##### Table of Contents





As filed with the Securities and Exchange Commission on
    February 27, 2009
    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, 2008oro

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 Stock Exchange       Yes þ     No o
  Yes o     No þ
  Yes þ     No o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
  Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   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 28, 2009, 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

18Cautionary Factors that May Affect Future
    Results

26Item 1B.


Unresolved Staff Comments

27Item 2.


Properties

27Item 3.


Legal Proceedings

27Item 4.


Submission of Matters to a Vote of Security
    Holders

42Executive Officers of the Registrant

42PartIIItem 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

85Item 8.


Financial Statements and Supplementary Data

86(a)   Financial Statements

86Notes to
    Consolidated Financial Statements

89Report of
    Independent Registered Public Accounting Firm

141(b)   Supplementary Data

142Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure

143Item 9A.


Controls and Procedures

143Managements
    Report

143Item 9B.


Other Information

144Part IIIItem 10.


Directors, Executive Officers and Corporate
    Governance

144Item 11.


Executive Compensation

145Item 12.


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

145Item 13.


Certain Relationships and Related Transactions,
    and Director Independence

145Item 14.


Principal Accountant Fees and Services

145Part IVItem 15.


Exhibits and Financial Statement Schedules

146Signatures

161Consent of Independent Registered Public Accounting Firm

162Independent Auditors Consent

163EX-10.3: DEFERRAL PROGRAMEX-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-10.16: SUPPLEMENTAL RETIREMENT PLANEX-10.18: PLAN FOR DEFERRED PAYMENT OF DIRECTORS'S COMPENSATIONEX-12: COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGESEX-21: SUBSIDIARIES OF MERCK & CO., INC.EX-24.1: POWER OF ATTORNEYEX-24.2: CERTIFIED RESOLUTION OF BOARD OF DIRECTORSEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICAIONEX-32.2: CERTIFICATION




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##### Table of Contents



PART I  Item 1.
    Business.      Overview Fosamax Fosamax Fosamax Plus D Fosamax Zocor , Januvia Janumet Isentress
      best-in-class
   2




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##### Table of Contents



Gardasil Isentress first-in-class
           3




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##### Table of Contents



Product
    Sales
  (1)
  ($ in millions)

2008


2007


2006Pharmaceutical:Singulair

$
4,336.9


$
4,266.3


$
3,579.0Cozaar/Hyzaar


3,557.7



3,350.1



3,163.1Fosamax


1,552.7



3,049.0



3,134.4Januvia


1,397.1



667.5



42.9Cosopt/Trusopt


781.2



786.8



697.1Zocor


660.1



876.5



2,802.7Maxalt


529.2



467.3



406.4Propecia


429.1



405.4



351.8Arcoxia


377.3



329.1



265.4Vasotec/Vaseretic


356.7



494.6



547.2Janumet


351.1



86.4



-Proscar


323.5



411.0



618.5Emend


263.8



204.2



130.8Other
    pharmaceutical(2)


2,278.9



2,422.9



2,780.5Vaccine and infectious disease product sales included in the
    Pharmaceutical
    segment(3)


2,187.6



1,800.5



1,315.8Pharmaceutical segment revenues


19,382.9



19,617.6



19,835.6Vaccines(4)

    and Infectious Diseases:Gardasil


1,402.8



1,480.6



234.8ProQuad/M-M-R II/Varivax


1,268.5



1,347.1



820.1RotaTeq


664.5



524.7



163.4Zostavax


312.4



236.0



38.6Hepatitis vaccines


148.3



279.9



248.5Other vaccines


354.6



409.9



354.0Primaxin


760.4



763.5



704.8Cancidas


596.4



536.9



529.8Isentress


361.1



41.3



-Crixivan/Stocrin


275.1



310.2



327.3Invanz


265.0



190.2



139.2Other infectious disease


15.5



1.7



-Vaccine and infectious disease product sales included in the
    Pharmaceutical
    segment(3)


(2,187.6
)


(1,800.5
)


(1,315.8
)Vaccines and Infectious Diseases segment revenues


4,237.0



4,321.5



2,244.7Other segment
    revenues(5)


81.8



162.0



162.1Total segment revenues


23,701.7



24,101.1



22,242.4Other(6)


148.6



96.6



393.6$
23,850.3


$
24,197.7


$
22,636.0   (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 as Prilosec. Revenue from AZLP was
    $1.6 billion, $1.7 billion and $1.8 billion in
    2008, 2007 and 2006, respectively. In 2006, other pharmaceutical
    also reflected certain supply sales, including supply sales
    associated with the Companys arrangement with
    Dr. Reddys Laboratories for the sale of generic
    simvastatin.(3)
    Sales of vaccine and infectious disease products by
    non-U.S.
    subsidiaries are included in the Pharmaceutical segment.(4)
    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. These amounts do, however, reflect
    supply sales to Sanofi Pasteur MSD.(5)
    Includes other non-reportable human and animal health
    segments.(6)
    Other revenues are primarily comprised of miscellaneous
    corporate revenue, sales related to divested products or
    businesses and other supply sales not included in segment
    results. 4




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##### Table of Contents



Singulair Cozaar Hyzaar Vasotec Vaseretic , and/or Fosamax Fosamax Plus D Fosamax Januvia Janumet Cosopt Trusopt , Zocor Maxalt , Propecia Arcoxia Proscar Emend
  Gardasil, Varivax ProQuad M-M-R RotaTeq Zostavax Primaxin Cancidas Isentress Crixivan Stocrin Invanz
  U.S. Product Approvals Emend chemotherapy-induced Emend Emend three-day Emend Ivemend
  Cancidas
  Gardasil Gardasil
  U.S. Product Liability Settlement Vioxx Vioxx
  Vioxx Vioxx
 5




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Joint Ventures
  Pharmaceutical
 Zetia ( Ezetrol Vytorin Inegy Zetia Zocor,
  Vytorin
  Vytorin 10/40 mg Vytorin Vytorin
 6




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Vytorin Vytorin Vytorin Vytorin Vytorin Vytorin Vytorin
  Vytorin
  Vytorin Vytorin Vytorin Vytorin Zetia and/or
  Prilosec (
   7




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Nexium Prilosec Nexium Prilosec Nexium Prilosec true-up
  Pepcid AC Pepcid Pepcid Complete,
  Vaccines
   Other
   Competition
 8




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Zocor, Zocor Fosamax Fosamax Plus D Fosamax Fosamax Plus D Trusopt Cosopt
  Distribution
  Raw Materials
  Government Regulation and Investigation
   9




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10




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##### Table of Contents



Patents, Trademarks and Licenses per se
      Product

Year of Expiration (in
    U.S.)Cancidas

2015Comvax

2020Cozaar

2010Crixivan

2012 (compound)/2018 (formulation)Emend

2015Gardasil

2026Hyzaar

2010Invanz

2016 (compound)/2017 (composition)Isentress

2023Januvia/Janumet

2022 (compound)/2026 (salt)Maxalt

2012 (compound)/2014 (other)Primaxin

2009Propecia

2013Recombivax

2020RotaTeq

2019 (with pending Patent Term Restoration)Singulair

2012Zetia/Vytorin

2017 (ezetimibe  component in both products)Zolinza

2015Zostavax

2016  11




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/Stocrin. Stocrin
            Research
    and Development
    best-in-class
   12




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first-in-class
 13




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Gardasil Isentress first-in-class
  Gardasil Gardasil Gardasil
  Isentress th Isentress Isentress Isentress Isentress Isentress Isentress
           14




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Tredaptive Tredaptive Tredaptive Tredaptive Tredaptive Tredaptive
      Januvia
         15




