##### Table of Contents





As filed with the Securities and Exchange Commission on
    February 28, 2008
    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, 2007oro

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
    Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o

Smaller reporting
    company o(Do not check if a smaller reporting company)   Rule 12b-2 Yes o     No þ
  Documents
    Incorporated by Reference:
  Document

Part of Form 10-KProxy Statement for the Annual Meeting of
    Stockholders to be held April 22, 2008, to be filed with
    the Securities and Exchange Commission within 120 days
    after the close of the fiscal year covered by this report

Part III




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##### 





Table of
    Contents
   
 PagePart IItem 1.


Business


2Item 1A.


Risk Factors


17Cautionary Factors that May Affect Future
    Results


22Item 1B.


Unresolved Staff Comments


24Item 2.


Properties


24Item 3.


Legal Proceedings


24Item 4.


Submission of Matters to a Vote of Security
    Holders


40Executive Officers of the Registrant


41Part IIItem 5.


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


45Item 6.


Selected Financial Data


49Item 7.


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


50Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


83Item 8.


Financial Statements and Supplementary Data


84(a)


Financial Statements


84Notes to Consolidated Financial Statements


87Report of Independent Registered Public
    Accounting Firm


136(b)


Supplementary Data


137Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


138Item 9A.


Controls and Procedures


138Managements Report


138Item 9B.


Other Information


139Part IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


139Item 11.


Executive Compensation


139Item 12.


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


140Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


140Item 14.


Principal Accountant Fees and Services


140Part IVItem 15.


Exhibits and Financial Statement Schedules


140Signatures


154Consent of Independent Registered Public
    Accounting Firm


155Independent Auditors Consent


156EX-10.10: SPECIAL SEPARATION PROGRAM FOR "SEPARATED" EMPLOYEESEX-10.11: SPECIAL SEPARATION PROGRAM FOR "BRIDGED" EMPLOYEESEX-10.12: SPECIAL SEPARATION PROGRAM FOR "SEPARATED RETIREMENT ELIGIBLE" EMPLOYEESEX-12: COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGESEX-21: SUBSIDIARIESEX-24.1: POWER OF ATTORNEYEX-24.2: CERTIFIED RESOLUTION OF BOARD OF DIRECTORSEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION




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##### Table of Contents



PART I  Item 1.
    Business.      Overview
  Gardasil , Januvia , RotaTeq Zocor Proscar
  Janumet Januvia Isentress , first-in-class Emend Cordaptive Gardasil Isentress
 2




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##### Table of Contents



Vioxx Vioxx
    Vioxx Vioxx Vioxx
 3




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##### Table of Contents



Product
    Sales
  (1)
  ($ in millions)

2007


2006


2005Singulair

$
4,266.3


$
3,579.0


$
2,975.6Cozaar/Hyzaar


3,350.1



3,163.1



3,037.2Fosamax


3,049.0



3,134.4



3,191.2Zocor


876.5



2,802.7



4,381.7Cosopt/Trusopt


786.8



697.1



617.2Primaxin


763.5



704.8



739.6Januvia


667.5



42.9



-Cancidas


536.9



529.8



570.0Vasotec/Vaseretic


494.6



547.2



623.1Maxalt


467.3



406.4



348.4Proscar


411.0



618.5



741.4Propecia


405.4



351.8



291.9Arcoxia


329.1



265.4



218.2Crixivan/Stocrin


310.2



327.3



348.4Emend


204.2



130.8



87.0Invanz


190.2



139.2



93.7Janumet


86.4



-



-Other
    pharmaceutical(2)


2,465.9



2,780.5



2,295.119,660.9



20,220.9



20,559.7Vaccines:(3)Gardasil


1,480.6



234.8



-RotaTeq


524.7



163.4



-Zostavax


236.0



38.6



-ProQuad/M-M-R II/Varivax


1,347.1



820.1



597.4Hepatitis vaccines


279.9



248.5



194.5Other vaccines


409.9



354.0



311.44,278.2



1,859.4



1,103.3Other(4)


258.6



555.7



348.9$
24,197.7


$
22,636.0


$
22,011.9   (1)
    Presented net of discounts and returns.(2)
    Other pharmaceutical primarily includes sales of other human
    pharmaceutical products and revenue from the Companys
    relationship with Astra Zeneca LP (AZLP) primarily
    relating to sales ofNexium, as well asPrilosec.
    Revenue from AZLP was $1.7 billion, $1.8 billion
    and $1.7 billion in 2007, 2006 and 2005, respectively. In
    2006, other pharmaceutical also reflected certain supply sales,
    including supply sales associated with the Companys
    arrangement with Dr. Reddys Laboratories
    (Dr. Reddys) for the sale of generic
    simvastatin.(3)
    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.(4)
    Other primarily includes other human and animal health joint
    venture supply sales and other miscellaneous revenues.  Singulair Cozaar Hyzaar Vasotec Vaseretic , and/or
 4




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##### Table of Contents



Fosamax Fosamax Plus D Fosamax Zocor Cosopt Trusopt , Primaxin Cancidas , s Januvia Janumet Maxalt , Proscar Propecia Arcoxia Crixivan Stocrin Emend Invanz
  Gardasil, RotaTeq Zostavax Varivax ProQuad M-M-R
  U.S. Product Approvals Janumet Januvia Janumet
  Isentress Isentress Isentress Isentress, Isentress Isentress Isentress
  Emend Emend Emend three-day Emend IVEmend
  U.S. Product Liability Settlement Vioxx
 5




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##### Table of Contents



Vioxx
  Vioxx Vioxx
    Acquisitions
  Joint Ventures
  Pharmaceutical
 Zetia ( Ezetrol Vytorin Inegy Zetia Zocor,
  Vytorin Zetia 10/80 mg
 6




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##### Table of Contents



Vytorin Vytorin Vytorin
  Vytorin Vytorin Zetia Vytorin Zetia
  Prilosec
  Nexium Prilosec. Nexium Prilosec.
  true-up Nexium Prilosec true-up
   7




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##### Table of Contents



Pepcid AC Pepcid Pepcid Complete,
  Vaccines
   Other
   Competition
    Zocor, Zocor Fosamax Fosamax Plus D Fosamax Fosamax Plus D
  Distribution
 8




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##### Table of Contents



Raw Materials
  Government Regulation and Investigation
         9




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##### Table of Contents



Stocrin Stocrin Stocrin Stocrin Stocrin Stocrin
      Patents, Trademarks and Licenses per se
 10




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##### Table of Contents



Product

Year of Expiration (in
    U.S.)Cancidas

2015 (compound) / 2017 (formulation)Comvax

2020Cosopt

2008Cozaar

2010Crixivan

2012 (compound) / 2018 (formulation)Emend

2012 (compound) / 2015 (Patent Term Restoration)Gardasil

2020Hyzaar

2010Invanz

2016 (compound and Pediatric Exclusivity) / 2017
    (composition)Isentress

2023Januvia/Janumet

2022Maxalt

2012 (compound) / 2014 (other)Primaxin

2009Propecia

2013Recombivax

2020RotaTeq

2014 (product) / 2019 (Patent Term Restoration)Singulair

2012Trusopt

2008Zetia/Vytorin

2015 (ezetimibe  component in both products) /
    2016 (Patent Term Restoration)Zolinza

2011 (compound) / 2015 (Patent Term Restoration)Zostavax

2016   /Stocrin . Stocrin Aggrastat Aggrastat
       11




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##### Table of Contents



Fosamax Fosamax Plus D Fosamax Fosamax Plus D
      Research
    and Development
    best-in-class
       12




---



##### Table of Contents



Cordaptive
    Cordaptive) Cordaptive Cordaptive
         13




---



##### Table of Contents



A-1
           14




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##### Table of Contents



Back-up
   Phase I
  Alzheimers
    Disease
 V950
 Atherosclerosis
 MK-1903
 MK-6213
 Cancer
 MK-0646
 MK-0752
 MK-2461
 MK-4721
 V930
 Cardiovascular
 MK-0448
 MK-1809
 Diabetes
 MK-0941
 MK-2662
 MK-8245
 Phase I
  Infectious Disease
 MK-3281
 MK-4965
 MK-7009
 MK-8122
 V512
 Neurologic
 MK-8998
 MK-4305
 Ophthalmic
 MK-0140
 Parkinsons
    Disease
 MK-0657
 Psychiatric Disease
 MK-5757
 Phase II
  Alzheimers
    Disease
 MK-0249
 Atherosclerosis
 MK-0859
 MK-0633
 Cancer
 MK-0457
 MK-0822
 Cardiovascular
 MK-8141
 Diabetes
 MK-0893
 HPV
 V502
 Infectious Disease
 V419
 V710
 Neurologic
 MK-0249
 Ophthalmic
 SIRNA-027(1)
 Pain
 MK-2295*
 Psychiatric Disease
 MK-0249
 Respiratory Disease
 MK-0633
 Sarcopenia
 MK-2866
 Stroke
 MK-0724
 Phase III
  Atherosclerosis
 MK-0524B
 Cancer
 MK-8669
 (deforolimus;
 AP23573)
 Heart Failure
 MK-7418
 (rolofylline;
 KW3902)
 Hepatitis B Vaccine
 V270
 Migraine
 MK-0974
 Obesity
 MK-0364
 (taranabant)
 Osteoporosis
 MK-0822
 (odanacatib)
 Under FDA Review
  Atherosclerosis
 Cordaptive
 (pending trademark)
 (MK-0524A)
  2007
    U.S. Approvals
  Diabetes
 Janumet
 HIV
 Isentress
 (MK-0518)
  2008
    U.S. Approvals
  CINV
 Emend for Injection
 (MK-0517)
  *
    
    Proof-of-Concept
    Molecule(1)
    
    Clinical Program conducted by
    Allergan, Inc.  Zetia Vytorin Cozaar Hyzaar Prilosec Nexium Vasotec Vaseretic Aggrastat
  Employees
       15




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##### Table of Contents



Environmental
    Matters
    Geographic
    Area Information
          Available
    Information
  www.merck.com. Form 10-K, Form 10-Q, Form 8-K,
 16




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##### Table of Contents



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
  Vioxx Vioxx Vioxx
 17




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##### Table of Contents



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 Vioxx
  Vioxx Vioxx Vioxx
 18




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##### Table of Contents



Vioxx 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.
    Fosamax Fosamax Plus D Fosamax Fosamax Plus D Fosamax Fosamax Plus D Fosamax
  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
    Zocor Fosamax
 19




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Issues concerning Vytorinand the ENHANCE clinical
    trial could have a material adverse effect on sales of
    Vytorinand Zetia.
  Vytorin Zetia 10/80 mg
  Vytorin Vytorin Zetia Vytorin Zetia
  Vytorin Zetia
  Vytorin Zetia.
  The Companys products, including products in
    development, can not be marketed unless the Company obtains and
    maintains regulatory approval.
   20




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The Company is dependent on its patent rights, and if its
    patent rights are invalidated or circumvented, its business
    would be adversely affected.
        The Company faces intense competition from lower-cost generic
    products.
     21




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The Company faces intense competition from new products.
    The Company faces pricing pressure with respect to its
    products.
      The Company may experience difficulties and delays in the
    manufacturing of its products.
    Pharmaceutical products can develop unexpected safety or
    efficacy concerns.
  and/or
  The Company has no product liability insurance for products
    first sold after August 1, 2004.
    Changes in laws and regulations could adversely affect the
    Companys business.
   Cautionary
    Factors that May Affect Future Results    22




---



##### Table of Contents




    Significant litigation related to Vioxx, including
    whether the Settlement Agreement will be consummated.
    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 drug
    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.
    Economic factors over which the Company has no control,
    including changes in inflation, interest rates and foreign
    currency exchange rates.   23




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##### Table of Contents



Item 1B.  Unresolved
    Staff Comments.    Item 2.
    Properties.        Item 3.
    Legal
    Proceedings.    VioxxLitigation
  Product
    Liability Lawsuits
 and/or Vioxx Vioxx and/or Vioxx
  Vioxx
   24




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##### Table of Contents



Vioxx
  Vioxx Vioxx
  www.merck.com Vioxx Vioxx
       25




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##### Table of Contents



Vioxx www.merck.com
  Vioxx
  Vioxx
      Vioxx
      Vioxx Vioxx
 26




---



##### Table of Contents



Vioxx
      Vioxx
  Vioxx Vioxx Vioxx
 27




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##### Table of Contents



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 and March 12, 2007


Humeston


New Jersey


Verdict for Merck, then judge set aside the verdict, ordering a
    new trial, which resulted in a verdict for Plaintiff.


