6.00
%Salary growth rate


4.20
%


4.20
%


4.10
%


4.50
%


4.50
%


4.50
%  (1)
    
    5.75% used for other
    postretirement benefit plans.      December 31

2006


2005Health care cost trend rate
    assumed for next year


9.0
%


9.0
%Rate to which the cost trend rate
    is assumed to decline


5.0
%


5.0
%Year that the trend rate reaches
    the ultimate trend rate


2014



2013     One Percentage PointIncrease


DecreaseEffect on total service and
    interest cost components

$
35.5


$
(28.2
)Effect on benefit obligation

$
272.5


$
(222.8
)  113




---



##### 



16.
    Other
    (Income) Expense, Net  Years Ended
    December 31

2006


2005


2004Interest income

$
(764.3
)

$
(480.9
)

$
(300.1
)Interest expense


375.1



385.5



293.7Exchange gains


(25.0
)


(16.1
)


(18.4
)Minority interests


120.5



121.8



154.2Other, net


(89.0
)


(120.5
)


(473.4
)$
(382.7
)

$
(110.2
)

$
(344.0
)       17.
    Taxes on
    Income    2006


Tax RateAmount


2006


2005


2004U.S. statutory rate applied
    to income before taxes

$
2,177.5



35.0
%


35.0
%


35.0
%Differential arising from:Foreign earnings


(1,024.1
)


(16.5
)


(12.8
)


(10.0
)Tax exemption for Puerto Rico
    operations


(87.6
)


(1.4
)


(1.3
)


(1.6
)Acquired research


266.9



4.3



-



0.5State taxes


129.6



2.1



2.5



1.3AJCA


-



-



10.4



-Other


325.3



5.2



3.3



1.9$
1,787.6



28.7
%


37.1
%


27.1
%    114




---



##### 



Years Ended
    December 31

2006


2005


2004Current provisionFederal

$
1,618.4


$
1,688.1


$
1,429.1Foreign


458.3



739.6



530.9State


241.1



295.9



163.82,317.8



2,723.6



2,123.8Deferred provisionFederal


(374.1
)


97.0



95.6Foreign


(130.3
)


(134.0
)


(32.3
)State


(25.8
)


46.0



(14.4
)(530.2
)


9.0



48.9$
1,787.6


$
2,732.6


$
2,172.7     2006


2005Assets


Liabilities


Assets


LiabilitiesOther intangibles

$
27.3


$
344.1


$
36.0


$
158.2Inventory related


455.2



177.7



628.1



266.9Accelerated depreciation


-



1,262.2



-



1,539.1Advance payment


338.6



-



338.6



-Equity investments


142.4



863.8



104.5



676.1Pensions and OPEB


281.9



188.9



151.3



789.9Compensation related


249.1



-



151.9



-Vioxxlegal defense costs
    reserve


306.8



-



241.1



-Net operating losses


448.4



-



314.9



-Other


1,404.0



269.2



1,208.9



426.3Subtotal


3,653.7



3,105.9



3,175.3



3,856.5Valuation allowance


(101.8
)


-



(17.6
)


-Total deferred taxes

$
3,551.9


$
3,105.9


$
3,157.7


$
3,856.5Net deferred income taxes

$
446.0










$
698.8Recognized as:Prepaid expenses and taxes

$
1,177.7






$
662.2Other assets


183.7







68.5Income taxes payable





$
62.8






$
159.7Deferred income taxes and
    noncurrent liabilities






852.6







1,269.8    115




---



##### 



1993-2001
     116




---



##### 



18.
    Earnings
    per Share    Years Ended
    December 31

2006


2005


2004Average common shares outstanding


2,177.6



2,197.0



2,219.0Common shares
    issuable(1)


10.1



3.4



7.4Average common shares outstanding
    assuming dilution


2,187.7



2,200.4



2,226.4   (1)
    
    Issuable primarily under
    share-based compensation plans.    19.
    Comprehensive
    Income    Pretax(1)


Tax


After TaxYear Ended December 31,
    2006Net unrealized loss on
    derivatives

$
(111.2
)