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and/or and/or
    Back-up
   Phase I
  Alzheimers
    Disease
 V950
 Anemia
 MK-2578
 Cancer
 MK-0752
 MK-1775
 MK-2206
 MK-4101
 MK-4827
 MK-5108
 MK-8033
 V934/V935
 Cardiovascular
 MK-1597
 MK-3614
 MK-8984
 Phase I
  Diabetes
 MK-4074
 Infectious Disease
 MK-3281
 Neurologic
 MK-5395
 Neutropenia
 INS-19
 INS-20
 Psychiatric Disease
 MK-0594
 MK-8368
 MK-8998
 Respiratory Disease
 MK-5932
 Phase II
  Atherosclerosis
 MK-1903
 MK-6213
 Cancer
 MK-0646
 Diabetes
 MK-0893
 MK-0941
 MK-8245
 Infectious Disease
 MK-7009
 V419
 V710
 Insomnia
 MK-4305
 Neurologic
 MK-0249
 Osteoporosis
 MK-5442 (JTT-305)
 Psychiatric Disease
 MK-5757
 Respiratory Disease
 MK-0476C
 MK-0633
 Sarcopenia
 MK-2866
 Phase III
  Acute Heart Failure
 MK-7418
 (rolofylline)
 Atherosclerosis
 MK-0524A
 (extended-release
 niacin/laropiprant)
 MK-0524B
        (extended-release
 niacin/laropiprant/
 simvastatin)
 MK-0859
 (anacetrapib)
 Cancer
 MK-8669
 (deforolimus;
 AP23573)
 Diabetes
 MK-0431C
 HPV
 V503
 Migraine
 MK-0974
 (telcagepant)
 Osteoporosis
 MK-0822
 (odanacatib)
  16




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Zetia Vytorin Cozaar Hyzaar Prilosec Nexium Vasotec Vaseretic
  Employees
      Environmental
    Matters
    Geographic
    Area Information
     17




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Available
    Information
  www.merck.com. Form 10-K, Form 10-Q, Form 8-K,
  www.merck.com/about/corporategovernance
  Item 1A.
    Risk
    Factors.  Form 10-K, Form 10-K
  The Company faces significant litigation related to
    Vioxx.
  Vioxx Vioxx, Vioxx. Vioxx Vioxx Vioxx
   18




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Vioxx
    Vioxx
  Vioxx Vioxx Vioxx en banc, Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx. Vioxx and/or
  Vioxx. Vioxx Vioxx and/or
   19




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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 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.
   20




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Fosamax Fosamax Plus D Fosamax Fosamax Plus D Fosamax Trusopt Cosopt
  Primaxin Primaxin Cozaar Hyzaar
    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
 21




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Issues concerning Vytorinand the ENHANCE and SEAS
    clinical trials have had an adverse effect on sales of
    Vytorinand Zetiain the U.S.
  Vytorin Zetia
  Vytorin Vytorin Vytorin Vytorin Zetia and/or
  Vytorin Vytorin Zetia
  Vytorin Vytorin Vytorin Vytorin
 22




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##### Table of Contents



Vytorin
  Vytorin Vytorin
  Vytorin Zetia Vytorin Zetia
  The Companys products, including products in
    development, can not be marketed unless the Company obtains and
    maintains regulatory approval.
      The Company is dependent on its patent rights, and if its
    patent rights are invalidated or circumvented, its business
    would be adversely affected.
     23




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Singulair
    The Company faces intense competition from lower-cost generic
    products.
      The Company faces intense competition from new products.
    The Company faces pricing pressure with respect to its
    products.
     24




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##### Table of Contents



The Company is experiencing difficulties and delays in the
    manufacturing of certain 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.
    The recent financial crisis and current uncertainty in global
    economic conditions could negatively affect the Companys
    operating results.
    Reliance on third party relationships and outsourcing
    arrangements could adversely affect the Companys
    business.
   25




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The Company is increasingly dependent on sophisticated
    information technology
    and infrastructure.
   Cautionary
    Factors that May Affect Future Results     
    Significant litigation related to Vioxx.
    Competition from generic products as the Companys products
    lose patent protection.
    Increased brand competition in therapeutic areas
    important to the Companys long-term business performance.
    The difficulties and uncertainties inherent in new product
    development. The outcome of the lengthy and complex process of
    new product development is inherently uncertain. A 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. 26




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##### Table of Contents




    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, including recently enacted
    laws in a majority of U.S. states requiring security breach
    notification.
    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.    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.        Item 3.
    Legal
    Proceedings.    VioxxLitigation
  Product
    Liability Lawsuits
 and/or Vioxx
 27




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##### Table of Contents



Vioxx and/or Vioxx
  Vioxx
  Vioxx
  Vioxx Vioxx
  www.merck.com
   28




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Vioxx www.merck.com
  Vioxx
   29




---



##### Table of Contents



Vioxx Vioxx
  en banc
    Vioxx Vioxx Vioxx
 30




---



##### Table of Contents



Other
    Lawsuits
 Vioxx Vioxx Vioxx
    Vioxx out-of-pocket Vioxx. Vioxx.
    qui tam Vioxx Vioxx Vioxx and/or and/or
    Shareholder
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx
 31




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##### Table of Contents



Vioxx en banc,
  Vioxx Vioxx
  Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx and/or
 32




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##### Table of Contents



Vioxx Vioxx
  International
    Lawsuits
 Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx
 33




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##### Table of Contents



Additional
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx and/or
  Insurance
 Vioxx co-insurance. Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx
  Investigations
 Vioxx. Vioxx Vioxx Vioxx and/or
  Vioxx.
  Vioxx
  Reserves
 Vioxx Vioxx
 34




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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
  Other
    Product Liability Litigation
  Fosamax Fosamax and/or and/or Fosamax Fosamax Fosamax Fosamax
 35




---



##### Table of Contents



and/or Daubert
  Fosamax Fosamax
  Fosamax
  Fosamax Fosamax Fosamax Fosamax Fosamax Fosamax Fosamax
  Commercial
    Litigation
   36




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##### Table of Contents



Governmental
    Proceedings
    Vytorin/ZetiaLitigation
  Vytorin Vytorin Vytorin Vytorin Zetia and/or
  re-filed Vytorin Vytorin Vytorin Vytorin
 37




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##### Table of Contents



Vytorin Vytorin
  Vytorin
  Vaccine
    Litigation
      and/or M-M-R M-M-R M-M-R M-M-R
 38




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##### Table of Contents



Patent
    Litigation
  Fosamax,
    Nexium, Singulair Primaxin Emend Nexium Zetia Fosamax Singulair Primaxin Nexium Zetia
  Zetia Zetia Zetia
  Primaxin
  Singulair
  Fosamax Fosamax Fosamax Plus D Fosamax Fosamax Plus D
   39




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##### Table of Contents



Fosamax
    Trusopt Cosopt
  Nexium
  Nexium Nexium
  Emend
  Cozaar
  Other
    Litigation
     40




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##### Table of Contents



Environmental
    Matters
  de
    minimis
 41




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##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders.    Executive
    Officers of the Registrant (ages as of February 1,
    2009)
                                   42




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##### Table of Contents



not-for-profit
  not-for-profit
                      not-for-profit
  Vioxx
       43




---



##### Table of Contents



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 Q2008

$
1.52


$
0.38


$
0.38


$
0.38


$
0.382007

$
1.52


$
0.38


$
0.38


$
0.38


$
0.38   Common
    Stock Market Prices
  2008

4th Q


3rd Q


2nd Q


1st QHigh

$
32.46


$
38.90


$
42.24


$
61.18Low

$
22.82


$
30.34


$
34.49


$
36.822007High

$
61.62


$
53.81


$
55.14


$
46.55Low

$
51.44


$
48.11


$
44.52


$
42.35     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)


247,047,953
(2)

$
51.57



126,830,385Equity compensation plans not approved by security
    holders(3)


-



-



-Total


247,047,953


$
51.57



126,830,385     (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. 45




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##### Table of Contents



(2)
    