In the 2005 trial, the jury found for Merck.  In August 2006, the Court set aside the verdict, and ordered a new trial for January 2007.At the conclusion of the 2007 trial, the jury awarded Plaintiff a total of $47.5 million in damages. The jury also awarded Plaintiff the nominal sum of $36.00 on their Consumer Fraud Act claim. Merck has moved for a judgment notwithstanding the verdict, a reduced
verdict amount, and for a new trial. These motions are still pending.Dec. 12, 2005 and Feb. 17, 2006


Plunkett


Federal


Verdict for Merck, judge then set aside the verdict


Merck prevailed in the February 2006 retrial. The Court set
    aside the February 2006 verdict in May 2007. No date has been
    set for a new trial.April 5, 2006


McDarby


N.J.


Verdict for Plaintiff


Plaintiff was awarded $13.5 million in damages. In June 2007,
    the Court awarded Plaintiffs in this and the Cona claim
    tried with it approximately $4 million in attorneys fees
    and costs.  Merck has appealed the judgment including the award
    of attorneys fees and costs.April 5, 2006


Cona


N.J.


Verdict for Merck on failure to warn claim


The jury found for Merck on the failure to warn claim.  The jury
    awarded Plaintiff the nominal sum of $135.00 for his Consumer
    Fraud Act claim. In June 2007, the Court awarded Plaintiffs in
    this and the McDarby claim tried with it approximately $4
    million in attorneys fees and costs.  Merck has appealed
    the judgment including the award of attorneys fees and
    costs.April 21, 2006


Garza


Texas


Verdict for Plaintiff


Judge reduced $32 million jury award to $8.7 million plus
    interest. Merck filed an appeal on March 20, 2007. 28




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##### Table of Contents



State orFederalVerdict Date


Plaintiff


Court


Result


CommentsJuly 13, 2006


Doherty


N.J.


Verdict for Merck


The Court denied the motion for new trial without prejudice
    pending Plaintiffs entry into the Settlement Program.Aug. 2, 2006


Grossberg


California


Verdict for Merck


Plaintiffs motion for a new trial was denied, and his
    subsequent appeal was dismissed.Aug. 17, 2006


Barnett


Federal


Verdict for Plaintiff


Jury awarded Plaintiff $51 million in damages. The judge ruled
    the award was grossly excessive, and reduced the
    award to $1.6 million. Merck has appealed the Judgment to the
    Court of Appeals.Sept. 26, 2006


Smith


Federal


Verdict for MerckNov. 15, 2006


Mason


Federal


Verdict for MerckDec. 13, 2006


Dedrick


Federal


Verdict for Merck


Plaintiffs motion for a new trial was denied in May 2007.Dec. 15, 2006


Albright


Alabama


Verdict for Merck


Plaintiff appealed in July 2007 to the Alabama Supreme Court,
    but in December 2007, Plaintiff agreed to stay his appeal
    pending his entry into the Settlement Program.Jan. 18, 2007


Arrigale/Appell


California


Mistrial declared after the jury deadlocked


Jury failed to return verdicts in cases filed by two Plaintiffs
    who alleged Vioxx contributed to their heart attacks.
    These cases are now stayed.March 2, 2007


Hermans


New Jersey


Verdict for Merck on the failure to warn claim


The jury found for Merck on the failure to warn claim. The
    parties submitted the Consumer Fraud Act claim to the Court for
    resolution. This remains pending but subject to the stay.March 27, 2007


Schwaller


Illinois


Verdict for Merck


Plaintiff moved for a new trial.  On December 11, 2007, Judge
    Stack signed a consent order staying all post-trial activity in
    the case until March 2008.Oct. 5, 2007


Kozic


Florida


Verdict for Merck


In December 2007, Plaintiff filed an appeal but agreed to an
    order staying all other post-trial activity pending his entry
    into the Settlement Program.   Other
    Lawsuits
 Vioxx Vioxx Vioxx
 29




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Vioxx
  Vioxx Vioxx Vioxx and/or and/or Vioxx
  Shareholder
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx
 30




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Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx and/or
  Vioxx Vioxx
  International
    Lawsuits
 Vioxx Vioxx
  Additional
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx and/or
  Insurance
 Vioxx
 31




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##### Table of Contents



Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx
  Investigations
 Vioxx. Vioxx Vioxx Vioxx and/or
  Vioxx
  Vioxx
  Reserves
 Vioxx
 32




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##### Table of Contents



Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
   33




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Other
    Product Liability Litigation
  Fosamax Fosamax and/or Fosamax Fosamax Fosamax Fosamax and/or Fosamax
  Fosamax Fosamax Fosamax Fosamax Fosamax Fosamax
  Commercial
    Litigation
    Pepcid
 34




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##### Table of Contents



Vytorin Vytorin Zetia Vytorin Zetia
  Governmental
    Proceedings
  Pepcid
    Mevacor Vioxx Zocor
 35




---



##### Table of Contents



Pepcid
        Vaccine
    Litigation
  and/or M-M-R
    and/or M-M-R
 36




---



##### Table of Contents



M-M-R M-M-R M-M-R
  Patent
    Litigation
  Fosamax,
    Propecia, Prilosec, Nexium, Singulair, Trusopt, Cosopt Primaxin Prilosec Nexium Zetia Prilosec. Fosamax Propecia Trusopt Singulair Cosopt Primaxin Prilosec Nexium Zetia
  Zetia Zetia Zetia
  Primaxin
  Singulair
  Fosamax Fosamax Fosamax Plus D
 37




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##### Table of Contents



Fosamax Fosamax Plus D
        Trusopt Cosopt Trusopt Cosopt, Trusopt Cosopt Cosopt
    Nexium Nexium
  Cozaar
 38




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##### Table of Contents



Other
    Litigation
           39




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##### Table of Contents



Environmental
    Matters
  de minimis
  on-site
    Item 4.
    Submission
    of Matters to a Vote of Security Holders.     40




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##### Table of Contents



Executive
    Officers of the Registrant (ages as of February 1,
    2008)
                                             41




---



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Vioxx
 42




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##### Table of Contents



43




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44




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##### Table of Contents



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 Q2007

$
1.52


$
0.38


$
0.38


$
0.38


$
0.382006

$
1.52


$
0.38


$
0.38


$
0.38


$
0.38   Common
    Stock Market Prices
  2007

4th Q


3rd Q


2nd Q


1st QHigh

$
61.62


$
53.81


$
55.14


$
46.55Low

$
51.44


$
48.11


$
44.52


$
42.352006High

$
46.37


$
42.51


$
36.84


$
36.65Low

$
41.24


$
35.00


$
32.75


$
31.81     Equity
    Compensation Plan Information
    Number ofsecuritiesNumber of





remaining availablesecurities to be





for future issuanceissued upon


Weighted-average


under equityexercise of


exercise price of


compensation plansoutstanding


outstanding


(excludingoptions, warrants


options, warrants


securitiesand rights


and rights


reflected in column (a))Plan Category

(a)


(b)


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


242,047,383
(2)

$
53.60



149,753,161Equity compensation plans not approved by security
    holders(3)


-



-



-Total


242,047,383


$
53.60



149,753,161     (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 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 5,423,259 shares of restricted
    stock units and 2,813,690 performance share units (assuming
    maximum payouts) under the 2004 and 2007 Incentive Stock Plans.
    Also excludes 228,987 shares of phantom stock deferred
    under the Merck & Co., Inc. Deferral 45




---



##### Table of Contents



Program. As of December 31,
    2006, no additional shares were reserved under the Deferral
    Program. Beginning January 1, 2007, 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 (2,679,958 as of December 31,
    2007). 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 and Incentive Stock
    Option Plan; Provantage Health Services, Inc. 1999 Stock
    Incentive Plan; Rosetta Inpharmatics, Inc. 1997 and 2000
    Employee Stock Option Plans. A total of 966,738 shares of
    Merck Common Stock may be purchased under the Assumed Plans, at
    a weighted average exercise price of $19.99. No further grants
    may be made under any Assumed Plans. 46




---



##### Table of Contents



Performance
    Graph
    Comparison
    of Five-Year Cumulative Total
    Return * Merck &
    Co., Inc., Dow Jones US Pharmaceutical Index and S&P 500
    Index
  End of

2007/2002Period Value

CAGR**MERCK

$
131



6
%DJUSPR


118



3S&P 500


183



13   
  2002


2003


2004


2005


2006


2007MERCK



100.00




88.65




64.15




66.75




95.24




130.80DJUSPR



100.00




109.45




100.39




98.73




112.93




117.98S&P 500



100.00




128.67




142.65




149.65




173.27




182.78   *
    
    Assumes that the value of the
    investment in Company Common Stock and each index was $100 on
    December 31, 2002 and that all dividends were
    reinvested.  **
    
    Compound Annual Growth
    Rate 47




---



##### Table of Contents



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, 2007

0

$N/A

0

$
5,952.8November 1 
    November 30, 2007

4,407,000

$57.74

4,407,000

$
5,698.4December 1  
    December 31, 2007

10,099,600

$59.47

10,099,600

$
5,097.7Total

14,506,600

$58.95

14,506,600

$
5,097.7   (1)
    
    These share repurchases were
    made as part of a plan announced in July 2002 to purchase
    $10 billion in Merck shares. 48




---



##### Table of Contents



Item 6.
    Selected
    Financial Data.    Merck &
    Co., Inc. and Subsidiaries
 ($ in millions except per share amounts)
  2007(1)


2006(2)


2005(3)


2004(4)


2003(5)Results for Year:Sales

$
24,197.7


$
22,636.0


$
22,011.9


$
22,972.8


$
22,567.8Materials and production costs


6,140.7



6,001.1



5,149.6



4,965.7



4,443.7Marketing and administrative expenses


7,556.7



8,165.4



7,155.5



7,238.7



6,200.3Research and development expenses


4,882.8



4,782.9



3,848.0



4,010.2



3,279.9Restructuring costs


327.1



142.3



322.2



107.6



194.6Equity income from affiliates


(2,976.5
)


(2,294.4
)


(1,717.1
)


(1,008.2
)


(474.2
)U.S. Vioxx Settlement Agreement charge


4,850.0



-



-



-



-Other (income) expense, net


46.2



(382.7
)


(110.2
)


(344.0
)


(203.2
)Income from continuing operations before taxes


3,370.7



6,221.4



7,363.9



8,002.8



9,126.7Taxes on income


95.3



1,787.6



2,732.6



2,172.7



2,492.7Income from continuing operations


3,275.4



4,433.8



4,631.3



5,830.1



6,634.0Income from discontinued operations, net of taxes


-



-



-



-



241.3Net income


3,275.4



4,433.8



4,631.3



5,830.1



6,875.3Basic earnings per common shareContinuing operations


$1.51



$2.04



$2.11



$2.63



$2.97Discontinued operations


-



-



-



-



0.11Net income


$1.51



$2.04



$2.11



$2.63



$3.07
(6)Earnings per common share assuming dilutionContinuing operations


$1.49



$2.03



$2.10



$2.62



$2.94Discontinued operations


-



-



-



-



0.11Net income


$1.49



$2.03



$2.10



$2.62



$3.05Cash dividends declared


3,310.7



3,318.7



3,338.7



3,329.1



3,264.7Cash dividends paid per common share


$1.52



$1.52



$1.52



$1.49



$1.45Capital expenditures


1,011.0



980.2



1,402.7



1,726.1



1,915.9Depreciation


1,752.4



2,098.1



1,544.2



1,258.7



1,129.6Year-End Position:Working capital

$
2,787.2


$
2,507.5


$
7,806.9


$
1,688.8


$
1,926.9Property, plant and equipment, net


12,346.0



13,194.1



14,398.2



14,713.7



14,169.0Total assets


48,350.7



44,569.8



44,845.8



42,572.8



40,587.5Long-term debt


3,915.8



5,551.0



5,125.6



4,691.5



5,096.0Stockholders equity


18,184.7



17,559.7



17,977.7



17,349.3



15,620.8Financial Ratios:Income from continuing operations as a % of sales


13.5
%


19.6
%


21.0
%


25.4
%


29.4
%Net income as a % of average total assets


7.0
%


9.9
%


10.6
%


14.0
%


15.0
%Year-End Statistics:Average common shares outstanding (millions)


2,170.5



2,177.6



2,197.0



2,219.0



2,236.7Average common shares outstanding assuming dilution (millions)