$
45.2


$
(66.0
)Net loss realization


25.5



(10.4
)


15.1Derivatives


(85.7
)


34.8



(50.9
)Net unrealized gain on
    investments


33.9



(7.8
)


26.1Net loss realization


0.2



(0.2
)


-Investments


34.1



(8.0
)


26.1Minimum pension
    liability


34.8



(12.3
)


22.5Cumulative translation
    adjustment related
    to equity investees


29.0



(10.1
)


18.9$
12.2


$
4.4


$
16.6Year Ended December 31,
    2005Net unrealized gain on derivatives

$
93.6


$
(38.3
)

$
55.3Net loss realization


44.0



(18.0
)


26.0Derivatives


137.6



(56.3
)


81.3Net unrealized loss on investments


(23.5
)


1.6



(21.9
)Net loss realization


71.1



1.1



72.2Investments


47.6



2.7



50.3Minimum pension liability


(11.9
)


4.9



(7.0
)Cumulative translation adjustment
    related to
    equity investees


(40.6
)


14.2



(26.4
)$
132.7


$
(34.5
)

$
98.2 117




---



##### 



Pretax(1)


Tax


After TaxYear Ended December 31,
    2004Net unrealized loss on derivatives

$
(117.8
)

$
48.2


$
(69.6
)Net loss realization


64.2



(26.3
)


37.9Derivatives


(53.6
)


21.9



(31.7
)Net unrealized loss on investments


(38.4
)


(9.6
)


(48.0
)Net income realization


(89.7
)


36.8



(52.9
)Investments


(128.1
)


27.2



(100.9
)Minimum pension liability


(7.2
)


2.3



(4.9
)Cumulative translation adjustment
    related to 
    equity investees


40.2



(14.1
)


26.1$
(148.7
)

$
37.3


$
(111.4
)   (1)
    
    Net of applicable minority
    interest.    December 31

2006


2005Net unrealized (loss) gain on
    derivatives

$
(35.3
)

$
15.6Net unrealized gain on investments


85.6



59.5Minimum pension liability


-



(22.5
)Pension plan net loss


(1,103.7
)


-Other postretirement benefit plan
    net loss


(315.1
)


-Pension plan changes


(57.8
)


-Other postretirement benefit plan
    changes


243.4



-Cumulative translation adjustment
    related to
    equity investees


18.6



(0.3
)$
(1,164.3
)

$
52.3     20.
    Segment
    Reporting  Disclosures about
    Segments of an Enterprise and Related Information.
  non-U.S. subsidiaries
 118




---



##### 



Pharmaceutical


Vaccines(1)


All Other


TotalYear Ended December 31,
    2006Segment revenues

$
20,374.8


$
1,705.5


$
162.1


$
22,242.4Segment profits


13,649.4



892.8



380.7



14,922.9Included in segment
    profits:Equity income from
    affiliates


1,673.1



72.4



315.2



2,060.7Depreciation and
    amortization


(153.0
)


(5.0
)


-



(158.0
)Year Ended December 31,
    2005Segment revenues

$
20,678.8


$
984.2


$
161.8


$
21,824.8Segment profits


13,157.9



767.0



355.5



14,280.4Included in segment profits:Equity income from affiliates


1,006.5



108.9



290.1



1,405.5Depreciation and amortization


(148.8
)


(4.2
)


-



(153.0
)Year Ended December 31,
    2004Segment revenues

$
21,591.0


$
972.8


$
185.1


$
22,748.9Segment profits


13,560.3



881.4



278.2



14,719.9Included in segment profits:Equity income from affiliates


512.8



111.3



196.4



820.5Depreciation and amortization


(151.8
)


(4.3
)


-



(156.1
)   (1)
    In accordance with segment
    reporting requirements, Vaccines segment revenues exclude
    $153.9 million, $119.1 million and $97.5 million
    in 2006, 2005 and 2004, respectively, of vaccine sales by
    certain
    non-U.S. subsidiaries
    managed by and included in the Pharmaceutical segment.      Years Ended
    December 31