    Excludes approximately
    6,292,164 shares of restricted stock units and 3,242,796
    performance share units (assuming maximum payouts) under the
    2004 and 2007 Incentive Stock Plans. Also excludes
    268,723 shares of phantom stock deferred under the
    Merck & Co., Inc. Deferral 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 (2,643,159 as of
    December 31, 2008). 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 603,316 shares of
    Merck Common Stock may be purchased under the Assumed Plans, at
    a weighted average exercise price of $22.59. No further grants
    may be made under any Assumed Plans. 46




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##### 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


2008/2003Period Value


CAGR**MERCK

$
81



−4
%DJUSPR


88



−2S&P 500


90



−2   
  2003



2004



2005



2006



2007



2008MERCK



100.00




72.36




75.30




107.42




147.54




80.69DJUSPR



100.00




91.72




90.20




103.18




107.79




88.23S&P 500



100.00




110.87




116.31




134.66




142.05




89.51   *
    
    Assumes that the value of the
    investment in Company Common Stock and each index was $100 on
    December 31, 2003 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, 2008

7,241,000

$28.95

7,241,000

$
2,372.7November 1 
    November 30, 2008

0

N/A

0

$
2,372.7December 1 
    December 31, 2008

0

N/A

0

$
2,372.7Total

7,241,000

$28.95

7,241,000

$
2,372.7    (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)
  2008(1)


2007(2)


2006(3)


2005(4)


2004(5)Results for Year:Sales


$23,850.3



$24,197.7



$22,636.0



$22,011.9



$22,972.8Materials and production costs


5,582.5



6,140.7



6,001.1



5,149.6



4,965.7Marketing and administrative expenses


7,377.0



7,556.7



8,165.4



7,155.5



7,238.7Research and development expenses


4,805.3



4,882.8



4,782.9



3,848.0



4,010.2Restructuring costs


1,032.5



327.1



142.3



322.2



107.6Equity income from affiliates


(2,560.6
)


(2,976.5
)


(2,294.4
)


(1,717.1
)


(1,008.2
)U.S. VioxxSettlement Agreement charge


-



4,850.0



-



-



-Other (income) expense, net


(2,194.2
)


46.2



(382.7
)


(110.2
)


(344.0
)Income before taxes


9,807.8



3,370.7



6,221.4



7,363.9



8,002.8Taxes on income


1,999.4



95.3



1,787.6



2,732.6



2,172.7Net income


7,808.4



3,275.4



4,433.8



4,631.3



5,830.1Basic earnings per common share


$3.66



$1.51



$2.04



$2.11



$2.63Earnings per common share assuming dilution


$3.64



$1.49



$2.03



$2.10



$2.62Cash dividends declared


3,250.4



3,310.7



3,318.7



3,338.7



3,329.1Cash dividends paid per common share


$1.52



$1.52



$1.52



$1.52



$1.49Capital expenditures


1,298.3



1,011.0



980.2



1,402.7



1,726.1Depreciation


1,445.1



1,752.4



2,098.1



1,544.2



1,258.7Year-End Position:Working capital


$4,986.2



$2,787.2



$2,507.5



$7,806.9



$1,688.8Property, plant and equipment, net


11,999.6



12,346.0



13,194.1



14,398.2



14,713.7Total assets


47,195.7



48,350.7



44,569.8



44,845.8



42,572.8Long-term debt


3,943.3



3,915.8



5,551.0



5,125.6



4,691.5Stockholders equity


18,758.3



18,184.7



17,559.7



17,977.7



17,349.3Financial Ratios:Income as a % of sales


32.7
%


13.5
%


19.6
%


21.0
%


25.4
%Net income as a % of average total assets


16.3
%


7.0
%


9.9
%


10.6
%


14.0
%Year-End Statistics:Average common shares outstanding (millions)


2,135.8



2,170.5



2,177.6



2,197.0



2,219.0Average common shares outstanding assuming dilution (millions)


2,145.3



2,192.9



2,187.7



2,200.4



2,226.4Number of stockholders of record


165,700



173,000



184,200



198,200



216,100Number of employees


55,200



59,800



60,000



61,500



62,600   (1)
    Amounts for 2008 include a gain
    on distribution from AstraZeneca LP, a gain related to the sale
    of the Companys remaining worldwide rights toAggrastat, the
    favorable impact of certain tax items, the impact of
    restructuring actions, additional legal defense costs and an
    expense for a contribution to the Merck Company Foundation.(2)
    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.(3)
    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.(4)
    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.(5)
    Amounts for 2004 include the
    impact of the withdrawal ofVioxx, Vioxx legal
    defense costs and restructuring actions. 49




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Description
    of Mercks Business
    Overview
  Fosamax Fosamax Fosamax Plus D Fosamax Zocor, Januvia Janumet Isentress,
      best-in-class
   50




---



##### Table of Contents



Gardasil Isentress first-in-class
            Competition
    and the Health Care Environment
   51




---



##### Table of Contents



52




---



##### Table of Contents



Stocrin Crixivan, Stocrin
  RotaTeq RotaTeq RotaTeq RotaTeq ready-to-use RotaTeq
        Acquisitions
     53




---



##### Table of Contents



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




---



##### Table of Contents



(1)
  ($ in millions)

2008


2007


2006Pharmaceutical:Singulair

$
4,336.9


$
4,266.3


$
3,579.0Cozaar/Hyzaar


3,557.7



3,350.1



3,163.1Fosamax


1,552.7



3,049.0



3,134.4Januvia


1,397.1



667.5



42.9Cosopt/Trusopt


781.2



786.8



697.1Zocor


660.1



876.5



2,802.7Maxalt


529.2



467.3



406.4Propecia


429.1



405.4



351.8Arcoxia


377.3



329.1



265.4Vasotec/Vaseretic


356.7



494.6



547.2Janumet


351.1



86.4



-Proscar


323.5



411.0



618.5Emend


263.8



204.2



130.8Other
    pharmaceutical(2)


2,278.9



2,422.9



2,780.5Vaccine and infectious disease product sales included in the
    Pharmaceutical
    segment(3)


2,187.6



1,800.5



1,315.8Pharmaceutical segment revenues


19,382.9



19,617.6



19,835.6Vaccines(4)

    and Infectious Diseases:Gardasil


1,402.8



1,480.6



234.8ProQuad/M-M-R II/Varivax


1,268.5



1,347.1



820.1RotaTeq


664.5



524.7



163.4Zostavax


312.4



236.0



38.6Hepatitis vaccines


148.3



279.9



248.5Other vaccines


354.6



409.9



354.0Primaxin


760.4



763.5



704.8Cancidas


596.4



536.9



529.8Isentress


361.1



41.3



-Crixivan/Stocrin


275.1



310.2



327.3Invanz


265.0



190.2



139.2Other infectious disease


15.5



1.7



-Vaccine and infectious disease product sales included in the
    Pharmaceutical
    segment(3)


(2,187.6
)


(1,800.5
)


(1,315.8
)Vaccines and Infectious Diseases segment revenues


4,237.0



4,321.5



2,244.7Other segment
    revenues(5)


81.8



162.0



162.1Total segment revenues


23,701.7



24,101.1



22,242.4Other(6)


148.6



96.6



393.6$
23,850.3


$
24,197.7


$
22,636.0   (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
    $1.6 billion, $1.7 billion and $1.8 billion in
    2008, 2007 and 2006, 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)
    Sales of vaccine and infectious disease products by
    non-U.S.
    subsidiaries are included in the Pharmaceutical segment.(4)
    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. These amounts do, however, reflect
    supply sales to Sanofi Pasteur MSD.(5)
    Includes other non-reportable human and animal health
    segments.(6)
    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. 55