2,192.9



2,187.7



2,200.4



2,226.4



2,253.1Number of stockholders of record


173,000



184,200



198,200



216,100



233,000Number of employees


59,800



60,000



61,500



62,600



63,200   (1)
    Amounts for 2007 include the
    impact of the U.S.Vioxx
    Settlement Agreement charge, restructuring actions, a civil
    governmental investigations charge, an insurance arbitration
    settlement gain, acquired research expense resulting from an
    acquisition, additionalVioxx legal defense costs, gains
    on sales of assets and product divestitures, as well as a net
    gain on the settlements of certain patent disputes.(2)
    Amounts for 2006 include the
    impact of restructuring actions, acquired research expenses
    resulting from acquisitions, additionalVioxx legal defense
    costs and the adoption of a new accounting standard requiring
    the expensing of 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. 49




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Description
    of Mercks Business
    Overview
    Gardasil, Januvia, RotaTeq Zocor Proscar
  Janumet Januvia Isentress, first-in-class Emend Cordaptive Gardasil Isentress
   50




---



##### Table of Contents



Vioxx Vioxx
    Vioxx Vioxx Vioxx
  Competition
    and the Health Care Environment
     51




---



##### Table of Contents



Stocrin Crixivan, Stocrin
  Stocrin Stocrin Stocrin Stocrin Stocrin Stocrin
 52




---



##### Table of Contents



Acquisitions
         53




---



##### Table of Contents



Operating
    Results
  Sales
 Gardasil Varivax RotaTeq Zostavax Singulair Januvia Janumet Cozaar/Hyzaar and/or Zocor Proscar Zocor Proscar Fosamax Fosamax Plus D Fosamax,
  Singulair Januvia Zocor Proscar Fosamax
  Singulair Cozaar/Hyzaar Zocor Proscar
 54




---



##### Table of Contents



(1)
  ($ in millions)

2007


2006


2005Singulair

$
4,266.3


$
3,579.0


$
2,975.6Cozaar/Hyzaar


3,350.1



3,163.1



3,037.2Fosamax


3,049.0



3,134.4



3,191.2Zocor


876.5



2,802.7



4,381.7Cosopt/Trusopt


786.8



697.1



617.2Primaxin


763.5



704.8



739.6Januvia


667.5



42.9



-Cancidas


536.9



529.8



570.0Vasotec/Vaseretic


494.6



547.2



623.1Maxalt


467.3



406.4



348.4Proscar


411.0



618.5



741.4Propecia


405.4



351.8



291.9Arcoxia


329.1



265.4



218.2Crixivan/Stocrin


310.2



327.3



348.4Emend


204.2



130.8



87.0Invanz


190.2



139.2



93.7Janumet


86.4



-



-Other pharmaceutical
    (2)


2,465.9



2,780.5



2,295.119,660.9



20,220.9



20,559.7Vaccines:
    (3)Gardasil


1,480.6



234.8



-RotaTeq


524.7



163.4



-Zostavax


236.0



38.6



-ProQuad/M-M-R II/Varivax


1,347.1



820.1



597.4Hepatitis vaccines


279.9



248.5



194.5Other vaccines


409.9



354.0



311.44,278.2



1,859.4



1,103.3Other
    (4)


258.6



555.7



348.9$
24,197.7


$
22,636.0


$
22,011.9   (1)
    Presented net of discounts and returns.(2)
    Other pharmaceutical primarily includes sales of other human
    pharmaceutical products and revenue from the Companys
    relationship with AZLP primarily relating to sales ofNexium, as well asPrilosec. Revenue from AZLP was
    $1.7 billion, $1.8 billion and $1.7 billion in
    2007, 2006 and 2005, respectively. In 2006, other pharmaceutical
    also reflected certain supply sales, including supply sales
    associated with the Companys arrangement with
    Dr. Reddys for the sale of generic simvastatin.(3)
    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.(4)
    Other primarily includes other human and animal health joint
    venture supply sales and other miscellaneous revenues.  Singulair Cozaar, Hyzaar, Vasotec Vaseretic and/or Fosamax Fosamax Plus D Fosavance Fosamac Fosamax Zocor, Cosopt Trusopt,
 55




---



##### Table of Contents



Primaxin Cancidas Januvia Janumet, Maxalt, Proscar Propecia Arcoxia, Crixivan Stocrin, Emend, Invanz,
  Gardasil RotaTeq, Zostavax, Varivax ProQuad, M-M-R
  Segment
    Revenues
 ($ in millions)

2007


2006


2005Pharmaceutical segment revenues

$
20,101.5


$
20,374.8


$
20,678.8Vaccines segment
    revenues(1)


3,837.6



1,705.5



984.2Other segment
    revenues(2)


162.0



162.1



161.8Other
    revenues(3)


96.6



393.6



187.1Total revenues

$
24,197.7


$
22,636.0


$
22,011.9   (1)
    In accordance with segment reporting requirements, Vaccines
    segment revenues exclude $440.6 million,
    $153.9 million and $119.1 million in 2007, 2006 and
    2005, 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 Januvia Janumet.
  Singulair Singulair Singulair Singulair Singulair
  Cozaar Hyzaar Cozaar Cozaar Hyzaar
  Fosamax Fosamax Plus D Fosamax Fosamax Fosamax Plus D Fosamax Fosamax Plus D Fosamax Fosamax Plus D
 56




---



##### Table of Contents



Zocor Zocor
  Zocor Vytorin
  Januvia Januvia Januvia Januvia
  Januvia Januvia
  Janumet Januvia Janumet Janumet Janumet
  Isentress Isentress Isentress Isentress, Isentress Isentress Isentress Isentress
  Cosopt Emend Arcoxia Maxalt
 57




---



##### Table of Contents



Primaxin, Propecia Invanz
  Trusopt Cosopt
  Proscar Proscar Proscar Propecia Propecia
  Arcoxia Arcoxia benefit-to-risk Arcoxia Arcoxia Arcoxia
  over-the-counter Mevacor Mevacor Mevacor over-the-counter Mevacor
  Vaccines
    Segment Revenues
 non-U.S. subsidiaries,
  Gardasil, Varivax RotaTeq Zostavax
  Gardasil Gardasil . Gardasil Gardasil 26-year-old Gardasil Gardasil Gardasil
 58




---



##### Table of Contents



Gardasil Gardasil 10-year-old Gardasil Morbidity and Mortality Weekly Report,
  Gardasil
  Gardasil Gardasil
  Gardasil
  RotaTeq RotaTeq RotaTeq
  RotaTeq RotaTeq RotaTeq
  Gardasil RotaTeq U.S.-based
  ProQuad M-M-R Varivax ProQuad Varivax Varivax
  Zostavax, Zostavax
  Haemophilus influenzae PedvaxHIB
 59




---



##### Table of Contents



Haemophilus influenzae Comvax
  Vaqta, Vaqta Vaqta Vaqta Vaqta Vaqta Vaqta
  Costs,
    Expenses and Other
  ($ in millions)

2007


Change


2006


Change


2005Materials and production

$
6,140.7



2
%

$
6,001.1



17
%

$
5,149.6Marketing and administrative


7,556.7



−7
%


8,165.4



14
%


7,155.5Research and development


4,882.8



2
%


4,782.9



24
%


3,848.0Restructuring costs


327.1



*



142.3



−56
%


322.2Equity income from affiliates


(2,976.5
)


30
%


(2,294.4
)


34
%


(1,717.1
)U.S. Vioxx Settlement Agreement charge


4,850.0



-



-



-



-Other (income) expense, net


46.2



*



(382.7
)



*


(110.2
)$
20,827.0



27
%

$
16,414.6



12
%

$
14,648.0  *
    
    100% or greater.  Materials
    and Production
   Share-Based
    Payment
  Zocor
 60




---



##### Table of Contents



Marketing
    and Administrative
 Vioxx Vioxx Vioxx Fosamax
  Vioxx Fosamax Januvia
  Research
    and Development
   Janumet Isentress.
  Emend Emend Emend three-day Emend IVEmend
  Cordaptive Cordaptive Cordaptive
  Cordaptive Cordaptive Cordaptive Cordaptive Cordaptive
 61




---



##### Table of Contents



Cordaptive) Cordaptive Cordaptive
             62




---



##### Table of Contents



A-1
      Stocrin
    ex-U.S. development
 63




---



##### Table of Contents



(MK-2866),
   64




---



##### Table of Contents



Share-Based
    Compensation
   Restructuring
    Costs
   Equity
    Income from Affiliates
 Vytorin Zetia
  U.S. VioxxSettlement Agreement Charge
 Vioxx
  Other
    (Income) Expense, Net
  65




---



##### Table of Contents



Segment
    Profits
 ($ in millions)

2007


2006


2005Pharmaceutical segment profits

$
14,076.7


$
13,649.4


$
13,157.9Vaccines segment profits


2,605.0



892.8



767.0Other segment profits


452.7



380.7



355.5Other


(13,763.7
)


(8,701.5
)


(6,916.5
)Income before income taxes

$
3,370.7


$
6,221.4


$
7,363.9   Vioxx
  Zocor Proscar
  Varivax
  Taxes on
    Income
 Vioxx
  Net
    Income and Earnings per Share
  ($ in millions except per share
    amounts)

2007


Change

2006


Change

2005Net income

$
3,275.4


−26%

$
4,433.8


−4%

$
4,631.3As a % of sales


13.5
%




19.6
%




21.0
%As a % of average total assets


7.0
%




9.9
%




10.6
%Earnings per common share assuming dilution

$
1.49


−27%

$
2.03


−3%

$
2.10   Net
    Income and Earnings per Common Share
 Vioxx Vioxx
 66




---



##### Table of Contents



Singulair Januvia
  Selected
    Joint Venture and Affiliate Information
    Merck/Schering-Plough
    Partnership
 Zetia Ezetrol Zetia Zocor Vytorin Inegy
  Zetia Vytorin Zetia direct-to-consumer out-of-pocket
    ($ in millions)

2007


2006


2005Vytorin

$
2,779.1


$
1,955.3


$
1,028.3Zetia


2,407.1



1,928.8



1,396.7$
5,186.2


$
3,884.1


$
2,425.0   Vytorin Vytorin Zetia
   67




---



##### Table of Contents



Vytorin Vytorin Vytorin
  Vytorin Vytorin Zetia Vytorin Zetia
  Vytorin Zetia
  Singulair
   68




---



##### Table of Contents



AstraZeneca
    LP
 Prilosec
    Nexium, Prilosec
  Nexium Prilosec Nexium Prilosec Nexium Prilosec true-up
  true-up True-Up True-Up true-up
  True-Up True-Up
 69




---



##### Table of Contents



Merial
    Limited
     ($ in millions)

2007


2006


2005Fipronil products

$
1,033.3


$
886.9


$
757.7Biological products


674.9



600.7



533.2Avermectin products


478.4



468.7



467.5Other products


262.2



238.4



228.6$
2,448.8


$
2,194.7


$
1,987.0   Sanofi
    Pasteur MSD
   Gardasil RotaTeq Zostavax
    ($ in millions)

2007


2006


2005Viral vaccines

$
86.8


$
100.1


$
78.5Hepatitis vaccines


72.9



70.9



81.1Gardasil


476.0



7.5



-Other vaccines


802.3



735.4



705.5$
1,438.0


$
913.9


$
865.1   Johnson &
    Johnson°Merck Consumer Pharmaceuticals Company
 over-the-counter
    ($ in millions)

2007


2006


2005Gastrointestinal products

$
218.5


$
250.9


$
250.8Other products


1.2



1.7



2.5$
219.7


$
252.6


$
253.3  70




---



##### Table of Contents



Capital
    Expenditures
      Analysis
    of Liquidity and Capital Resources
    Selected
    Data
  ($ in millions)

2007


2006


2005Working capital

$
2,787.2


$
2,507.5


$
7,806.9Total debt to total liabilities and equity


11.9
%


15.3
%


18.1
%Cash provided by operations to total debt


1.2:1



1.0:1



0.9:1         Vioxx
 71




---



##### Table of Contents



72




---



##### Table of Contents



Payments
    Due by Period
  ($ in millions)

Total


2008


2009 - 2010


2011 -2012


ThereafterPurchase obligations

$
776.7


$
336.0


$
377.3


$
17.6


$
45.8Loans payable and current portion of long-term debt


1,823.6



1,823.6



-



-



-Long-term debt


3,915.8



-



120.7



432.6



3,362.5U.S. VioxxSettlement Agreement
    (1)


4,850.0



1,600.0



3,250.0



-



-Civil governmental investigations resolution


671.0



671.0



-



-



-Unrecognized tax benefits
    (2)