2006


2005


2004Segment revenues

$
22,242.4


$
21,824.8


$
22,748.9Other revenues


393.6



187.1



223.9$
22,636.0


$
22,011.9


$
22,972.8    119




---



##### 



(1)
  Years Ended
    December 31

2006


2005


2004Singulair

$
3,579.0


$
2,975.6


$
2,622.0Cozaar/Hyzaar


3,163.1



3,037.2



2,823.7Fosamax


3,134.4



3,191.2



3,159.7Zocor


2,802.7



4,381.7



5,196.5Primaxin


704.8



739.6



640.6Cosopt/Trusopt


697.1



617.2



558.8Proscar


618.5



741.4



733.1Vasotec/Vaseretic


547.2



623.1



719.2Cancidas


529.8



570.0



430.0Maxalt


406.4



348.4



309.9Propecia


351.8



291.9



270.2Vioxx


-



-



1,489.3Vaccines/Biologicals(2)


1,859.4



1,103.3



1,070.3Other


4,241.8



3,391.3



2,949.5$
22,636.0


$
22,011.9


$
22,972.8   (1)
    
    Presented net of discounts and
    returns.(2)
    
    These amounts do not reflect
    sales of vaccines sold in most major European markets through
    the Companys joint venture, Sanofi Pasteur MSD, the
    results of which are reflected in equity income from
    affiliates.  Nexium Prilosec.
    Years Ended
    December 31

2006


2005


2004United States

$
13,776.8


$
12,766.6


$
13,506.2Europe, Middle East and Africa


4,977.1



5,203.5



5,440.8Japan


1,479.0



1,637.9



1,668.2Other


2,403.1



2,403.9



2,357.6$
22,636.0


$
22,011.9


$
22,972.8  120




---



##### 



Years Ended
    December 31

2006


2005


2004Segment profits

$
14,922.9


$
14,280.4


$
14,719.9Other profits


256.7



175.3



24.6Adjustments


516.3



615.3



481.3Unallocated:Interest income


764.3



480.9



300.1Interest expense


(375.1
)


(385.5
)


(293.7
)Equity income from affiliates


233.7



311.6



187.7Depreciation and amortization


(2,110.4
)


(1,555.1
)


(1,294.6
)Research and development


(4,782.9
)


(3,848.0
)


(4,010.2
)Other expenses, net


(3,204.1
)


(2,711.0
)


(2,112.3
)$
6,221.4


$
7,363.9


$
8,002.8     (1)
  Years Ended
    December 31

2006


2005


2004United States

$
11,542.7


$
11,525.6


$
11,894.5Europe, Middle East and Africa


1,730.7



1,991.2



2,043.4Japan


942.4



1,074.7



1,127.1Other


1,353.8



1,411.1



1,413.6$
15,569.6


$
16,002.6


$
16,478.6   (1)
    
    Long-lived assets are comprised
    of property, plant and equipment, net; goodwill and intangible
    assets, net.   121




---



##### 



Report
    of Independent Registered Public Accounting Firm  
    Consolidated financial statements
        Internal control over financial reporting
  Internal Control  Integrated Framework Internal Control 
    Integrated Framework
   122




---



##### 



123




---



##### 



(b)
    Supplementary
    Data    Condensed
    Interim Financial Data (Unaudited)
  ($ in millions except per share
    amounts)

4th Q(1),(2),(3)


3rd Q(2)


2nd Q(1),(3)


1st Q2006(4),(5)Sales

$
6,044.2


$
5,410.4


$
5,771.7


$
5,409.8Materials and production
    costs


1,669.1



1,544.1



1,445.2



1,342.7Marketing and administrative
    expenses


2,345.8



2,370.6



1,734.0



1,715.0Research and development
    expenses


1,722.9



945.4



1,172.5



942.0Restructuring costs


55.8



49.6



(6.9
)


43.7Equity income from
    affiliates


(584.2
)


(595.4
)


(611.3
)


(503.4
)Other (income) expense,
    net


(77.1
)