---



##### Table of Contents



Singulair Cozaar, Hyzaar, Vasotec Vaseretic and/or Fosamax Fosamax Plus D Fosavance Fosamac Fosamax Januvia Janumet, Cosopt Trusopt, Zocor, Maxalt, Propecia Arcoxia, Proscar Emend,
  Gardasil Varivax ProQuad, M-M-R RotaTeq, Zostavax, Primaxin Cancidas Isentress, Crixivan Stocrin, ; Invanz
  Pharmaceutical
    Segment Revenues
 Fosamax, Zocor Vasotec/Vaseretic, Januvia, Janumet Cozaar/Hyzaar. Zocor Proscar Singulair,
    Cozaar/Hyzaar, Januvia Janumet.
  Singulair Singulair
  Cozaar Hyzaar Cozaar Hyzaar Preminent Cozaar Hyzaar Cozaar Hyzaar
  Fosamax Fosamax Plus D Fosamax
  Januvia Januvia Januvia
  Januvia
 56




---



##### Table of Contents



Januvia
  Janumet Januvia) Janumet Janumet Janumet
  Maxalt Emend Arcoxia Propecia
  Zocor Zocor
    Proscar Proscar Proscar Propecia Propecia
  Cosopt Trusopt
  Primaxin
  Aggrastat
  Nexium
  Zolinza
  Vaccines
    and Infectious Diseases Segment Revenues
 Gardasil Varivax, M-M-R ProQuad, Primaxin Isentress,
    RotaTeq Zostavax Gardasil Varivax, RotaTeq Zostava
  non-U.S. subsidiaries,
 57




---



##### Table of Contents



Gardasil Gardasil Gardasil Gardasil Gardasil Gardasil
  Gardasil Gardasil Gardasil
  Gardasil Gardasil Gardasil
  RotaTeq RotaTeq
  Varivax Zostavax Varivax
 58




---



##### Table of Contents



Zostavax.
    ProQuad M-M-R Varivax ProQuad ProQuad
  Varivax Varivax ProQuad Varivax M-M-R Varivax M-M-R ProQuad ProQuad,
    M-M-R Varivax
  Zostavax Zostavax Zostavax
  PedvaxHIB Comvax PedvaxHIB Comvax
  Vaqta, Vaqta Recombivax HB Recombivax HB Recombivax HB Recombivax HB
  Isentress Isentress Isentress Isentress Isentress
  Isentress Isentress Isentress
  Isentress Isentress Isentress
 59




---



##### Table of Contents



Isentress Isentress Isentress Isentress
  Invanz
  Cancidas
  Costs,
    Expenses and Other
  ($ in millions)

2008


Change


2007


Change


2006Materials and production

$
5,582.5



−9
%

$
6,140.7



2
%

$
6,001.1Marketing and administrative


7,377.0



−2
%


7,556.7



−7
%


8,165.4Research and development


4,805.3



−2
%


4,882.8



2
%


4,782.9Restructuring costs


1,032.5



*



327.1



*



142.3Equity income from affiliates


(2,560.6
)


−14
%


(2,976.5
)


30
%


(2,294.4
)U.S. VioxxSettlement Agreement charge


-



*



4,850.0



-



-Other (income) expense, net


(2,194.2
)


*



46.2



*



(382.7
)$
14,042.5



−33
%

$
20,827.0



27
%

$
16,414.6  *
    
    100% or greater.  Materials
    and Production
     Fosamax Fosamax Plus
    D Zocor
  Marketing
    and Administrative
  60




---



##### Table of Contents



Vioxx Fosamax Vioxx Vioxx Fosamax
  Research
    and Development
     
  Emend Emend Emend three-day Emend Ivemend
    first-in-class 60-day
   61




---



##### Table of Contents



Januvia
      Tredaptive Tredaptive Tredaptive
 62




---



##### Table of Contents



Tredaptive Tredaptive Tredaptive
               63




---



##### Table of Contents



best-in-class
    
  Share-Based
    Compensation
 Share-Based Payment
  Restructuring
    Costs
  64




---



##### Table of Contents



Equity
    Income from Affiliates
 Vytorin Zetia Zetia Gardasil Vytorin Zetia
  U.S. Vioxx
    Settlement Agreement Charge
 Vioxx
  Other
    (Income) Expense, Net
 Aggrastat Vioxx
 65




---



##### Table of Contents



Segment
    Profits
 ($ in millions)

2008


2007


2006Pharmaceutical segment profits

$
12,400.4


$
13,430.6


$
12,476.5Vaccines and infectious diseases segment profits


2,798.9



2,625.0



1,253.1Other segment profits


419.3



452.7



380.7Other


(5,810.8
)


(13,137.6
)


(7,888.9
)Income before income taxes

$
9,807.8


$
3,370.7


$
6,221.4   Vioxx
  Fosamax Fosamax Plus D,
    Zocor Zocor Proscar
  Isentress RotaTeq Varivax
  Taxes on
    Income
 Vioxx
 66




---



##### Table of Contents



Net
    Income and Earnings per Share
  ($ in millions except per share
    amounts)

2008


Change

2007


Change

2006Net income

$
7,808.4


*

$
3,275.4


−26%

$
4,433.8As a % of sales


32.7
%




13.5
%




19.6
%As a % of average total assets


16.3
%




7.0
%




9.9
%Earnings per common share assuming dilution

$
3.64


*

$
1.49


−27%

$
2.03  *
    
    100% or greater.  Net
    Income and Earnings per Common Share
 Vioxx Vioxx Vioxx Singulair Januvia
  Selected
    Joint Venture and Affiliate Information
    Merck/Schering-Plough
    Partnership
 Zetia Ezetrol Zetia Zocor Vytorin Inegy Vytorin
  Zetia Vytorin Zetia
 67




---



##### Table of Contents



($ in millions)

2008


2007


2006Vytorin

$
2,360.0


$
2,779.1


$
1,955.3Zetia


2,201.1



2,407.1



1,928.8$
4,561.1


$
5,186.2


$
3,884.1   Vytorin Zetia Vytorin Zetia
  Vytorin
  Vytorin 10/40 mg Vytorin Vytorin Vytorin Vytorin Vytorin Vytorin Vytorin
 68




---



##### Table of Contents



Vytorin Vytorin
  Vytorin
  Zetia Vytorin.
  Singulair Zetia
      AstraZeneca
    LP
 Prilosec
    Nexium, Prilosec
 69




---



##### Table of Contents



Nexium Prilosec Nexium Prilosec Nexium Prilosec true-up
  true-up True-Up True-Up
  True-Up True-Up
  Merial
    Limited
  70




---



##### Table of Contents



($ in millions)

2008


2007


2006Fipronil products

$
1,053.0


$
1,033.3


$
886.9Biological products


789.7



674.9



600.7Avermectin products


511.8



478.4



468.7Other products


288.2



262.2



238.4$
2,642.7


$
2,448.8


$
2,194.7   Sanofi
    Pasteur MSD
   Gardasil RotaTeq Zostavax
    ($ in millions)

2008

2007

2006Gardasil

$
865.3

$
476.0

$
7.5Viral vaccines


105.1


86.8


100.1Hepatitis vaccines


72.6


72.9


70.9Other vaccines


841.8


802.3


735.4$
1,884.8

$
1,438.0

$
913.9   Johnson &
    Johnson°Merck Consumer Pharmaceuticals Company
 Pepcid AC over-the-counter Pepcid Pepcid Complete over-the-counter
    ($ in millions)

2008

2007

2006Gastrointestinal products

$
210.7

$
218.5

$
250.9Other products


1.4


1.2


1.7$
212.1

$
219.7

$
252.6   Capital
    Expenditures
   71




---



##### Table of Contents



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

2008


2007


2006Working capital

$
4,986.2


$
2,787.2


$
2,507.5Total debt to total liabilities and equity


13.2
%


11.9
%


15.3
%Cash provided by operations to total debt


1.1:1



1.2:1



1.0:1   Vioxx
        Vioxx
 72




---



##### Table of Contents



Vioxx
    Accounting
    for Uncertainty in Income Taxes  an interpretation of
    FASB Statement No. 109 ,
       73