50.0



50.0



-



-



-Operating leases


157.6



43.1



62.6



34.9



17.0$
12,244.7


$
4,523.7


$
3,810.6


$
485.1


$
3,425.3   (1)
    Payments under the U.S.Vioxx Settlement Agreement are
    contingent upon participation conditions being met or waived.
    Also, the timing of such payments may vary depending on the
    timing of the claims assessment process.(2)
    As of December 31, 2007, the Companys Consolidated
    Balance Sheet reflects a liability for unrecognized tax benefits
    of $3.69 billion, including $50.0 million reflected as
    a current liability. Due to the high degree of uncertainty
    regarding the timing of future cash outflows of liabilities for
    unrecognized tax benefits beyond one year, a reasonable estimate
    of the period of cash settlement for years beyond 2008 can not
    be made.      5-year
     73




---



##### Table of Contents



Financial
    Instruments Market Risk Disclosures
  Foreign
    Currency Risk Management
     available-for-sale
 74




---



##### Table of Contents



Interest
    Rate Risk Management
     Critical
    Accounting Policies and Other Matters
    Revenue
    Recognition
  75




---



##### Table of Contents



point-of-sale
  mark-up
  first-in,
      ($ in millions)

2007


2006Balance, January 1

$
757.1


$
1,166.5Current provision


2,109.7



3,519.4Adjustments to prior years


(14.1
)


(29.5
)Payments


(2,153.3
)


(3,899.3
)Balance, December 31

$
699.4


$
757.1     over-the-counter
   76




---



##### Table of Contents



Inventories
    Produced in Preparation for Product Launches
   Contingencies
    and Environmental Liabilities
   Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
 77




---



##### Table of Contents



Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Fosamax Fosamax Fosamax Fosamax Fosamax Fosamax
     78




---



##### Table of Contents



and/or
    Share-Based
    Compensation
   Pensions
    and Other Postretirement Benefit Plans
        79




---



##### Table of Contents



Acquisitions
 Business Combinations
    Impairments
    of Long-Lived Assets
   Accounting for the
 80




---



##### Table of Contents



Impairments or Disposal of Long-Lived Assets
  Goodwill and Other
    Intangible Assets,
  Impairments
    of Investments
   Taxes on
    Income
 Accounting for Uncertainty in Income
    Taxes  an interpretation of FASB Statement
    No. 109,
     81




---



##### Table of Contents



Recently
    Issued Accounting Standards
  Fair Value Measurements 157-2 FSP 157-2
  The Fair Value Option for Financial
    Assets and Financial Liabilities  including an
    amendment of FASB Statement No. 115 ,
  No. 07-3, Accounting for Advance Payments for Goods or Services
    Received for Use in Future Research and Development Activities 07-3), 07-3 07-3 07-3
  Business Combinations Noncontrolling Interests in Consolidated
    Financial Statements  an amendment of ARB
    No. 51
  Cautionary
    Factors That May Affect Future Results
   82




---



##### Table of Contents



Forms 10-K, 10-Q 8-K. Form 10-K
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk.   83




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data.  (a)
    Financial
    Statements    Consolidated
    Statement of Income
  Years Ended December 31
 ($ in millions except per share amounts)
  2007


2006


2005Sales


$24,197.7



$22,636.0



$22,011.9Costs, Expenses and OtherMaterials and production


6,140.7



6,001.1



5,149.6Marketing and administrative


7,556.7



8,165.4



7,155.5Research and development


4,882.8



4,782.9



3,848.0Restructuring costs


327.1



142.3



322.2Equity income from affiliates


(2,976.5
)


(2,294.4
)


(1,717.1
)U.S. VioxxSettlement Agreement charge


4,850.0



-



-Other (income) expense, net


46.2



(382.7
)


(110.2
)20,827.0



16,414.6



14,648.0Income Before Taxes


3,370.7



6,221.4



7,363.9Taxes on Income


95.3



1,787.6



2,732.6Net Income


$3,275.4



$4,433.8



$4,631.3Basic Earnings per Common Share


$1.51



$2.04



$2.11Earnings per Common Share Assuming Dilution


$1.49



$2.03



$2.10   Consolidated
    Statement of Retained Earnings
  Years Ended December 31
 ($ in millions)
  2007


2006


2005Balance, January 1

$
39,095.1


$
37,980.0


$
36,687.4Cumulative Effect of Adoption of FIN 48


81.0



-



-Net Income


3,275.4



4,433.8



4,631.3Dividends Declared on Common Stock


(3,310.7
)


(3,318.7
)


(3,338.7
)Balance, December 31

$
39,140.8


$
39,095.1


$
37,980.0   Consolidated
    Statement of Comprehensive Income
  Years Ended December 31
 ($ in millions)
  2007


2006


2005Net Income

$
3,275.4


$
4,433.8


$
4,631.3Other Comprehensive IncomeNet unrealized (loss) gain on derivatives, net of tax and net
    income realization


(4.4
)


(50.9
)


81.3Net unrealized gain on investments, net of tax and net income
    realization


58.0



26.1



50.3Benefit plan net gain (loss) and prior service cost (credit),
    net of tax and amortization


240.3



-



-Minimum pension liability, net of tax


-



22.5



(7.0
)Cumulative translation adjustment relating to equity investees,
    net of tax


44.3



18.9



(26.4
)338.2



16.6



98.2Comprehensive Income

$
3,613.6


$
4,450.4


$
4,729.5   The accompanying notes are an integral part of these
    consolidated financial statements.
 84




---



##### Table of Contents



Consolidated
    Balance Sheet
  December 31
 ($ in millions)
  2007


2006AssetsCurrent AssetsCash and cash equivalents

$
5,336.1


$
5,914.7Short-term investments


2,894.7



2,798.3Accounts receivable


3,636.2



3,314.8Inventories (excludes inventories of $345.2 in 2007 and $416.1 in2006 classified in Other assets  see Note 6)


1,881.0



1,769.4Prepaid expenses and taxes


1,297.4



1,433.0Total current assets


15,045.4



15,230.2Investments


7,159.2



7,788.2Property, Plant and Equipment (at cost)Land


405.8



408.9Buildings


10,048.0



9,745.9Machinery, equipment and office furnishings


13,553.7



13,172.4Construction in progress


795.6



882.324,803.1



24,209.5Less allowance for depreciation


12,457.1



11,015.412,346.0



13,194.1Goodwill


1,454.8



1,431.6Other Intangibles, Net


713.2



943.9Other Assets


11,632.1



5,981.8$
48,350.7


$
44,569.8Liabilities and Stockholders EquityCurrent LiabilitiesLoans payable and current portion of long-term debt

$
1,823.6


$
1,285.1Trade accounts payable


624.5



496.6Accrued and other current liabilities


8,534.9



6,653.3Income taxes payable


444.1



3,460.8Dividends payable


831.1



826.9Total current liabilities


12,258.2



12,722.7Long-Term Debt


3,915.8



5,551.0Deferred Income Taxes and Noncurrent Liabilities


11,585.3



6,330.3Minority Interests


2,406.7



2,406.1Stockholders EquityCommon stock, one cent par valueAuthorized  5,400,000,000 sharesIssued   2,983,508,675 shares 
    2007
                
    2,976,223,337 shares  2006


29.8



29.8Other paid-in capital


8,014.9



7,166.5Retained earnings


39,140.8



39,095.1Accumulated other comprehensive loss


(826.1
)


(1,164.3
)46,359.4



45,127.1Less treasury stock, at cost811,005,791 shares  2007808,437,892 shares  2006


28,174.7



27,567.4Total stockholders equity


18,184.7



17,559.7$
48,350.7


$
44,569.8   The accompanying notes are an integral part of this
    consolidated financial statement.
 85




---



##### Table of Contents



Consolidated
    Statement of Cash Flows
  Years Ended December 31
 ($ in millions)
  2007


2006


2005Cash Flows from Operating ActivitiesNet income

$
3,275.4


$
4,433.8


$
4,631.3Adjustments to reconcile net income to net cash provided by
    operating activities:U.S. VioxxSettlement Agreement charge


4,850.0



-



-Depreciation and amortization


1,988.2



2,268.4



1,708.1Deferred income taxes


(1,781.9
)


(530.2
)


9.0Equity income from affiliates


(2,976.5
)


(2,294.4
)


(1,717.1
)Dividends and distributions from equity affiliates


2,485.6



1,931.9



1,101.2Share-based compensation


330.2



312.5



48.0Acquired research


325.1



762.5



-Taxes paid for Internal Revenue Service settlement


(2,788.1
)


-



-Other


(64.7
)


18.1



647.5Net changes in assets and liabilities:Accounts receivable


(290.7
)


(709.3
)


345.9Inventories


(40.7
)


226.5



125.6Trade accounts payable


117.7



16.4



63.6Accrued and other current liabilities


451.1



461.6



238.2Income taxes payable


987.2



(138.2
)


663.2Noncurrent liabilities


26.2



(125.6
)


(412.2
)Other


105.1



131.2



156.2Net Cash Provided by Operating Activities


6,999.2



6,765.2



7,608.5Cash Flows from Investing ActivitiesCapital expenditures


(1,011.0
)


(980.2
)


(1,402.7
)Purchases of securities and other investments


(10,132.7
)


(19,591.3
)


(125,308.4
)Acquisitions of subsidiaries, net of cash acquired


(1,135.9
)


(404.9
)


-Proceeds from sales of securities and other investments


10,860.2



16,143.8



128,981.4Increase in restricted cash


(1,401.1
)


(48.1
)


-Other


10.5



(3.0
)


(3.1
)Net Cash (Used) Provided by Investing Activities


(2,810.0
)


(4,883.7
)


2,267.2Cash Flows from Financing ActivitiesNet change in short-term borrowings


11.4



(1,522.8
)


1,296.2Proceeds from issuance of debt


-



755.1



1,000.0Payments on debt


(1,195.3
)


(506.2
)


(1,014.9
)Purchases of treasury stock


(1,429.7
)


(1,002.3
)


(1,015.3
)Dividends paid to stockholders


(3,307.3
)


(3,322.6
)


(3,349.8
)Proceeds from exercise of stock options


898.6



369.9



136.5Other


156.2



(375.3
)


(93.1
)Net Cash Used by Financing Activities


(4,866.1
)


(5,604.2
)


(3,040.4
)Effect of Exchange Rate Changes on Cash and Cash Equivalents


98.3



52.1



(128.8
)Net (Decrease) Increase in Cash and Cash Equivalents


(578.6
)


(3,670.6
)


6,706.5Cash and Cash Equivalents at Beginning of Year


5,914.7



9,585.3



2,878.8Cash and Cash Equivalents at End of Year

$
5,336.1


$
5,914.7


$
9,585.3   The accompanying notes are an integral part of this
    consolidated financial statement.
 86




---



##### Table of Contents



Notes to
    Consolidated Financial Statements

Merck & Co., Inc. and Subsidiaries

($ in millions except per share amounts) 1.
    Nature of
    Operations    2.
    Summary
    of Accounting Policies  Principles of Consolidation 
  Foreign Currency Translation 
  Cash Equivalents 
  Inventories  last-in, first-in,
  Investments  available-for-sale held-to-maturity, other-than-temporary
  Revenue Recognition 
 87




---



##### Table of Contents



point-of-sale
  ,
    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 
  Software Capitalization  98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use
  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 
 88




---



##### Table of Contents



Share-Based Compensation  Share-Based Payment Accounting for Stock-Based
    Compensation
  Restructuring Costs  Accounting for Costs Associated with Exit or
    Disposal Activities Accounting for
    the Impairment and Disposal of Long-Lived Assets 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
  Contingencies and Legal Defense Costs  Accounting for
    Contingencies
  Taxes on Income 
  Use of Estimates 
  Reclassifications 
  Recently Issued Accounting Standards  Fair Value
    Measurements The Fair Value Option for Financial Assets and
    Financial Liabilities  including an amendment of FASB
    Statement No. 115 Business Combinations Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51 , No. 07-3, Accounting for Advance Payments for Goods or Services
    Received for Use in Future Research and Development Activities 07-3).
 89




---



##### Table of Contents



157-2, FSP 157-2
    07-03, 07-3 07-3
    3.
    Restructuring  Global
    Restructuring Program
  90




---



##### Table of Contents



Separation


AcceleratedYear Ended December 31,
    2007

Costs


Depreciation


Other


TotalMaterials and production

$
-


$
460.6


$
22.5


$
483.1Research and development


-



-



(0.1
)


(0.1
)Restructuring costs


251.4



-



75.7



327.1$
251.4


$
460.6


$
98.1


$
810.1Year Ended December 31, 2006Materials 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         Other
    Restructuring Programs
  91




---



##### Table of Contents



Separation


AcceleratedCosts(1)


Depreciation


Other


TotalRestructuring reserves as of January 1, 2006

$
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


$
-


$
-


$
177.7Expense

$
251.4


$
460.6


$
98.1


$
810.1(Payments) receipts, net


(197.6
)


-



(59.9
)


(257.5
)Non-cash activity


-



(460.6
)