(134.7
)


(70.1
)


(100.6
)Income before taxes


911.9



1,230.8



2,108.3



1,970.4Net income


473.9



940.6



1,499.3



1,520.0Basic earnings per common
    share


$0.22



$0.43



$0.69



$0.70Earnings per common share
    assuming dilution


$0.22



$0.43



$0.69



$0.692005(4)Sales

$
5,765.9


$
5,416.2


$
5,467.5


$
5,362.2Materials and production costs


1,478.8



1,238.8



1,160.6



1,271.4Marketing and administrative
    expenses


2,139.1



1,661.4



1,749.5



1,605.5Research and development expenses


1,112.0



942.6



946.8



846.6Restructuring costs


228.9



79.8



5.8



7.8Equity income from affiliates


(586.6
)


(480.1
)


(334.1
)


(316.3
)Other (income) expense, net


(126.3
)


(24.7
)


14.0



26.5Income before taxes


1,520.0



1,998.4



1,924.9



1,920.7Net income


1,119.7



1,420.9



720.6



1,370.1Basic earnings per common share


$0.51



$0.65



$0.33



$0.62Earnings per common share assuming
    dilution


$0.51



$0.65



$0.33



$0.62   (1)
    
    Amounts for 2006 include
    acquired research expenses associated with
    acquisitions.(2)
    
    Amounts for fourth and third
    quarter 2006 and fourth quarter 2005 include the impact of
    additionalVioxx
    legal defense reserves (see Note 11). Amounts for fourth
    quarter 2006 include the impact ofFosamax legal defense
    reserves (see Note 11).(3)
    
    Amounts for 2005 include the
    impact of the net tax charge primarily associated with the AJCA
    repatriation (see Note 17).(4)
    
    Amounts for 2006 and 2005
    include the impact of restructuring actions (see
    Note 4).(5)
    
    Amounts for 2006 reflect the
    incremental impact of expensing stock options. 124




---



##### 



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  Form 10-K, Rules 13a-15(e) 15d-15(e)
  Rule 13a-15(f) Internal Control  Integrated
    Framework Internal
    Control  Integrated Framework
   Managements
    Report  Managements
    Responsibility For Financial Statements
  Form 10-K
      Form 10-K Form 10-K
 125




---



##### 



Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f). Internal Control  Integrated Framework Internal Control  Integrated
    Framework
  Richard T. ClarkChief Executive Officer
    and President

Judy C. LewentExecutive Vice President
    and Chief Financial Officer   Item 9B.
    Other
    Information.   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance.      Our
    Values and Standards www.merck.com/about/corporategovernance 08889-0100.
    Item 11.
    Executive
    Compensation.   126




---



##### 



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.      Item 14.
    Principal
    Accountant Fees and Services.   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules.  Form 10-K
  1. Financial Statements
      Consolidated statement of comprehensive income for the years
    ended December 31, 2006, 2005 and 2004         127




---



##### 



2. Financial Statement Schedules
      3.
    Exhibits  ExhibitNumber



Description2
.1



Master Restructuring Agreement
    dated as of June 19, 1998 between Astra AB,
    Merck & Co., Inc., Astra Merck Inc., Astra USA, Inc.,
    KB USA, L.P., Astra Merck Enterprises, Inc., KBI Sub Inc., Merck
    Holdings, Inc. and Astra Pharmaceuticals, L.P. (Portions of this
    Exhibit are subject to a request for confidential treatment
    filed with the Commission)  Incorporated by reference
    to
    Form 10-Q
    Quarterly Report for the period ended June 30, 19982
.2



Agreement and Plan of Merger by
    and among Merck & Co., Inc., Spinnaker Acquisition
    Corp., a wholly owned subsidiary of Merck & Co., Inc.
    and Sirna Therapeutics, Inc., dated as of October 30,
    2006  Incorporated by reference to Current Report on
    Form 8-K
    dated October 30, 20063
.1



Restated Certificate of
    Incorporation of Merck & Co., Inc. (October 1,
    2004)  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended September 30, 20043
.2