---



##### Table of Contents



Payments
    Due by Period
  ($ in millions)

Total


2009


2010 - 2011


2012 -2013


ThereafterPurchase obligations

$
1,243.6


$
557.7


$
365.1


$
246.5


$
74.3Loans payable and current portion of long-term debt


2,297.1



2,297.1



-



-



-Long-term debt


3,943.3



-



553.6



541.1



2,848.6U.S. VioxxSettlement
    Agreement(1)


4,100.0



4,100.0



-



-



-Unrecognized tax
    benefits(2)


1,203.8



1,203.8



-



-



-Operating leases


376.2



103.0



139.3



77.7



56.2$
13,164.0


$
8,261.6


$
1,058.0


$
865.3


$
2,979.1   (1)
    Timing of payments under the U.S.Vioxx
    Settlement Agreement may vary depending on the timing of the
    claims assessment process.(2)
    As of December 31, 2008, the Companys Consolidated
    Balance Sheet reflects liabilities for unrecognized tax
    benefits, interest and penalties of $5.35 billion,
    including $1.20 billion reflected as a current liability,
    largely reflecting amounts related to the settlement with the
    Canadian Revenue Agency as discussed above. 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 2009 can not be made.      5-year
     74




---



##### Table of Contents



Financial
    Instruments Market Risk Disclosures
  Foreign
    Currency Risk Management
     available-for-sale
 75




---



##### Table of Contents



Interest
    Rate Risk Management
     Critical
    Accounting Policies and Other Matters
    Revenue
    Recognition
  76




---



##### Table of Contents



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

2008

2007Balance, January 1

$
699.4

$
757.1Current provision


2,037.5


2,109.7Adjustments to prior years


(13.7)


(14.1)Payments


(2,106.9)


(2,153.3)Balance, December 31

$
616.3

$
699.4     over-the-counter
   77




---



##### 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 Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
 78




---



##### Table of Contents



Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Fosamax Fosamax Fosamax Fosamax Fosamax Fosamax Fosamax
    and/or
   79




---



##### Table of Contents



Share-Based
    Compensation
   Pensions
    and Other Postretirement Benefit Plans
          80




---



##### Table of Contents



Acquisitions
 Business Combinations
    Business Combinations Recently Issued Accounting Standards
  Restructuring
    Costs
  81




---



##### Table of Contents



Impairments
    of Long-Lived Assets
   Accounting for
    the Impairment or Disposal of Long-Lived Assets
  Goodwill and
    Other Intangible Assets,
  Impairments
    of Investments
   Fair
    Value Measurements
 Fair Value Measurements redeemed-in-kind redemption-in-kind
 82




---



##### Table of Contents



Taxes on
    Income
     Recently
    Issued Accounting Standards
    Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51
  No. 07-1, Accounting for Collaborative Arrangements (EITF 07-1). EITF 07-1, EITF 07-1
 83




---



##### Table of Contents



EITF 07-1
  Disclosures about Derivative Instruments and Hedging
    Activities
  EITF 03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions are Participating Securities EITF 03-6-1), EITF 03-6-1 EITF 03-6-1
  EITF 08-6, Equity Method Investment Accounting Considerations (EITF 08-6). EITF 08-6 EITF 08-6
  EITF 08-7, Accounting for Defensive Intangible Assets (EITF 08-7). EITF 08-7 EITF 08-7
  Employers Disclosures about
    Postretirement Benefit Plan Assets
  Cautionary
    Factors That May Affect Future Results
   84




---



##### Table of Contents



Forms 10-K, 10-Q 8-K. Form 10-K
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk.   85




---



##### 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)
  2008


2007


2006Sales


$23,850.3



$24,197.7



$22,636.0Costs, Expenses and OtherMaterials and production


5,582.5



6,140.7



6,001.1Marketing and administrative


7,377.0



7,556.7



8,165.4Research and development


4,805.3



4,882.8



4,782.9Restructuring costs


1,032.5



327.1



142.3Equity income from affiliates


(2,560.6
)


(2,976.5
)


(2,294.4
)U.S. VioxxSettlement Agreement charge


-



4,850.0



-Other (income) expense, net


(2,194.2
)


46.2



(382.7
)14,042.5



20,827.0



16,414.6Income Before Taxes


9,807.8



3,370.7



6,221.4Taxes on Income


1,999.4



95.3



1,787.6Net Income


$7,808.4



$3,275.4



$4,433.8Basic Earnings per Common Share


$3.66



$1.51



$2.04Earnings per Common Share Assuming Dilution


$3.64



$1.49



$2.03   Consolidated
    Statement of Retained Earnings
  Years Ended December 31
 ($ in millions)
  2008


2007


2006Balance, January 1

$
39,140.8


$
39,095.1


$
37,980.0Cumulative Effect of Adoption of FIN 48


-



81.0



-Net Income


7,808.4



3,275.4



4,433.8Dividends Declared on Common Stock


(3,250.4
)


(3,310.7
)


(3,318.7
)Balance, December 31

$
43,698.8


$
39,140.8


$
39,095.1   Consolidated
    Statement of Comprehensive Income
  Years Ended December 31
 ($ in millions)
  2008


2007


2006Net Income

$
7,808.4


$
3,275.4


$
4,433.8Other Comprehensive (Loss) IncomeNet unrealized gain (loss) on derivatives, net of tax and net
    income realization


151.6



(4.4
)


(50.9
)Net unrealized (loss) gain on investments, net of tax and net
    income realization


(80.5
)


58.0



26.1Benefit plan net (loss) gain and prior service cost (credit),
    net of tax and amortization


(1,761.7
)


240.3



-Minimum pension liability, net of tax


-



-



22.5Cumulative translation adjustment relating to equity investees,
    net of tax


(37.2
)


44.3



18.9(1,727.8
)


338.2



16.6Comprehensive Income

$
6,080.6


$
3,613.6


$
4,450.4   The accompanying notes are an integral part of these
    consolidated financial statements.
 86




---



##### Table of Contents



Consolidated Balance Sheet
  December 31
 ($ in millions)
  2008


2007AssetsCurrent AssetsCash and cash equivalents

$
4,368.3


$
5,336.1Short-term investments


1,118.1



2,894.7Accounts receivable (including non-trade receivables of $871.2
    in 2008 and $906.0 in 2007)


3,778.9



3,636.2Inventories (excludes inventories of $395.0 in 2008 and $345.2
    in 2007 classified in Other assets  see Note 6)


2,283.3



1,881.0Deferred income taxes and other current assets


7,756.3



1,297.4Total current assets


19,304.9



15,045.4Investments


6,491.3



7,159.2Property, Plant and Equipment (at cost)Land


386.1



405.8Buildings


9,767.4



10,048.0Machinery, equipment and office furnishings


13,103.7



13,553.7Construction in progress


871.0



795.624,128.2



24,803.1Less allowance for depreciation


12,128.6



12,457.111,999.6



12,346.0Goodwill


1,438.7



1,454.8Other Intangibles, Net


525.4



713.2Other Assets


7,435.8



11,632.1$
47,195.7


$
48,350.7Liabilities and Stockholders EquityCurrent LiabilitiesLoans payable and current portion of long-term debt

$
2,297.1


$
1,823.6Trade accounts payable


617.6



624.5Accrued and other current liabilities


9,174.1



8,534.9Income taxes payable


1,426.4



444.1Dividends payable


803.5



831.1Total current liabilities


14,318.7



12,258.2Long-Term Debt


3,943.3



3,915.8Deferred Income Taxes and Noncurrent Liabilities


7,766.6



11,585.3Minority Interests


2,408.8



2,406.7Stockholders EquityCommon stock, one cent par valueAuthorized  5,400,000,000 sharesIssued  2,983,508,675 shares  2008
    and 2007


29.8



29.8Other paid-in capital


8,319.1



8,014.9Retained earnings


43,698.8



39,140.8Accumulated other comprehensive loss


(2,553.9
)