(38.2
)


(498.8
)Restructuring reserves as of December 31,
    2007(3)

$
231.5


$
-


$
-


$
231.5   (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.(3)
    The cash outlays associated with the remaining restructuring
    reserve are expected to be largely completed by the end of
    2009.    4.
    Research
    Collaborations, Acquisitions and License Agreements    (MK-2866),
   92




---



##### Table of Contents



93




---



##### Table of Contents



,
     94




---



##### Table of Contents



in-silico
      5.
    Financial
    Instruments  Foreign
    Currency Risk Management
    95




---



##### Table of Contents



de minimis
      available-for-sale
    Interest
    Rate Risk Management
  96




---



##### Table of Contents



Fair
    Value of Financial Instruments
   2007


2006Carrying Value


Fair Value


Carrying Value


Fair ValueAssetsCash and cash equivalents

$
5,336.1


$
5,336.1


$
5,914.7


$
5,914.7Short-term investments


2,894.7



2,894.7



2,798.3



2,798.3Long-term investments


7,159.2



7,159.2



7,788.2



7,788.2Purchased currency options


59.9



59.9



43.9



43.9Forward exchange contracts


62.1



62.1



11.1



11.1Interest rate swaps


108.0



108.0



26.3



26.3LiabilitiesLoans payable and current portion oflong-term debt

$
1,823.6


$
1,828.4


$
1,285.1


$
1,284.3Long-term debt


3,915.8



3,986.7



5,551.0



5,612.7Written currency options


8.8



8.8



-



-Forward exchange contracts


35.8



35.8



25.5



25.5   available-for-sale
  2007Carrying


Fair


Gross UnrealizedValue


Value


Gains


LossesCorporate notes and bonds

$
5,465.0


$
5,465.0


$
28.4


$
(20.7
)U.S. Government and agency securities


1,748.4



1,748.4



32.2



(0.1
)Mortgage-backed securities


760.0



760.0



8.9



-Municipal securities


744.6



744.6



13.3



(0.2
)Asset-backed securities


313.2



313.2



1.8



(1.4
)Foreign government bonds


269.9



269.9



0.7



(0.6
)Commercial paper


258.1



258.1



-



-Other debt securities


343.9



343.9



14.5



-Equity securities


150.8



150.8



97.0



(5.5
)$
10,053.9


$
10,053.9


$
196.8


$
(28.5
)  97




---



##### Table of Contents



de minimis
  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
)Mortgage-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
)$
10,586.5


$
10,586.5


$
110.7


$
(12.5
)   Available-for-sale
  AAA-rated
  Concentrations
    of Credit Risk
    98




---



##### Table of Contents



6.
    Inventories    2007


2006Finished goods

$
382.9


$
403.8Raw materials and work in process


1,732.2



1,688.9Supplies


111.1



92.8Total (approximates current cost)


2,226.2



2,185.5Reduction to LIFO costs


-



-$
2,226.2


$
2,185.5Recognized as:Inventories

$
1,881.0


$
1,769.4Other assets

$
345.2


$
416.1     7.
    Other
    Intangibles    2007


2006Patents and product rights

$
1,656.3


$
1,656.3Other


781.0



775.9Total acquired cost

$
2,437.3


$
2,432.2Patents and product rights

$
1,449.4


$
1,321.5Other


274.7



166.8Total accumulated amortization

$
1,724.1


$
1,488.3     8.
    Joint
    Ventures and Other Equity Method Affiliates    Years Ended December
    31

2007


2006


2005Merck/Schering-Plough

$
1,830.8


$
1,218.6


$
570.4AstraZeneca LP


820.1



783.7



833.5Other
    (1)


325.6



292.1



313.2$
2,976.5


$
2,294.4


$
1,717.1   (1)
    Primarily reflects results from Merial Limited, Sanofi
    Pasteur MSD and Johnson & Johnson°Merck Consumer
    Pharmaceuticals Company.  Merck/Schering-Plough
  99




---



##### Table of Contents



Zetia Ezetrol Zetia Zocor Vytorin Inegy
  Merck/Schering-Plough Zetia Vytorin Zetia direct-to-consumer out-of-pocket
  Zetia Vytorin
  Singulair
    Years Ended
    December 31

2007


2006


2005Sales

$
5,186.2


$
3,884.1


$
2,425.0Vytorin


2,779.1



1,955.3



1,028.3Zetia


2,407.1



1,928.8



1,396.7Materials and production costs


216.0



179.0



93.0Other expense, net


1,307.2



1,217.1



1,079.0Income before taxes

$
3,663.0


$
2,488.0


$
1,253.0Mercks share of income before taxes
    (1)

$
1,832.5


$
1,214.5


$
564.5   December 31

2007


2006Total assets
    (2)

$
1,014.0



$430.0Total liabilities
    (2)


656.0



511.0
   (1)
    Mercks share of the MSP Partnerships income
    before taxes differs from the equity income recognized from the
    MSP Partnership primarily due to the timing of recognition of
    certain transactions between the Company and the MSP
    Partnership.(2)
    Amounts are comprised almost entirely of current balances. 100




---



##### Table of Contents



AstraZeneca
    LP
 Prilosec,
    Nexium, Prilosec
  Nexium Prilosec Nexium Prilosec Nexium Prilosec true-up
  true-up true-up True-Up true-up
 101




---



##### Table of Contents



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

2007


2006


2005Sales

$
10,564.0


$
10,393.7


$
9,379.6Materials and production costs


4,710.9



5,129.7



4,534.4Other expense, net


3,085.4



2,824.9



2,839.0Income before taxes


2,767.7



2,439.1



2,006.2   December 31

2007


2006Current assets

$
7,431.5



$7,342.7Noncurrent assets


1,576.5



1,483.6Current liabilities


3,484.5



3,562.9Noncurrent liabilities


280.8



215.6
  102




---



##### Table of Contents



9.
    Loans
    Payable, Long-Term Debt and Other Commitments  18-month,
    2007


20064.75% notes due 2015

$
1,068.1


$
1,017.04.375% notes due 2013


524.4



503.06.4% debentures due 2028


499.3



499.25.75% notes due 2036


497.7



497.65.95% debentures due 2028


497.1



497.05.125% notes due 2011


258.8



249.16.3% debentures due 2026


247.9



247.86.0% Astra note due 2008


-



1,380.0Variable-rate borrowing due 2009


-



300.0Other


322.5



360.3$
3,915.8


$
5,551.0             10.
    Contingencies
    and Environmental Liabilities   103




---



##### Table of Contents



VioxxLitigation
  Product
    Liability Lawsuits
 and/or Vioxx Vioxx and/or Vioxx
  Vioxx
  Vioxx
  Vioxx Vioxx
 104




---



##### Table of Contents



Vioxx Vioxx
          Vioxx
  Vioxx
      Vioxx
 105




---



##### Table of Contents



Vioxx Vioxx
  Vioxx
      Vioxx
 106




---



##### Table of Contents



Vioxx Vioxx Vioxx
  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 and March 12, 2007


Humeston


New Jersey


Verdict for Merck, then judge set aside the verdict, ordering a
    new trial, which resulted in a verdict for Plaintiff.


In the 2005 trial, the jury found for Merck.  In August 2006, the Court set aside the verdict, and ordered a new trial for January 2007.At the conclusion of the 2007 trial, the jury awarded Plaintiff a total of $47.5 million in damages.  The jury also awarded Plaintiff the nominal sum of $36.00 on their Consumer Fraud Act claim.  Merck has moved for a judgment notwithstanding the verdict, a
reduced verdict amount, and for a new trial. These motions are still pending.Dec. 12, 2005 and Feb. 17, 2006


Plunkett


Federal


Verdict for Merck, judge then set aside the verdict


Merck prevailed in the February 2006 retrial.  The Court set
    aside the February 2006 verdict in May 2007. No date has been
    set for a new trial.April 5, 2006


McDarby


N.J.


Verdict for Plaintiff


Plaintiff was awarded $13.5 million in damages. In June 2007,
    the Court awarded Plaintiffs in this and the Cona claim
    tried with it approximately $4 million in attorneys fees
    and costs.  Merck has appealed the judgment including the award
    of attorneys fees and costs. 107




---



##### Table of Contents



State orFederalVerdict Date


Plaintiff


Court


Result


CommentsApril 5, 2006


Cona


N.J.


Verdict for Merck on failure to warn claim


The jury found for Merck on the failure to warn claim.  The jury
    awarded Plaintiff the nominal sum of $135.00 for his Consumer
    Fraud Act claim. In June 2007, the Court awarded Plaintiffs in
    this and the McDarby claim tried with it approximately $4
    million in attorneys fees and costs.  Merck has appealed
    the judgment including the award of attorneys fees and
    costs.April 21, 2006


Garza


Texas


Verdict for Plaintiff


Judge reduced $32 million jury award to $8.7 million plus
    interest. Merck filed an appeal on March 20, 2007.July 13, 2006


Doherty


N.J.


Verdict for Merck


The Court denied the motion for new trial without prejudice
    pending Plaintiffs entry into the Settlement Program.Aug. 2, 2006


Grossberg


California


Verdict for Merck


Plaintiffs motion for a new trial was denied, and his
    subsequent appeal was dismissed.Aug. 17, 2006


Barnett


Federal


Verdict for Plaintiff


Jury awarded Plaintiff $51 million in damages. The judge ruled
    the award was grossly excessive, and reduced the
    award to $1.6 million. Merck has appealed the Judgment to the
    Court of Appeals.Sept. 26, 2006


Smith


Federal


Verdict for MerckNov. 15, 2006


Mason


Federal


Verdict for MerckDec. 13, 2006


Dedrick


Federal


Verdict for Merck


Plaintiffs motion for a new trial was denied in May 2007.Dec. 15, 2006


Albright


Alabama


Verdict for Merck


Plaintiff appealed in July 2007 to the Alabama Supreme Court,
    but in December 2007, Plaintiff agreed to stay his appeal
    pending his entry into the Settlement Program.Jan. 18, 2007


Arrigale/Appell


California


Mistrial declared after the jury deadlocked


Jury failed to return verdicts in cases filed by two Plaintiffs
    who alleged Vioxx contributed to their heart attacks.
    These cases are now stayed.March 2, 2007


Hermans


New Jersey


Verdict for Merck on the failure to warn claim


The jury found for Merck on the failure to warn claim.  The
    parties submitted the Consumer Fraud Act claim to the Court for
    resolution. This remains pending but subject to the stay.March 27, 2007


Schwaller


Illinois


Verdict for Merck


Plaintiff moved for a new trial.  On December 11, 2007, Judge
    Stack signed a consent order staying all post-trial activity in
    the case until March 2008.Oct. 5, 2007


Kozic


Florida


Verdict for Merck


In December 2007, Plaintiff filed an appeal but agreed to an
    order staying all other post-trial activity pending his entry
    into the Settlement Program.  108




---



##### Table of Contents



Other
    Lawsuits
 Vioxx Vioxx Vioxx
  Vioxx
  Vioxx Vioxx Vioxx and/or and/or Vioxx
  Shareholder
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx Vioxx
   109




---



##### Table of Contents



Vioxx Vioxx
    Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx and/or
  Vioxx Vioxx
  International
    Lawsuits
 Vioxx Vioxx
 110




---



##### Table of Contents



Additional
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx and/or
  Insurance
 Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx
  Investigations
 Vioxx. Vioxx Vioxx Vioxx and/or
  Vioxx
 111




---



##### Table of Contents



Vioxx
  Reserves
 Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
 112




---



##### Table of Contents



Vioxx Vioxx Vioxx
    Other
    Product Liability Litigation
  Fosamax Fosamax and/or Fosamax Fosamax Fosamax Fosamax and/or Fosamax
  Fosamax Fosamax Fosamax Fosamax Fosamax Fosamax
  Commercial
    Litigation
   113




---



##### Table of Contents



Pepcid
    Vytorin Vytorin Zetia Vytorin Zetia
  Governmental
    Proceedings
  Pepcid
   114




---



##### Table of Contents



Mevacor Vioxx Zocor
  Pepcid
        Vaccine
    Litigation
  and/or M-M-R
 115




---



##### Table of Contents



and/or M-M-R M-M-R M-M-R M-M-R
  Patent
    Litigation
  Fosamax,
    Propecia, Prilosec, Nexium, Singulair, Trusopt, Cosopt Primaxin Prilosec Nexium Zetia Prilosec. Fosamax Propecia Trusopt Singulair Cosopt Primaxin Prilosec Nexium Zetia
  Zetia Zetia Zetia
 116




---



##### Table of Contents



Primaxin
  Singulair
  Fosamax Fosamax Fosamax Plus D Fosamax Fosamax Plus D
        Trusopt Cosopt Trusopt Cosopt, Trusopt Cosopt Cosopt
    Nexium
 117