By-Laws of Merck & Co.,
    Inc. (as amended effective May 24, 2005) 
    Incorporated by reference to Current Report on
    Form 8-K
    dated May 24, 20054
.1



Indenture, dated as of
    April 1, 1991, between Merck & Co., Inc. and
    Morgan Guaranty Trust Company of New York, as
    Trustee  Incorporated by reference to Exhibit 4
    to Registration Statement on
    Form S-3
    (No. 33-39349)4
.2



First Supplemental Indenture
    between Merck & Co., Inc. and First Trust of New York,
    National Association, as Trustee  Incorporated by
    reference to Exhibit 4(b) to Registration Statement on
    Form S-3
    (No. 333-36383)*10
.1



Executive Incentive Plan (as
    amended effective February 27, 1996) 
    Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 1995*10
.2



Base Salary Deferral Plan (as
    adopted on October 22, 1996, effective January 1,
    1997)  Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 1996*10
.3



Merck & Co., Inc.
    Deferral Program (amended and restated as of September 28,
    2006)  Incorporated by reference to Current Report on
    Form 8-K
    dated September 26, 2006*10
.4



1996 Incentive Stock Plan (amended
    and restated as of December 19, 2006)*10
.5



2001 Incentive Stock Plan (amended
    and restated as of December 19, 2006)*10
.6



2004 Incentive Stock Plan (amended
    and restated as of December 19, 2006)*10
.7



2007 Incentive Stock Plan (as
    amended effective December 19, 2006)*10
.8



Merck & Co., Inc. Change
    in Control Separation Benefits Plan  Incorporated by
    reference to Current Report on
    Form 8-K
    dated November 23, 2004*10
.9



Merck & Co., Inc.
    Separation Benefits Plan for Nonunion Employees (amended and
    restated effective as of July 11, 2006) 
    Incorporated by reference to Current Report on
    Form 8-K
    dated July 11, 2006*10
.10



Non-Employee Directors Stock
    Option Plan (as amended and restated February 24,
    1998)  Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 1997*10
.11



1996 Non-Employee Directors Stock
    Option Plan (as amended April 27, 1999) 
    Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 1999*10
.12



2001 Non-Employee Directors Stock
    Option Plan (as amended April 19, 2002) 
    Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 2002 128




---



##### 



ExhibitNumber



Description*10
.13



2006 Non-Employee Directors Stock
    Option Plan (effective April 25, 2006; as amended and
    restated February 27, 2007)*10
.14



Supplemental Retirement Plan (as
    amended effective January 1, 1995)  Incorporated
    by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 1994*10
.15



Retirement Plan for the Directors
    of Merck & Co., Inc. (amended and restated
    June 21, 1996)  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 1996*10
.16



Plan for Deferred Payment of
    Directors Compensation (amended and restated as of
    October 1, 2006)  Incorporated by reference to
    Current Report on
    Form 8-K
    dated September 26, 2006*10
.17



Offer Letter between
    Merck & Co., Inc. and Peter S. Kim, dated
    December 15, 2000  Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 2003*10
.18



Offer Letter between
    Merck & Co., Inc. and Peter Loescher, dated
    March 15, 2006  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended March 31, 2006*10
.19



Letter Agreement between
    Merck & Co., Inc. and Per Wold-Olsen, dated
    July 19, 2006  Incorporated by reference to
    Current Report on
    Form 8-K
    dated July 28, 2006*10
.20



Letter Agreement between
    Merck & Co., Inc. and Bradley T. Sheares, dated
    August 24, 2006*10
.21



Letter Agreement between
    Merck & Co., Inc. and David W. Anstice, dated
    December 15, 200610
.22



Amended and Restated License and
    Option Agreement dated as of July 1, 1998 between Astra AB
    and Astra Merck Inc.  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.23



KBI Shares Option Agreement
    dated as of July 1, 1998 by and among Astra AB,
    Merck & Co., Inc. and Merck Holdings, Inc. 
    Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.24