(826.1
)49,493.8



46,359.4Less treasury stock, at cost875,818,333 shares  2008811,005,791 shares  2007


30,735.5



28,174.7Total stockholders equity


18,758.3



18,184.7$
47,195.7


$
48,350.7   The accompanying notes are an integral part of this
    consolidated financial statement.
 87




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##### Table of Contents



Consolidated Statement of Cash Flows
  Years Ended December 31
 ($ in millions)
  2008


2007


2006Cash Flows from Operating ActivitiesNet income

$
7,808.4


$
3,275.4


$
4,433.8Adjustments to reconcile net income to net cash provided by
    operating activities:Gain on distribution from AstraZeneca LP


(2,222.7
)


-



-Equity income from affiliates


(2,560.6
)


(2,976.5
)


(2,294.4
)Dividends and distributions from equity affiliates


4,289.6



2,485.6



1,931.9U.S. VioxxSettlement Agreement charge


-



4,850.0



-Depreciation and amortization


1,631.2



1,988.2



2,268.4Deferred income taxes


530.1



(1,781.9
)


(530.2
)Share-based compensation


348.0



330.2



312.5Acquired research


-



325.1



762.5Taxes paid for Internal Revenue Service settlement


-



(2,788.1
)


-Other


731.7



(64.7
)


18.1Net changes in assets and liabilities:Accounts receivable


(889.4
)


(290.7
)


(709.3
)Inventories


(452.1
)


(40.7
)


226.5Trade accounts payable


-



117.7



16.4Accrued and other current liabilities


(1,710.9
)


451.1



461.6Income taxes payable


(465.3
)


987.2



(138.2
)Noncurrent liabilities


(108.0
)


26.2



(125.6
)Other


(358.3
)


105.1



131.2Net Cash Provided by Operating Activities


6,571.7



6,999.2



6,765.2Cash Flows from Investing ActivitiesCapital expenditures


(1,298.3
)


(1,011.0
)


(980.2
)Purchases of securities and other investments


(11,967.3
)


(10,132.7
)


(19,591.3
)Proceeds from sales of securities and other investments


11,065.8



10,860.2



16,143.8Acquisitions of subsidiaries, net of cash acquired


-



(1,135.9
)


(404.9
)Distribution from AstraZeneca LP


1,899.3



-



-Increase in restricted assets


(1,629.7
)


(1,401.1
)


(48.1
)Other


95.8



10.5



(3.0
)Net Cash Used by Investing Activities


(1,834.4
)


(2,810.0
)


(4,883.7
)Cash Flows from Financing ActivitiesNet change in short-term borrowings


1,859.9



11.4



(1,522.8
)Proceeds from issuance of debt


-



-



755.1Payments on debt


(1,392.0
)


(1,195.3
)


(506.2
)Purchases of treasury stock


(2,725.0
)


(1,429.7
)


(1,002.3
)Dividends paid to stockholders


(3,278.5
)


(3,307.3
)


(3,322.6
)Proceeds from exercise of stock options


102.3



898.6



369.9Other


(89.2
)


156.2



(375.3
)Net Cash Used by Financing Activities


(5,522.5
)


(4,866.1
)


(5,604.2
)Effect of Exchange Rate Changes on Cash and Cash Equivalents


(182.6
)


98.3



52.1Net Decrease in Cash and Cash Equivalents


(967.8
)


(578.6
)


(3,670.6
)Cash and Cash Equivalents at Beginning of Year


5,336.1



5,914.7



9,585.3Cash and Cash Equivalents at End of Year

$
4,368.3


$
5,336.1


$
5,914.7   The accompanying notes are an integral part of this
    consolidated financial statement.
 88




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##### Table of Contents



Notes to Consolidated Financial Statements
  ($ in millions except per share amounts)
  1.
    Nature of
    Operations    2.
    Summary
    of Accounting Policies  Principles of Consolidation 
  Foreign Currency Translation 
  Cash Equivalents 
  Inventories  last-in, first-in,
  Investments  available-for-sale Fair Value Measurements
 89




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##### Table of Contents



other-than-temporary,
  Revenue Recognition  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
 90




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##### Table of Contents



Business Combinations Recently
    Issued Accounting Standards
  Goodwill and Other Intangibles 
  Research and Development  No. 07-3, Accounting for Advance Payments for Goods or Services
    Received for Use in Future Research and Development Activities, Recently Issued Accounting Standards
  Share-Based Compensation 
  Restructuring Costs  , Accounting for Costs Associated with Exit or
    Disposal Activities. Employers Accounting for
    Postemployment Benefits  an amendment of FASB
    Statement No. 5 and 43 Employers Accounting for Settlements and Curtailments
    of Defined Benefit Pension Plans for Termination Benefits Accounting for
    the Impairment and Disposal of Long-Lived Assets.
  Contingencies and Legal Defense Costs  Accounting for
    Contingencies
  Taxes on Income 
  Use of Estimates 
 91




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##### Table of Contents



Reclassifications 
  Recently Adopted Accounting Standards  Fair
    Value Measurements The Fair Value Option for Financial Assets and
    Financial Liabilities  including an amendment of FASB
    Statement No. 115 The Hierarchy of Generally Accepted Accounting
    Principles No. 07-3, Accounting for Advance Payments for Goods or Services
    Received for Use in Future Research and Development Activities (EITF 07-3) FAS 140-4 Disclosures by Public Entities
    (Enterprises) about Transfers of Financial Assets and Interests
    in Variable Interest Entities FAS 140-4
  157-2, Effective Date of FASB Statement No. 157 (FSP 157-2), FSP 157-2 157-3, Determining the Fair Value of a Financial Asset When the
    Market for That Asset Is Not Active (FSP 157-3), FSP 157-3
      EITF 07-03, EITF 07-3 EITF 07-3 EITF 07-3
  FAS 140-4 Accounting for Transfers and Servicing of Financial Assets
    and Extinguishment of Liabilities, FAS 140-4 FIN 46(R)-8 Consolidation
    of Variable Interest Entities FAS 140-4
  Recently Issued Accounting Standards  Business
    Combinations Noncontrolling Interests in Consolidated
    Financial Statements  an amendment of ARB No. 51 , , Disclosures about Derivative Instruments and
    Hedging Activities , EITF 03-6-1 ,
    Determining Whether Instruments Granted in Share-Based Payment
    Transactions Are Participating Securities EITF 03-6-1), Employers Disclosures
    about Postretirement Benefit Plan Assets No. 07-1, Accounting for Collaborative Arrangements (EITF 07-1), No. 08-6,
 92




---



##### Table of Contents



Equity Method Investment Accounting Considerations (EITF 08-6) No. 08-7, Accounting for Defensive Intangible Assets (EITF 08-7).
        EITF 03-6-1, EITF 03-6-1
  Employers
    Disclosures about Pensions and other Postretirement
    Benefits
  EITF 07-1, EITF 07-1 EITF 07-1
  EITF 08-6,
  EITF 08-7, EITF 08-7
 93




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##### Table of Contents



3.
    Restructuring  2008
    Global Restructuring Program
     2005
    Global Restructuring Program
    94




---



##### Table of Contents



Separation


AcceleratedYear Ended December 31,
    2008

Costs


Depreciation


Other


Total2008 Restructuring ProgramMaterials and production

$
-


$
33.7


$
25.0


$
58.7Research and development


-



127.1



-



127.1Restructuring costs


684.9



-



50.6



735.5684.9



160.8



75.6



921.32005 Restructuring ProgramMaterials and production


-



55.0



9.5



64.5Research and development


-



0.9



0.4



1.3Restructuring costs


272.4



-



24.6



297.0272.4



55.9



34.5



362.8$
957.3


$
216.7


$
110.1


$
1,284.1Year Ended December 31, 2007Materials 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