---



##### Table of Contents



Nexium
  Cozaar
    Other
    Litigation
         118




---



##### Table of Contents



Environmental
    Matters
  de minimis
   119




---



##### Table of Contents



on-site
      11.
    Stockholders
    Equity      2007


2006


2005Shares


Cost


Shares


Cost


Shares


CostBalance as of January 1


808.4


$
27,567.4



794.3


$
26,984.4



767.6


$
26,191.8Purchases


26.5



1,429.7



26.4



1,002.3



33.2



1,015.3Issuances
    (1)


(23.9
)


(822.4
)


(12.3
)


(419.3
)


(6.5
)


(222.7
)Balance as of December 31


811.0


$
28,174.7



808.4


$
27,567.4



794.3


$
26,984.4   (1)
    
    Issued primarily under stock
    option plans.    12.
    Share-Based
    Compensation Plans     120




---



##### Table of Contents



Transition Election Related to Accounting for the Tax
    Effects of Share-Based Payment Awards
    Years Ended December
    31

2007


2006


2005Pretax share-based compensation expense

$
330.2


$
312.5


$
48.0Income tax benefits


(104.1
)


(98.5
)


(16.8
)Total share-based compensation expense, net of tax

$
226.1


$
214.0


$
31.2     Year Ended December
    31

2005Net income, as reported

$
4,631.3Compensation expense, net of tax:Reported


31.2Fair value method


(357.1
)Pro forma net income

$
4,305.4Earnings per common share:Basic - as reported


$2.11Basic - pro forma


$1.96Assuming dilution - as reported


$2.10Assuming dilution - pro forma


$1.96  121




---



##### Table of Contents



Accounting for Stock
    Appreciation Rights and Other Variable Stock Option or Award
    Plans
      Years Ended December
    31

2007


2006


2005Expected dividend yield


3.4
%


4.2
%


4.8
%Risk-free interest rate


4.4
%


4.6
%


4.0
%Expected volatility


24.6
%


26.5
%


31.7
%Expected life (years)


5.7



5.7



5.7     WeightedWeighted


AverageAverage


Remaining


AggregateNumber


Exercise


Contractual


Intrinsicof Options


Price


Term


ValueBalance at December 31, 2006


255,336.7


$
53.13Granted


35,551.4



45.42Exercised


(22,430.5
)


40.06Forfeited


(25,443.5
)


50.58Outstanding at December 31, 2007


243,014.1


$
53.47



5.05


$
2,102.2Exercisable at December 31, 2007


177,558.8


$
58.14



3.77


$
967.0  122




---



##### Table of Contents



Years Ended December
    31

2007


2006


2005Total intrinsic value of stock options exercised

$
301.2


$
67.3


$
58.8Fair value of stock options vested

$
251.1


$
857.4


$
949.3Cash received from the exercise of stock options

$
898.6


$
369.9


$
136.5     RSUs


PSUsWeighted





WeightedAverage





AverageNumber


Grant Date


Number


Grant Dateof Shares


Fair Value


of Shares


Fair ValueNonvested at December 31, 2006


6,000.6


$
35.85



1,376.8


$
38.59Granted


1,906.5



45.66



588.7



44.19Vested


(2,212.8
)


40.96







Forfeited


(271.0
)


34.96



(558.7
)


46.62Nonvested at December 31, 2007


5,423.3


$
37.26



1,406.8


$
37.75     13.
    Pension
    and Other Postretirement Benefit Plans      Pension Benefits


Other Postretirement BenefitsYears Ended December
    31

2007


2006


2005


2007


2006


2005Service cost

$
377.2


$
363.7


$
338.8


$
90.8


$
91.3


$
87.9Interest cost


379.9



341.3



310.6



107.7



100.1



106.0Expected return on plan assets


(491.4
)


(436.8
)


(400.7
)


(130.5
)


(112.6
)


(103.0
)Net amortization


149.4



169.4



156.1



(16.8
)


1.9



22.0Termination benefits


25.6



29.7



32.0



7.7



3.6



6.5Curtailments


1.1



-



9.1



(16.8
)


(2.6
)


0.7Settlements


5.4



14.7



(4.2
)


-



-



-Net pension and postretirement cost

$
447.2


$
482.0


$
441.7


$
42.1


$
81.7


$
120.1    123




---



##### Table of Contents



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


Other Postretirement Benefits2007


2006


2007


2006Fair value of plan assets at January 1

$
7,056.7


$
6,070.6


$
1,484.2


$
1,277.4Actual return on plan assets


498.4



955.7



95.0



209.9Company contributions


185.3



494.4



44.8



36.5Benefits paid from plan assets


(362.5
)


(468.8
)


(46.4
)


(39.6
)Other


7.5



4.8



-



-Fair value of plan assets at December 31

$
7,385.4


$
7,056.7


$
1,577.6


$
1,484.2Benefit obligation at January 1

$
6,926.8


$
6,523.5


$
1,821.8


$
1,816.6Service cost


377.2



363.7



90.8



91.3Interest cost


379.9



341.3



107.7



100.1Actuarial (gains) losses


(242.9
)


150.7



(12.7
)


(16.0
)Benefits paid


(391.8
)


(502.1
)


(80.1
)


(62.0
)Plan amendments


(20.9
)


11.3



(8.0
)


(111.8
)Curtailments


(5.6
)


(22.7
)


9.6



-Termination benefits


25.6



29.7



7.7



3.6Other


1.1



31.4



-



-Benefit obligation at December 31

$
7,049.4


$
6,926.8


$
1,936.8


$
1,821.8Funded status at December 31

$
336.0


$
129.9


$
(359.2
)

$
(337.6
)Recognized as:Other assets

$
1,132.3


$
915.7


$
387.9


$
376.5Accrued and other current liabilities


(37.3
)


(20.0
)


(3.8
)


(24.6
)Deferred income taxes and noncurrent liabilities


(759.0
)


(765.8
)


(743.3
)


(689.5
)  124




---



##### Table of Contents



OtherPension Benefits


Postretirement BenefitsTarget


2007


2006


Target


2007


2006U.S. equities


40
%


38
%


39
%


55
%


55
%


56%International equities


30
%


34
%


34
%


26
%


29
%


28%Fixed-income investments


25
%


24
%


22
%


17
%


16
%


15%Real estate and other investments


4
%


3
%


4
%


0
%


0
%


0%Cash and cash equivalents


1
%


1
%


1
%


2
%


0
%


1%100
%


100
%


100
%


100
%


100
%


100%         OtherPension


PostretirementBenefits


Benefits2008

$
287.2


$
82.02009


300.0



88.82010


318.7



95.92011


347.2



103.32012


385.2



109.22013 - 2017


2,446.9



667.8        125




---



##### Table of Contents



U.S. Pension and OtherPostretirementPension Plans


Benefit PlansDecember 31

2007


2006


2005


2007


2006


2005Net costDiscount rate


5.35
%


5.15
%


5.40
%


6.00
%


5.75
%


6.00
%(1)Expected rate of return on plan assets


7.65
%


7.65
%


7.65
%


8.75
%


8.75
%


8.75
%Salary growth rate


4.20
%


4.20
%


4.10
%


4.50
%


4.50
%


4.50
%Benefit obligationDiscount rate


5.90
%


5.35
%


5.15
%


6.50
%


6.00
%


5.75
%Salary growth rate


4.30
%


4.20
%


4.20
%


4.50
%


4.50
%


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

2007


2006Health 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


2015



2014     One PercentagePointIncrease


DecreaseEffect on total service and interest cost components

$
35.4


$
(28.2
)Effect on benefit obligation

$
280.3


$
(229.3
)  126




---



##### Table of Contents



14.
    Other
    (Income) Expense, Net  Years Ended December
    31

2007


2006


2005Interest income

$
(741.1
)

$
(764.3
)

$
(480.9
)Interest expense


384.3



375.1



385.5Exchange gains


(54.3
)


(25.0
)


(16.1
)Minority interests


121.4



120.5



121.8Other, net


335.9



(89.0
)


(120.5
)$
46.2


$
(382.7
)

$
(110.2
)     15.
    Taxes on
    Income    2007


2006


2005Amount


Tax Rate


Amount


Tax Rate


Amount


Tax RateU.S. statutory rate applied to income before taxes

$
1,179.8



35.0
%

$
2,177.5



35.0
%

$
2,577.4



35.0
%Differential arising from:Foreign earnings


(1,196.0
)


(35.5
)


(1,024.1
)


(16.5
)


(945.1
)


(12.8
)Tax exemption for Puerto Rico operations


-



-



(87.6
)


(1.4
)


(98.0
)


(1.3
)State taxes


11.6



0.3



129.6



2.1



188.6



2.5Acquired research


113.8



3.4



266.9



4.3



-



-American Jobs Creation Act of 2004


-



-



-



-



766.5



10.4Other(1)


(13.9
)


(0.4
)


325.3



5.2



243.2



3.3$
95.3



2.8
%

$
1,787.6



28.7
%

$
2,732.6



37.1
%  (1)
    Other includes the tax effect of minority interests,
    contingency reserves, research credits, export incentives and
    miscellaneous items.  Vioxx
  Years Ended December
    31

2007


2006


2005Pretax (Loss) IncomeDomestic

$
(2,647.2
)

$
2,124.4


$
3,196.1Foreign


6,017.9



4,097.0



4,167.8$
3,370.7


$
6,221.4


$
7,363.9  127




---



##### Table of Contents



Years Ended December
    31

2007


2006


2005Current provisionFederal

$
988.1


$
1,618.4


$
1,688.1Foreign


687.0



458.3



739.6State


202.2



241.1



295.91,877.3



2,317.8



2,723.6Deferred provisionFederal


(1,671.5
)


(374.1
)


97.0Foreign


157.2



(130.3
)


(134.0
)State


(267.7
)


(25.8
)


46.0(1,782.0
)


(530.2
)


9.0$
95.3


$
1,787.6


$
2,732.6     2007


2006Assets


Liabilities


Assets


LiabilitiesOther intangibles

$
22.6


$
252.3


$
27.3


$
344.1Inventory related


369.9



111.6



455.2



177.7Accelerated depreciation


-



1,096.3



-



1,262.2Advance payment


338.6



-



338.6



-Equity investments


247.8



938.0



142.4



863.8Pensions and other postretirement benefits


323.3



268.0



281.9



188.9Compensation related


374.8



-



249.1



-VioxxLitigation reserve


2,130.0



-



306.8



-Unrecognized tax benefits


980.8



-



-



-Net operating losses


339.5



-



448.4



-Other


1,272.7



382.2



1,404.0



269.2Subtotal


6,400.0



3,048.4



3,653.7



3,105.9Valuation allowance


(94.0
)


-



(101.8
)


-Total deferred taxes

$
6,306.0


$
3,048.4


$
3,551.9


$
3,105.9Net deferred income taxes

$
3,257.6






$
446.0Recognized as:Prepaid expenses and taxes

$
829.5






$
1,177.7Other assets


2,823.7







183.7Income taxes payable





$







$
62.8Deferred income taxes and noncurrent liabilities






395.6







852.6      128




---



##### Table of Contents



Accounting for Uncertainty
    in Income Taxes  an interpretation of FASB Statement
    No. 109,
      2007Balance as of January 1

$
5,008.4Additions related to prior year positions


187.8Reductions for tax positions of prior years


(87.0
)Additions related to current year positions


284.5Settlements


(1,703.5
)Lapse of statute of limitations


(0.7
)Balance as of December 31

$
3,689.5            129




---



##### Table of Contents



16.
    Earnings
    per Share    Years Ended December
    31

2007


2006


2005Average common shares outstanding


2,170.5



2,177.6



2,197.0Common shares issuable
    (1)


22.4



10.1



3.4Average common shares outstanding assuming dilution


2,192.9



2,187.7



2,200.4  (1)
    Issuable primarily under share-based compensation plans.   130




---



##### Table of Contents



17.
    Comprehensive
    Income    Pretax(1)


Tax


After TaxYear Ended December 31, 2007Net unrealized loss on derivatives

$
(50.5
)

$
20.7


$
(29.8
)Net loss realization


43.0



(17.6
)


25.4Derivatives


(7.5
)


3.1



(4.4
)Net unrealized gain on investments


106.2



(24.5
)


81.7Net gain realization


(36.1
)


12.4



(23.7
)Investments


70.1



(12.1
)


58.0Benefit plan net gain (loss) and prior service cost (credit)
    arising during the period


252.8
(2)


(95.9
)


156.9Net loss and prior service cost (credit) amortization
    included in net periodic benefit cost