KBI-E Asset Option Agreement dated
    as of July 1, 1998 by and among Astra AB, Merck &
    Co., Inc., Astra Merck Inc. and Astra Merck Enterprises
    Inc.  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.25



KBI Supply Agreement dated as of
    July 1, 1998 between Astra Merck Inc. and Astra
    Pharmaceuticals, L.P. (Portions of this Exhibit are subject to a
    request for confidential treatment filed with the
    Commission).  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.26



Second Amended and Restated
    Manufacturing Agreement dated as of July 1, 1998 among
    Merck & Co., Inc., Astra AB, Astra Merck Inc. and Astra
    USA, Inc.  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.27



Limited Partnership Agreement
    dated as of July 1, 1998 between KB USA, L.P. and KBI Sub
    Inc.  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.28



Distribution Agreement dated as of
    July 1, 1998 between Astra Merck Enterprises Inc. and Astra
    Pharmaceuticals, L.P.  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.29



Agreement to Incorporate Defined
    Terms dated as of June 19, 1998 between Astra AB,
    Merck & Co., Inc., Astra Merck Inc., Astra USA, Inc.,
    KB USA, L.P., Astra Merck Enterprises Inc., KBI Sub Inc., Merck
    Holdings, Inc. and Astra Pharmaceuticals, L.P. 
    Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.30



Form of Voting Agreement made and
    entered into as of October 30, 2006 by and between
    Merck & Co., Inc. and Sirna Therapeutics,
    Inc.  Incorporated by reference to Current Report on
    Form 8-K
    dated October 30, 200612




Computation of Ratios of Earnings
    to Fixed Charges21




Subsidiaries of Merck &
    Co., Inc. 129




---



##### 



ExhibitNumber



Description23




Consent of Independent Registered
    Public Accounting Firm  Contained on page 132 of
    this Report24
.1



Power of Attorney24
.2



Certified Resolution of Board of
    Directors31
.1



Rule 13a-14(a)/15d-14(a)
    Certification of Chief Executive Officer31
.2



Rule 13a-14(a)/15d-14(a)
    Certification of Chief Financial Officer32
.1



Section 1350 Certification of
    Chief Executive Officer32
.2



Section 1350 Certification of
    Chief Financial Officer     *
    
    Management contract or compensatory plan or arrangement  08889-0100.
 130




---



##### 



SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of
    the Securities Exchange Act of 1934, the registrant has duly
    caused this report to be signed on its behalf by the
    undersigned, thereunto duly authorized.
     By
    RICHARD
    T. CLARK   By
    CELIA
    A. COLBERT  (Attorney-in-Fact)
  Pursuant to the requirements of the Securities Exchange Act
    of 1934, this report has been signed below by the following
    persons on behalf of the registrant and in the capacities and on
    the dates indicated.
  Signatures

Title

DateRICHARD
    T. CLARK

Chief Executive Officer and
    President; Principal Executive Officer; Director

February 28, 2007JUDY
    C. LEWENT

Executive Vice President and Chief
    Financial Officer; Principal Financial Officer

February 28, 2007JOHN
    CANAN

Vice President, Controller;
    Principal Accounting Officer

February 28, 2007LAWRENCE
    A. BOSSIDY

Director

February 28, 2007WILLIAM
    G. BOWEN

Director

February 28, 2007JOHNNETTA
    B. COLE

Director

February 28, 2007WILLIAM
    B. HARRISON, JR.

Director

February 28, 2007WILLIAM
    N. KELLEY

Director

February 28, 2007ROCHELLE
    B. LAZARUS

Director

February 28, 2007THOMAS
    E. SHENK

Director

February 28, 2007ANNE
    M. TATLOCK

Director

February 28, 2007SAMUEL
    O. THIER

Director

February 28, 2007WENDELL
    P. WEEKS

Director

February 28, 2007PETER
    C. WENDELL

Director

February 28, 2007   Celia A. Colbert, by signing her name hereto, does hereby
    sign this document pursuant to powers of attorney duly executed
    by the persons named, filed with the Securities and Exchange
    Commission as an exhibit to this document, on behalf of such
    persons, all in the capacities and on the date stated, such
    persons including a majority of the directors of the Company.
  By
    CELIA
    A. COLBERT   (Attorney-in-Fact)
 131