$
935.5        95




---



##### Table of Contents



Separation


AcceleratedCosts


Depreciation


Other


Total2008 Restructuring ProgramRestructuring reserves as of January 1, 2008

$
-


$
-


$
-


$
-Expense


684.9



160.8



75.6



921.3(Payments) receipts, net


(77.2
)


-



(37.3
)


(114.5
)Non-cash activity


-



(160.8
)


(38.3
)


(199.1
)Restructuring reserves as of December 31,
    2008(1)

$
607.7


$
-


$
-


$
607.72005 Restructuring ProgramRestructuring reserves as of January 1, 2007

$
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

$
231.5


$
-


$
-


$
231.5Expense

$
272.4


$
55.9


$
34.5


$
362.8(Payments) receipts, net


(389.1
)


-



(23.2
)(2)


(412.3
)Non-cash activity


-



(55.9
)


(11.3
)


(67.2
)Restructuring reserves as of December 31,
    2008(1)

$
114.8


$
-


$
-


$
114.8   (1)
    The cash outlays associated with the restructuring reserve
    for the 2008 Restructuring Program are expected to be completed
    by the end of 2011. The cash outlays associated with the
    remaining restructuring reserve for the 2005 Restructuring
    Program are expected to be largely completed by the end of
    2009.(2)
    Includes proceeds from the sales of facilities in connection
    with the 2005 Restructuring Program.  4.
    Research
    Collaborations, Acquisitions and License Agreements       96




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##### Table of Contents



and/or and/or
           97




---



##### Table of Contents



,
    in-silico
 98




---



##### Table of Contents



5.
    Financial
    Instruments and Fair Value  Foreign
    Currency Risk Management
     de minimis
 99




---



##### Table of Contents



available-for-sale
    Interest
    Rate Risk Management
    100




---



##### Table of Contents



Fair
    Value Measurements
 FSP 157-2 FSP 157-3,
  Level 1
  Level 2
  Level 3 redeemed-in-kind
   101




---



##### Table of Contents



Financial
    Assets and Liabilities Measured at Fair Value on a Recurring
    Basis
   2008Fair Value Measurements Using


2007Quoted Prices


SignificantIn Active


Other


SignificantMarkets for


Observable


UnobservableCarrying


Identical Assets


Inputs


Inputs





Carrying


Fair($ in millions)

Value


(Level 1)


(Level 2)


(Level 3)


Total


Value


ValueAssetsInvestmentsCorporate notes and bonds

$
3,093.2


$
-


$
3,093.2


$
-


$
3,093.2


$
5,465.0


$
5,465.0U.S. government and agency securities


2,885.7



-



2,885.7



-



2,885.7



1,748.4



1,748.4Mortgage-backed
    securities(1)


723.9



-



723.9



-



723.9



760.0



760.0Municipal securities


-



-



-



-



-



744.6



744.6Foreign government bonds


319.4



-



319.4



-



319.4



269.9



269.9Asset-backed
    securities(1)


306.7



-



306.7



-



306.7



313.2



313.2Equity securities


144.7



71.1



73.6



-



144.7



150.8



150.8Commercial paper


133.0



-



133.0



-



133.0



258.1



258.1Other debt securities


2.8



-



2.8



-



2.8



343.9



343.9Total Investments

$
7,609.4


$
71.1


$
7,538.3


$
-


$
7,609.4


$
10,053.9


$
10,053.9Other
    assets(2)

$
2,974.5


$
-


$
2,877.9


$
96.6


$
2,974.5


$
958.6


$
958.6Derivative
    assets(3)Purchased currency options

$
451.3


$
-


$
451.3


$
-


$
451.3


$
59.9


$
59.9Forward exchange contracts


73.2



-



73.2



-



73.2



62.1



62.1Interest rate swaps


23.9



-



23.9



-



23.9



108.0



108.0Total Deriviative Assets

$
548.4


$
-


$
548.4


$
-


$
548.4


$
230.0


$
230.0LiabilitiesDerivative
    liabilities(3)Written currency options

$
1.9


$
-


$
1.9


$
-


$
1.9


$
8.8


$
8.8Forward exchange contracts


273.1



-



273.1



-



273.1



35.8



35.8Total Derivative Liabilities

$
275.0


$
-


$
275.0


$
-


$
275.0


$
44.6


$
44.6   (1)
    Mortgage-backed securities represent AAA rated securities
    issued or unconditionally guaranteed as to payment of principal
    and interest by U.S. government agencies. Substantially all of
    the asset-backed securities are highly-rated
    (Standard & Poors rating of AAA and Moodys
    Investors Service rating of Aaa), secured primarily by credit
    card, auto loan, and home equity receivables, with
    weighted-average lives of primarily 5 years or less.(2)
    Other assets represent a portion of the pledged collateral
    discussed below and in Note 15. Level 2 Other assets
    are comprised of $987.4 million of corporate notes and
    bonds, $792.5 million of municipal securities,
    $357.3 million of commercial paper, $276.0 million of
    mortgage-backed securities, $240.1 million of U.S.
    government and agency securities and $224.6 million of
    asset-backed securities.(3)
    The fair value determination of derivatives includes an
    assessment of the credit risk of counterparties to the
    derivatives and the Companys own credit risk, the effects
    of which were not significant.  Level 3
    Valuation Techniques
  102




---



##### Table of Contents



and/or
  Total Realized and






LossesUnrealized Losses






Recorded inNet


Purchases,


Included in:






Earnings forBeginning


Transfers


Sales,





Compre-


Ending



Level 3 AssetsBalance


(Out) of


Settlements,





hensive


Balance



Still Held at($ in millions)

January 1


Level
    3(1)


Net


Earnings(2)


Income


December 31



December 31Other assets

$
958.6


$
(684.5
)

$
(132.8
)

$
(43.6
)

$
(1.1
)

$
96.6



$
(44.3
)Other debt securities


314.5



(314.5
)


-



-



-



-




-Total

$
1,273.1


$
(999.0
)

$
(132.8
)

$
(43.6
)

$
(1.1
)

$
96.6



$
(44.3
)   (1)
    Transfers in and out of Level 3 are deemed to occur at
    the beginning of the quarter in which the transaction takes
    place.(2)
    Amounts are recorded in Other (income) expense, net, in the
    Consolidated Statement of Income.  redeemed-in-kind redemption-in-kind
  Financial
    Instruments not Measured at Fair Value
     ,
  2008


2007Gross Unrealized


Gross UnrealizedGains(1)


Losses(1)


Gains


LossesCorporate notes and bonds

$
31.6


$
(65.3
)

$
28.4


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


67.4



(3.2
)


32.2



(0.1
)Mortgage-backed securities


12.5



(5.0
)


8.9



-Municipal securities


28.4



(0.3
)


13.3



(0.2
)Asset-backed securities


0.6



(20.7
)


1.8



(1.4
)Foreign government bonds


13.5



-



0.7



(0.6
)Other debt securities


1.5



(3.4
)


14.5



-Equity securities


17.7



(3.1
)


97.0



(5.5
)$
173.2


$
(101.0
)

$
196.8


$
(28.5
)   (1)

    At December 31, 2008, gross unrealized gains and gross
    unrealized losses related to amounts pledged as collateral (see
    below and Note 15) were $36.1 million and
    $(30.3) million, respectively. 103




---



##### Table of Contents



de minimis.
  Letter of
    Credit
 Vioxx
  Concentrations
    of Credit Risk
     6.
    Inventories    2008


2007Finished goods

$
432.6


$
382.9Raw materials and work in process


2,147.1



1,732.2Supplies


98.6



111.1Total (approximates current cost)


2,678.3



2,226.2Reduction to LIFO costs


-



-$
2,678.3


$
2,226.2Recognized as:Inventories

$
2,283.3


$
1,881.0Other assets


395.0



345.2    104




---



##### Table of Contents



7.
    Other
    Intangibles    2008


2007Patents and product rights

$
1,656.4


$
1,656.3Other


779.2



781.0Total acquired cost


2,435.6



2,437.3Patents and product rights

$
1,528.5


$
1,449.4Other


381.7



274.7Total accumulated amortization


1,910.2



1,724.1$
525.4


$
713.2     8.
    Joint
    Ventures and Other Equity Method Affiliates    Years Ended December
    31