134.6
(3)


(51.2
)


83.4Benefit plans


387.4



(147.1
)


240.3Cumulative translation adjustment related to equity
    investees


34.4



9.9



44.3$
484.4


$
(146.2
)

$
338.2Year 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   (1)
    
    Net of applicable minority
    interest.(2)
    
    Pretax net gain (loss) and prior
    service cost (credit) arising during the period were
    $269.1 million and $21.4 million, respectively, for
    pension plans and were $(16.5) million and
    $(21.2) million, respectively, for other postretirement
    benefit plans.(3)
    
    Pretax amortization of net loss
    and prior service cost (credit) was $139.3 million and
    $12.1 million, respectively, relating to pension plans and
    $26.6 million and $(43.4) million, respectively,
    relating to other postretirement benefit plans. 131




---



##### Table of Contents



December 31

2007


2006Net unrealized loss on derivatives

$
(39.7
)

$
(35.3
)Net unrealized gain on investments


143.6



85.6Pension plan net loss


(853.6
)


(1,103.7
)Other postretirement benefit plan net loss


(305.4
)


(315.1
)Pension plan prior service cost


(38.0
)


(57.8
)Other postretirement benefit plan prior service cost


204.1



243.4Cumulative translation adjustment related to equity investees


62.9



18.6$
(826.1
)

$
(1,164.3
)     18.
    Segment
    Reporting    non-U.S. subsidiaries
 132




---



##### Table of Contents



Pharmaceutical


Vaccines(1)


All Other


TotalYear Ended December 31, 2007Segment revenues

$
20,101.5


$
3,837.6


$
162.0


$
24,101.1Segment profits


14,076.7



2,605.0



452.7



17,134.4Included in segment profits:Equity income from affiliates


2,260.0



65.8



390.1



2,715.9Depreciation and amortization


(131.0
)


(6.1
)


-



(137.1
)Year 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
)   (1)
    In accordance with segment reporting requirements, Vaccines
    segment revenues exclude $440.6 million,
    $153.9 million and $119.1 million in 2007, 2006 and
    2005, respectively, of vaccine sales by certain
    non-U.S.
    subsidiaries managed by and included in the Pharmaceutical
    segment.      Years Ended
    December 31

2007


2006


2005Segment revenues

$
24,101.1


$
22,242.4


$
21,824.8Other revenues


96.6



393.6



187.1$
24,197.7


$
22,636.0


$
22,011.9    133




---



##### Table of Contents



(1)
  (Years Ended
    December 31)

2007


2006


2005Singulair

$
4,266.3


$
3,579.0


$
2,975.6Cozaar/Hyzaar


3,350.1



3,163.1



3,037.2Fosamax


3,049.0



3,134.4



3,191.2Zocor


876.5



2,802.7



4,381.7Cosopt/Trusopt


786.8



697.1



617.2Primaxin


763.5



704.8



739.6Januvia


667.5



42.9



-Cancidas


536.9



529.8



570.0Vasotec/Vaseretic


494.6



547.2



623.1Maxalt


467.3



406.4



348.4Proscar


411.0



618.5



741.4Propecia


405.4



351.8



291.9Arcoxia


329.1



265.4



218.2Crixivan/Stocrin


310.2



327.3



348.4Emend


204.2



130.8



87.0Invanz


190.2



139.2



93.7Janumet


86.4



-



-Other pharmaceutical
    (2)


2,465.9



2,780.5



2,295.119,660.9



20,220.9



20,559.7Vaccines:
    (3)Gardasil


1,480.6



234.8



-RotaTeq


524.7



163.4



-Zostavax


236.0



38.6



-ProQuad/M-M-R II/Varivax


1,347.1



820.1



597.4Hepatitis vaccines


279.9



248.5



194.5Other vaccines


409.9



354.0



311.44,278.2



1,859.4



1,103.3Other
    (4)


258.6



555.7



348.9$
24,197.7


$
22,636.0


$
22,011.9   (1)
    Presented net of discounts and returns.(2)
    Other pharmaceutical primarily includes sales of other human
    pharmaceutical products and revenue from the Companys
    relationship with AstraZeneca LP primarily relating to sales
    of Nexium, as well asPrilosec. Revenue from
    AstraZeneca LP was $1.7 billion, $1.8 billion and
    $1.7 billion in 2007, 2006 and 2005, respectively. In 2006,
    other pharmaceutical also reflects certain supply sales,
    including supply sales associated with the Companys
    arrangement with Dr. Reddys Laboratories for the sale
    of generic simvastatin.(3)
    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.(4)
    Other primarily includes other human and animal health joint
    venture supply sales and other miscellaneous revenues. 134




---



##### Table of Contents



Years Ended
    December 31

2007


2006


2005United States

$
14,690.9


$
13,776.8


$
12,766.6Europe, Middle East and Africa


5,159.0



4,977.1



5,203.5Japan


1,533.2



1,479.0



1,637.9Other


2,814.6



2,403.1



2,403.9$
24,197.7


$
22,636.0


$
22,011.9     Years Ended
    December 31

2007


2006


2005Segment profits

$
17,134.4


$
14,922.9


$
14,280.4Other profits


21.8



256.7



175.3Adjustments


367.7



516.3



615.3Unallocated:Interest income


741.1



764.3



480.9Interest expense


(384.3
)


(375.1
)


(385.5
)Equity income from affiliates


260.6



233.7



311.6Depreciation and amortization


(1,851.0
)


(2,110.4
)


(1,555.1
)Research and development


(4,882.8
)


(4,782.9
)


(3,848.0
)U.S. VioxxSettlement Agreement charge


(4,850.0
)


-



-Other expenses, net


(3,186.8
)


(3,204.1
)


(2,711.0
)$
3,370.7


$
6,221.4


$
7,363.9     (1)
  Years Ended
    December 31

2007


2006


2005United States

$
10,943.0


$
11,542.7


$
11,525.6Europe, Middle East and Africa


1,650.3



1,730.7



1,991.2Japan


885.3



942.4



1,074.7Other


1,035.4



1,353.8



1,411.1$
14,514.0


$
15,569.6


$
16,002.6   (1)
    Long-lived assets are comprised of property, plant and
    equipment, net; goodwill and intangible assets, net.   135




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm  
  Internal Control 
    Integrated Framework
            
     136




---



##### Table of Contents



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

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


3rd Q(2),(3),(4)


2nd Q(2),(3)


1st Q(5)2007(6)Sales


$6,242.8



$6,074.1



$6,111.4



$5,769.4Materials and production costs


1,544.8



1,517.7



1,552.3



1,525.8Marketing and administrative expenses


1,719.5



1,951.4



2,083.7



1,802.0Research and development expenses


1,381.7



1,440.5



1,030.5



1,030.0Restructuring costs


156.2



49.3



55.8



65.8Equity income from affiliates


(796.3
)


(768.5
)


(759.1
)


(652.6
)U.S. Vioxx product liability settlement charge


4,850.0



-



-



-Other (income) expense, net


567.4



(180.9
)


(84.0
)


(256.0
)(Loss) income before taxes


(3,180.5
)


2,064.6



2,232.2



2,254.4Net (loss) income


(1,630.9
)


1,525.5



1,676.4



1,704.3Basic (loss) earnings per common share


$(0.75
)


$0.70



$0.77



$0.79(Loss) earnings per common share assuming dilution


$(0.75
)


$0.70



$0.77



$0.782006(6)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



$0.69   (1)
    Amounts for 2007 include the impact of the U.S.Vioxx
    Settlement Agreement charge, a civil governmental
    investigations charge and an insurance arbitration gain (see
    Note 10). The fourth quarter tax provision, in addition to
    these items, also reflects the favorable impacts of adjustments
    relating to certain federal and state tax items.(2)
    Amounts for third and second quarter 2007 and fourth and
    third quarter 2006 include the impact of additionalVioxx
    legal defense reserves (see Note 10). Amounts for fourth
    quarter 2006 include the impact ofFosamax legal defense
    reserves (see Note 10).(3)
    Amounts for third quarter 2007 and fourth and second quarter
    2006 include acquired research expenses associated with
    acquisitions (see Note 4).(4)
    Amounts for 2007 include a net gain on the settlements of
    certain patent disputes.(5)
    Amounts for 2007 include gains on sales of assets and product
    divestitures.(6)
    Amounts for 2007 and 2006 include the impact of restructuring
    actions (see Note 3). 137




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##### Table of Contents



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 Form 10-K
  non-U.S. locations.
 Managements
    Report  Managements
    Responsibility for Financial Statements
  Form 10-K
      Form 10-K Form 10-K
 138




---



##### Table of Contents



Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f). Internal Control  Integrated Framework Internal Control  Integrated
    Framework Form 10-K
  -s- Richard T. Clark
    Richard T. ClarkChairman, President
    and Chief Executive Officer

-s- Peter N. Kellogg
    Peter N. KelloggExecutive 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.   139




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##### Table of Contents



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               140




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##### Table of Contents



2.
    Financial Statement Schedules    Merck/Schering-Plough
    Cholesterol Partnership
    Combined Statements of Net Sales and Contractual Expenses Years
    Ended December 31,
    ($ in millions)
  2007


2006


2005Net sales


$5,186



$3,884



$2,425Cost of sales


216



179



93Selling, general and administrative


1,151



1,056



945Research and development


156



161



1341,523



1,396



1,172Income from operations


$3,663



$2,488



$1,253   Merck/Schering-Plough
    Cholesterol Partnership
    Combined Balance Sheets December 31,
    ($ in millions)
  2007


2006AssetsCash and cash equivalents

$
491


$
36Accounts receivable, net


402



293Inventories


105



87Prepaid expenses and other assets


16



14Total assets

$
1,014


$
430Liabilities and Partners Capital (Deficit)Rebates payable

$
377


$
271Payable to Merck, net


119



64Payable to Schering-Plough, net


115



169Accrued expenses and other liabilities


45



7Total liabilities


656



511Commitments and contingent liabilities (notes 3 and 5)Partners capital (deficit)


358



(81
)Total liabilities and Partners capital (deficit)

$
1,014


$
430   The accompanying notes are an integral part of these combined
    financial statements.
 141




---



##### Table of Contents



Merck/Schering-Plough
    Cholesterol Partnership
    Combined Statements of Cash Flows Years
    Ended December 31,
    ($ in millions)
  2007


2006


2005Operating Activities:Income from operations

$
3,663


$
2,488


$
1,253Adjustments to reconcile income from operations to net cash
    provided by operating activities:Accounts receivable, net


(109
)


(63
)


(46
)Inventories


(18
)


(21
)


(2
)Prepaid expenses and other assets


(2
)


(1
)


(12
)Rebates payable


106



151



85Payable to Merck and Schering-Plough, net


1



(130
)


36Accrued expenses and other liabilities


38



5



2Non-cash charges


60



52



Net cash provided by operating activities


3,739



2,481



1,316Financing Activities:Contributions from Partners


722



721



710Distributions to Partners


(4,006
)


(3,206
)


(2,033
)Net cash used for financing activities


(3,284
)


(2,485
)


(1,323
)Net increase/(decrease) in cash and cash equivalents


455



(4
)


(7
)Cash and cash equivalents, beginning of period


36



40



47Cash and cash equivalents, end of period

$
491


$
36


$
40   The accompanying notes are an integral part of these combined
    financial statements.
 142




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##### Table of Contents



Merck/Schering-Plough
    Cholesterol Partnership
    Combined Statements of Partners Capital (Deficit) ($
    in millions)
  Schering-Plough


Merck


TotalBalance, January 1, 2005

$
56


$
(122
)

$
(66
)Contributions from Partners


330



380



710Income from operations


689



564



1,253Distributions to Partners


(1,042
)


(991
)


(2,033
)Balance, December 31, 2005


33



(169
)


(136
)Contributions from Partners


344



429



773Income from operations


1,273



1,215



2,488Distributions to Partners


(1,648
)


(1,558
)


(3,206
)Balance, December 31, 2006


2



(83
)


(81
)Contributions from Partners


276



506



782Income from operations


1,831



1,832



3,663Distributions to Partners


(1,944
)


(2,062
)


(4,006
)Balance, December 31, 2007

$
165


$
193


$
358   The accompanying notes are an integral part of these combined
    financial statements.
 143




---



##### Table of Contents



Merck/Schering-Plough
    Cholesterol Partnership
    Notes to Combined Financial Statements
  1.
    Description
    of Business and Basis of Presentation  Description
    of Business
     
    Ezetimibe, a once daily CAI, non-statin cholesterol reducing
    medicine used alone or co-administered with any statin
    drug, and
    Ezetimibe and simvastatin (Mercks existing ZOCOR statin
    cholesterol modifying medicine) combined into one tablet
    (marketed today in the United States as VYTORIN and as INEGY in
    most other countries).       144