---



##### 



Exhibit 23
 CONSENT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  Form S-3 33-39349, 33-60322, 33-57421, 333-17045, 333-36383, 333-77569, 333-72546, 333-87034 333-118186) Form S-8 33-21087, 33-21088, 33-51235, 33-53463, 33-64273, 33-64665, 333-91769, 333-30526, 333-31762, 333-53246, 333-56696, 333-72206, 333-65796, 333-101519, 333-109296, 333-117737, 333-117738, Form 10-K.
      132




---



##### 



EXHIBIT INDEX
  ExhibitNumber



Description2
.1



Master Restructuring Agreement
    dated as of June 19, 1998 between Astra AB,
    Merck & Co., Inc., Astra Merck Inc., Astra USA, Inc.,
    KB USA, L.P., Astra Merck Enterprises, Inc., KBI Sub Inc., Merck
    Holdings, Inc. and Astra Pharmaceuticals, L.P. (Portions of this
    Exhibit are subject to a request for confidential treatment
    filed with the Commission)  Incorporated by reference
    to
    Form 10-Q
    Quarterly Report for the period ended June 30, 19982
.2



Agreement and Plan of Merger by
    and among Merck & Co., Inc., Spinnaker Acquisition
    Corp., a wholly owned subsidiary of Merck & Co., Inc.
    and Sirna Therapeutics, Inc., dated as of October 30,
    2006  Incorporated by reference to Current Report on
    Form 8-K
    dated October 30, 20063
.1



Restated Certificate of
    Incorporation of Merck & Co., Inc. (October 1,
    2004)  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended September 30, 20043
.2



By-Laws of Merck & Co.,
    Inc. (as amended effective May 24, 2005) 
    Incorporated by reference to Current Report on
    Form 8-K
    dated May 24, 20054
.1



Indenture, dated as of
    April 1, 1991, between Merck & Co., Inc. and
    Morgan Guaranty Trust Company of New York, as
    Trustee  Incorporated by reference to Exhibit 4
    to Registration Statement on
    Form S-3
    (No. 33-39349)4
.2



First Supplemental Indenture
    between Merck & Co., Inc. and First Trust of New York,
    National Association, as Trustee  Incorporated by
    reference to Exhibit 4(b) to Registration Statement on
    Form S-3
    (No. 333-36383)*10
.1



Executive Incentive Plan (as
    amended effective February 27, 1996) 
    Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 1995*10
.2



Base Salary Deferral Plan (as
    adopted on October 22, 1996, effective January 1,
    1997)  Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 1996*10
.3



Merck & Co., Inc.
    Deferral Program (amended and restated as of September 28,
    2006)  Incorporated by reference to Current Report on
    Form 8-K
    dated September 26, 2006*10
.4



1996 Incentive Stock Plan (amended
    and restated as of December 19, 2006)*10
.5



2001 Incentive Stock Plan (amended
    and restated as of December 19, 2006)*10
.6



2004 Incentive Stock Plan (amended
    and restated as of December 19, 2006)*10
.7



2007 Incentive Stock Plan (as
    amended effective December 19, 2006)*10
.8



Merck & Co., Inc. Change
    in Control Separation Benefits Plan  Incorporated by
    reference to Current Report on
    Form 8-K
    dated November 23, 2004*10
.9



Merck & Co., Inc.
    Separation Benefits Plan for Nonunion Employees (amended and
    restated effective as of July 11, 2006) 
    Incorporated by reference to Current Report on
    Form 8-K
    dated July 11, 2006*10
.10



Non-Employee Directors Stock
    Option Plan (as amended and restated February 24,
    1998)  Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 1997*10
.11



1996 Non-Employee Directors Stock
    Option Plan (as amended April 27, 1999) 
    Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 1999*10
.12



2001 Non-Employee Directors Stock
    Option Plan (as amended April 19, 2002) 
    Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 2002*10
.13



2006 Non-Employee Directors Stock
    Option Plan (effective April 25, 2006; as amended and
    restated February 27, 2007)*10
.14



Supplemental Retirement Plan (as
    amended effective January 1, 1995)  Incorporated
    by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 1994*10
.15



Retirement Plan for the Directors
    of Merck & Co., Inc. (amended and restated
    June 21, 1996)  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 1996*10
.16



Plan for Deferred Payment of
    Directors Compensation (amended and restated as of
    October 1, 2006)  Incorporated by reference to
    Current Report on
    Form 8-K
    dated September 26, 2006 133




---



##### 



ExhibitNumber



Description*10
.17



Offer Letter between
    Merck & Co., Inc. and Peter S. Kim, dated
    December 15, 2000  Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 2003*10
.18



Offer Letter between
    Merck & Co., Inc. and Peter Loescher, dated
    March 15, 2006  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended March 31, 2006*10
.19



Letter Agreement between
    Merck & Co., Inc. and Per Wold-Olsen, dated
    July 19, 2006  Incorporated by reference to
    Current Report on
    Form 8-K
    dated July 28, 2006*10
.20



Letter Agreement between
    Merck & Co., Inc. and Bradley T. Sheares, dated
    August 24, 2006*10
.21



Letter Agreement between
    Merck & Co., Inc. and David W. Anstice, dated
    December 15, 200610
.22



Amended and Restated License and
    Option Agreement dated as of July 1, 1998 between Astra AB
    and Astra Merck Inc.  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.23



KBI Shares Option Agreement
    dated as of July 1, 1998 by and among Astra AB,
    Merck & Co., Inc. and Merck Holdings, Inc. 
    Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.24



KBI-E Asset Option Agreement dated
    as of July 1, 1998 by and among Astra AB, Merck &
    Co., Inc., Astra Merck Inc. and Astra Merck Enterprises
    Inc.  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.25



KBI Supply Agreement dated as of
    July 1, 1998 between Astra Merck Inc. and Astra
    Pharmaceuticals, L.P. (Portions of this Exhibit are subject to a
    request for confidential treatment filed with the
    Commission)  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.26



Second Amended and Restated
    Manufacturing Agreement dated as of July 1, 1998 among
    Merck & Co., Inc., Astra AB, Astra Merck Inc. and Astra
    USA, Inc.  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.27



Limited Partnership Agreement
    dated as of July 1, 1998 between KB USA, L.P. and KBI Sub
    Inc.  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.28



Distribution Agreement dated as of
    July 1, 1998 between Astra Merck Enterprises Inc. and Astra
    Pharmaceuticals, L.P.  Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.29



Agreement to Incorporate Defined
    Terms dated as of June 19, 1998 between Astra AB,
    Merck & Co., Inc., Astra Merck Inc., Astra USA, Inc.,
    KB USA, L.P., Astra Merck Enterprises Inc., KBI Sub Inc., Merck
    Holdings, Inc. and Astra Pharmaceuticals, L.P. 
    Incorporated by reference to
    Form 10-Q
    Quarterly Report for the period ended June 30, 199810
.30



Form of Voting Agreement made and
    entered into as of October 30, 2006 by and between
    Merck & Co., Inc. and Sirna Therapeutics,
    Inc.  Incorporated by reference to Current Report on
    Form 8-K
    dated October 30, 200612




Computation of Ratios of Earnings
    to Fixed Charges21




Subsidiaries of Merck &
    Co., Inc.23




Consent of Independent Registered
    Public Accounting Firm  Contained on page 132 of
    this Report24
.1



Power of Attorney24
.2



Certified Resolution of Board of
    Directors31
.1



Rule 13a-14(a)/15d-14(a)
    Certification of Chief Executive Officer31
.2



Rule 13a-14(a)/15d-14(a)
    Certification of Chief Financial Officer32
.1



Section 1350 Certification of
    Chief Executive Officer32
.2



Section 1350 Certification of
    Chief Financial Officer     *
    
    Management contract or compensatory plan or arrangement. 134