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##### Table of Contents



Basis of
    Presentation
           
    Manufacturing costs and expenses  All contractually
    agreed upon manufacturing plant costs and expenses incurred by
    the Partners related to the manufacture of the Partnership
    products are included as Cost of sales in the
    accompanying combined statements of net sales and contractual
    expenses, including direct production costs, certain production
    variances, expenses for plant services and administration,
    warehousing, distribution, materials management, technical
    services, quality control, and asset utilization. All other
    manufacturing costs and expenses incurred by the Partners not
    agreed to be included in the determination of profits under the
    contractual agreements are not invoiced to the Partnership and,
    therefore, are excluded from the accompanying combined financial
    statements. These costs and expenses include but are not limited
    to yield gains and losses in excess of jointly agreed upon yield
    rates and excess/idle capacity of manufacturing plant assets. 145




---



##### Table of Contents




    Direct promotion expenses  Direct promotion
    represents direct and identifiable out-of-pocket expenses
    incurred by the Partners on behalf of the Partnership, including
    but not limited to contractually agreed upon expenses related to
    market research, detailing aids, agency fees, direct-to-consumer
    advertising, meetings and symposia, trade programs, launch
    meetings, special sales force incentive programs and product
    samples. All such contractually agreed upon expenses are
    included in Selling, general and administrative in
    the accompanying combined statements of net sales and
    contractual expenses. All other promotion expenses incurred by
    the Partners not agreed to be included in the determination of
    profits under the contractual agreements are excluded from the
    accompanying combined financial statements.
    Selling expenses  In the United States, Canada,
    Puerto Rico and other markets outside the United States
    (primarily Italy), the general sales forces of the Partners
    provide a majority of the physician detail activity at an agreed
    upon cost which is included in Selling, general and
    administrative in the accompanying combined statements of
    net sales and contractual expenses. In addition, the agreed upon
    costs of a limited specialty sales force for the United States
    market that calls on opinion leaders in the field of cholesterol
    medicine are also included in Selling, general and
    administrative. All other selling expenses incurred by the
    Partners not agreed to be included in the determination of
    profits under the contractual agreements are excluded from the
    accompanying combined financial statements. These expenses
    include the total costs of the general sales forces of the
    Partners detailing the Cholesterol Products in most countries
    other than the United States, Canada, Puerto Rico and Italy.
    Administrative expenses  Administrative support is
    primarily provided by one of the Partners. The contractually
    agreed upon expenses for support are determined based on a
    percentage of Cholesterol Product net sales. Such amounts are
    included in Selling, general and administrative in
    the accompanying combined statements of net sales and
    contractual expenses. Selected contractually agreed upon direct
    costs of employees of the Partners for support services and
    out-of-pocket expenses incurred by the Partners on behalf of the
    Partnership are also included in Selling, general and
    administrative. All other expenses incurred by the
    Partners not agreed to be included in the determination of
    profits under the contractual agreements are excluded from the
    accompanying combined financial statements. These expenses
    include, but are not limited to, certain U.S. managed care
    services, Partners subsidiary management in most
    international markets, and other indirect expenses such as
    corporate overhead and interest.
    Research and development (R&D)
    expenses  R&D activities are performed by the
    Partners and agreed upon costs and expenses are invoiced to the
    Partnership. These agreed upon expenses generally represent an
    allocation of each Partners estimate of full time
    equivalents devoted to the research and development of the
    cholesterol and respiratory products and include grants and
    other third-party expenses. These contractually agreed upon
    allocated costs are included in Research and
    development in the accompanying combined statements of net
    sales and contractual expenses. All other R&D costs that
    are incurred by the Partners but not jointly agreed upon, are
    excluded from the accompanying combined financial statements.  2.
    Summary
    of Significant Accounting Policies  Principles
    of Combination
   Use of
    Estimates
  146




---



##### Table of Contents



Foreign
    Currency Translation
   Cash and
    Cash Equivalents
   Inventories
   Intangible
    Assets
   Revenue
    Recognition, Rebates, Returns and Allowances
     Income
    Taxes
 Accounting for Uncertainty in
    Income Taxes
  Concentrations
    of Credit Risk
  147




---



##### Table of Contents



3.
    Inventories    (Dollars in Millions)

2007


2006Finished goods

$
37


$
25Raw materials and work in process


68



62$
105


$
87     4.
    Related
    Party Transactions    December 31, 2007


December 31, 2006Schering-






Schering-(Dollars in Millions)

Merck

Plough

Total


Merck

Plough

TotalReceivables

$
128

$
6

$
134


$
399

$
11

$
410Payables


247


121


368



463


180


643Payables, net

$
119

$
115

$
234


$
64

$
169

$
233         5.
    Legal and
    Other Matters   148




---



##### Table of Contents



149




---



##### Table of Contents



INDEPENDENT
    AUDITORS REPORT
            
       150




---



##### Table of Contents



Schedules other than those listed above have been omitted
    because they are either not required or not applicable.    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. (May 17, 2007)  Incorporated by reference
    to Current Report on
    Form 8-K
    dated May 17, 20073
.2



By-Laws of Merck & Co., Inc. (as amended effective
    May 31, 2007)  Incorporated by reference to
    Current Report on
    Form 8-K
    dated May 31, 20074
.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)  Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 2006*10
.5



2001 Incentive Stock Plan (amended and restated as of
    December 19, 2006)  Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 2006*10
.6



2004 Incentive Stock Plan (amended and restated as of
    December 19, 2006)  Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 2006*10
.7



2007 Incentive Stock Plan (as amended effective
    December 19, 2006)  Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 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



Merck & Co., Inc. Special Separation Program for
    Separated Employees (effective as of January 2,
    2008)*10
.11



Merck & Co., Inc. Special Separation Program for
    Bridged Employees (effective as of January 2,
    2008) 151




---



##### Table of Contents



ExhibitNumber



Description*10
.12



Merck & Co., Inc. Special Separation Program for
    Separated Retirement Eligible Employees (effective
    as of January 2, 2008)*10
.13



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
.14



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
.15



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
.16



2006 Non-Employee Directors Stock Option Plan (effective
    April 25, 2006; as amended and restated February 27,
    2007)  Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 2006*10
.17



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
.18



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
.19



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
.20



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
.21



Letter Agreement between Merck & Co., Inc. and David
    W. Anstice, dated December 15, 2006 
    Incorporated by reference to
    Form 10-K
    Annual Report for the fiscal year ended December 31, 2006*10
.22



Offer Letter between Merck & Co., Inc. and Peter N.
    Kellogg, dated June 18, 2007  Incorporated by
    reference to Current Report on
    Form 8-K
    dated June 28, 200710
.23



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
.24



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
.25



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
.26



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
.27



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
.28



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
.29



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, 1998 152




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##### Table of Contents



ExhibitNumber



Description10
.30



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
.31



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, 200610
.32



Settlement Agreement, dated November 9, 2007, by and
    between Merck & Co., Inc. and The Counsel Listed on
    the Signature Pages Hereto, including the exhibits
    thereto  Incorporated by reference to Current Report
    on
    Form 8-K
    dated November 9, 200712




Computation of Ratios of Earnings to Fixed Charges21




Subsidiaries of Merck & Co., Inc.23
.1



Consent of Independent Registered Public Accounting
    Firm  Contained on page 155 of this Report23
.2



Independent Auditors Consent  Contained on
    page 156 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.
 153




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##### Table of Contents



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

Chairman, President and Chief Executive Officer; Principal
    Executive Officer; Director

February 28, 2008PETER
    N. KELLOGG

Executive Vice President and Chief Financial Officer; Principal
    Financial Officer

February 28, 2008JOHN
    CANAN

Senior Vice President and Controller; Principal Accounting
    Officer

February 28, 2008JOHNNETTA
    B. COLE

Director

February 28, 2008STEVEN
    F. GOLDSTONE

Director

February 28, 2008THOMAS
    H. GLOCER

Director

February 28, 2008WILLIAM
    B. HARRISON, JR.

Director

February 28, 2008HARRY
    R. JACOBSON

Director

February 28, 2008WILLIAM
    N. KELLEY

Director

February 28, 2008ROCHELLE
    B. LAZARUS

Director

February 28, 2008THOMAS
    E. SHENK

Director

February 28, 2008ANNE
    M. TATLOCK

Director

February 28, 2008SAMUEL
    O. THIER

Director

February 28, 2008WENDELL
    P. WEEKS

Director

February 28, 2008PETER
    C. WENDELL

Director

February 28, 2008   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)
 154




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##### Table of Contents



Exhibit 23.1
 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 333-146356) 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, 333-139561 333-139562) Form 10-K.
  
      155




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##### Table of Contents



Exhibit 23.2
 INDEPENDENT
    AUDITORS CONSENT  Nos. 33-39349, 33-60322, 33-57421, 333-17045, 333-36383, 333-77569, 333-72546, 333-87034, 333-118186 333-146356 Form S-3 Nos. 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, 333-139561 333-139562 Form S-8 Form 10-K
  
      156




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##### Table of Contents



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. (May 17, 2007)  Incorporated by
reference to Current Report on Form 8-K dated May 17, 20073.2
    
    
    
    By-Laws of Merck & Co., Inc. (as amended effective May 31, 2007)  Incorporated by reference
to Current Report on Form 8-K dated May 31, 20074.1
    
    
    
    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)  Incorporated by
reference to Form 10-K Annual Report for the fiscal year ended December 31, 2006*10.5
    
    
    
    2001 Incentive Stock Plan (amended and restated as of December 19, 2006)  Incorporated by
reference to Form 10-K Annual Report for the fiscal year ended December 31, 2006*10.6
    
    
    
    2004 Incentive Stock Plan (amended and restated as of December 19, 2006)  Incorporated by
reference to Form 10-K Annual Report for the fiscal year ended December 31, 2006*10.7
    
    
    
    2007 Incentive Stock Plan (as amended effective December 19, 2006)  Incorporated by reference
to Form 10-K Annual Report for the fiscal year ended December 31, 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
    
    
    
    Merck & Co., Inc. Special
Separation Program for Separated Employees (effective as of January
2, 2008)*10.11
    
    
    
    Merck & Co., Inc. Special
Separation Program for Bridged Employees (effective as of January
2, 2008)*10.12
    
    
    
    Merck & Co., Inc. Special
Separation Program for Separated Retirement Eligible Employees (effective as of January 2, 2008)




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##### Table of Contents



ExhibitNumber
    
    
    
    Description*10.13
    
    
    
    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*10.14
    
    
    
    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*10.15
    
    
    
    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*10.16
    
    
    
    2006 Non-Employee Directors Stock Option Plan (effective April 25, 2006; as amended and
restated February 27, 2007)  Incorporated by reference to Form 10-K Annual Report for the
fiscal year ended December 31, 2006*10.17
    
    
    
    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*10.18
    
    
    
    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*10.19
    
    
    
    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*10.20
    
    
    
    Offer Letter between Merck & Co., Inc. and Peter S. Kim, dated December 15, 2000 
Incorporated by reference toForm 10-K Annual Report for the fiscal year ended December 31,
2003*10.21
    
    
    
    Letter Agreement between Merck & Co., Inc. and David W. Anstice, dated December 15, 2006 
Incorporated by reference to Form 10-K Annual Report for the fiscal year ended December 31,
2006*10.22
    
    
    
    Offer Letter between Merck & Co., Inc. and Peter N. Kellogg, dated June 18, 2007 
Incorporated by reference to Current Report on Form 8-K dated June 28, 200710.23
    
    
    
    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, 199810.24
    
    
    
    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, 199810.25
    
    
    
    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, 199810.26
    
    
    
    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
toForm 10-Q Quarterly
Report for the period ended June 30, 199810.27
    
    
    
    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, 199810.28
    
    
    
    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, 199810.29
    
    
    
    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, 199810.30
    
    
    
    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, 1998




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##### Table of Contents



ExhibitNumber
    
    
    
    Description10.31
    
    
    
    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, 200610.32
    
    
    
    Settlement Agreement, dated November 9, 2007, by and between Merck & Co., Inc. and The Counsel
Listed on the Signature Pages Hereto, including the exhibits thereto  Incorporated by
reference to Current Report on Form 8-K dated November 9, 200712
    
    
    
    Computation of Ratios of Earnings to Fixed Charges21
    
    
    
    Subsidiaries of Merck & Co., Inc.23.1
    
    
    
    Consent of Independent Registered
Public Accounting Firm  Contained on page 155 of this Report23.2
    
    
    
    Independent Auditors
Consent  Contained on page 156 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.