2008


2007


2006Merck/Schering-Plough

$
1,536.3


$
1,830.8


$
1,218.6AstraZeneca LP


598.4



820.1



783.7Other(1)


425.9



325.6



292.1$
2,560.6


$
2,976.5


$
2,294.4   (1)

    Primarily reflects results from Merial Limited, Sanofi
    Pasteur MSD and Johnson & Johnson°Merck Consumer
    Pharmaceuticals Company.  Merck/Schering-Plough
 Zetia Ezetrol Zetia Zocor Vytorin Inegy
  Zetia Vytorin Zetia
 105




---



##### Table of Contents



Zetia Vytorin
  Singulair Zetia
    Years Ended December
    31

2008


2007


2006Sales

$
4,561.1


$
5,186.2


$
3,884.1Vytorin


2,360.0



2,779.1



1,955.3Zetia


2,201.1



2,407.1



1,928.8Materials and production costs


176.3



216.0



179.0Other expense, net


1,230.1



1,307.2



1,217.1Income before taxes

$
3,154.7


$
3,663.0


$
2,488.0Mercks share of income before
    taxes(1)

$
1,489.5


$
1,832.5


$
1,214.5   December 31

2008


2007Total
    assets(2)

$
608.0



$1,014.0Total
    liabilities(2)


488.0



656.0
   (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, including the $105 million milestone payment
    discussed above and other milestone payments.(2)
    Amounts are comprised almost entirely of current balances.  AstraZeneca
    LP
 Prilosec,
   106




---



##### Table of Contents



Nexium, Prilosec
  Nexium Prilosec Nexium Prilosec Nexium Prilosec true-up
  true-up True-Up True-Up
  True-Up True-Up
 107




---



##### Table of Contents



Years Ended December
    31

2008


2007


2006Sales

$
5,450.4


$
6,345.4


$
6,753.0Materials and production costs


2,682.4



3,364.0



3,940.4Other expense, net


1,408.1



1,090.1



1,131.6Income before taxes


1,359.9



1,891.3



1,681.0December 31

2008


2007Current assets

$
2,023.9


$
5,360.7Noncurrent assets


359.0



437.0Total liabilities (all current)


3,054.4



2,231.1     Merial
    Limited
   Sanofi
    Pasteur MSD
   Johnson &
    Johnson°Merck Consumer Pharmaceuticals Company
 Pepcid AC Pepcid Pepcid Complete
   108




---



##### Table of Contents



Years Ended December
    31

2008


2007


2006Sales

$
4,860.4


$
4,218.6


$
3,640.7Materials and production costs


1,553.6



1,346.9



1,189.3Other expense, net


2,297.9



1,995.2



1,693.3Income before taxes


1,008.9



876.5



758.1   December 31

2008


2007Current assets

$
1,935.8



$2,113.2Noncurrent assets


1,174.4



1,139.5Current liabilities


1,152.6



1,295.8Noncurrent liabilities


266.5



280.8
   9.
    Loans
    Payable, Long-Term Debt and Other Commitments  18-month,
    2008


20074.75% notes due 2015

$
1,078.3


$
1,068.14.375% notes due 2013


530.0



524.46.4% debentures due 2028


499.3



499.35.75% notes due 2036


497.8



497.75.95% debentures due 2028


497.2



497.15.125% notes due 2011


273.7



258.86.3% debentures due 2026


248.0



247.9Other


319.0



322.5$
3,943.3


$
3,915.8        109




---



##### Table of Contents



5-year
    10.
    Contingencies
    and Environmental Liabilities      VioxxLitigation
  Product
    Liability Lawsuits
 and/or Vioxx Vioxx and/or Vioxx
  Vioxx
 110




---



##### Table of Contents



Vioxx
  Vioxx Vioxx
           111




---



##### Table of Contents



Vioxx Vioxx
      Vioxx Vioxx
 112




---



##### Table of Contents



en banc
    Vioxx Vioxx Vioxx
  Other
    Lawsuits
 Vioxx Vioxx Vioxx
    Vioxx Vioxx. Vioxx.
 113




---



##### Table of Contents



qui tam Vioxx Vioxx Vioxx and/or and/or
    Shareholder
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx Vioxx en banc,
  Vioxx Vioxx
 114




---



##### Table of Contents



Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx and/or
  Vioxx Vioxx
  International
    Lawsuits
 Vioxx Vioxx
  Vioxx Vioxx
 115




---



##### Table of Contents



Vioxx Vioxx Vioxx
  Vioxx
  Additional
    Lawsuits
 Vioxx Vioxx Vioxx Vioxx and/or
  Insurance
 Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx Vioxx
  Investigations
 Vioxx. Vioxx
 116




---



##### Table of Contents



Vioxx Vioxx and/or
  Vioxx.
  Vioxx
  Reserves
 Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx Vioxx
  Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
 117




---



##### Table of Contents



Vioxx Vioxx Vioxx Vioxx Vioxx Vioxx
  Vioxx
  Other
    Product Liability Litigation
  Fosamax Fosamax and/or and/or Fosamax Fosamax Fosamax Fosamax and/or Daubert
  Fosamax Fosamax
  Fosamax
  Fosamax Fosamax Fosamax
 118




---



##### Table of Contents



Fosamax Fosamax Fosamax Fosamax
  Commercial
    Litigation
    Governmental
    Proceedings
    Vytorin/ZetiaLitigation
  Vytorin
 119




---



##### Table of Contents



Vytorin Vytorin Vytorin Zetia and/or
  Vytorin Vytorin Vytorin Vytorin Vytorin Vytorin
  Vytorin
  Vaccine
    Litigation
   120




---



##### Table of Contents



and/or M-M-R M-M-R M-M-R M-M-R
  Patent
    Litigation
  Fosamax,
    Nexium, Singulair, Primaxin Emend Nexium Zetia Fosamax Singulair Primaxin Nexium Zetia
  Zetia Zetia Zetia
 121




---



##### Table of Contents



Primaxin
  Singulair
  Fosamax Fosamax Fosamax Plus D Fosamax Fosamax Plus D
    Fosamax
    Trusopt Cosopt
  Nexium
  Nexium
 122




---



##### Table of Contents



Nexium
  Emend
  Cozaar
  Other
    Litigation
         123




---



##### Table of Contents



Environmental
    Matters
  de minimis
      11.
    Stockholders
    Equity   124




---



##### Table of Contents



2008


2007


2006Shares


Cost


Shares


Cost


Shares


CostBalance as of January 1


811.0


$
28,174.7



808.4


$
27,567.4



794.3


$
26,984.4Purchases


69.5



2,725.0



26.5



1,429.7



26.4



1,002.3Issuances
    (1)


(4.7
)


(164.2
)


(23.9
)


(822.4
)


(12.3
)


(419.3
)Balance as of December 31


875.8


$
30,735.5



811.0


$
28,174.7



808.4


$
27,567.4   (1)
    
    Issued primarily under
    share-based compensation plans.    12.
    Share-Based
    Compensation Plans      Share-Based
    Payment, Transition Election Related to
    Accounting for the Tax Effects of Share-Based Payment
    Awards
   125




---



##### Table of Contents



Years Ended December
    31

2008


2007


2006Expected dividend yield


3.5
%


3.4
%


4.2
%Risk-free interest rate


2.7
%


4.4
%


4.6
%Expected volatility


31.0
%


24.6
%


26.5
%Expected life (years)


6.1



5.7



5.7     WeightedWeighted


AverageAverage


Remaining


AggregateNumber


Exercise


Contractual


Intrinsicof Options


Price


Term


ValueBalance as of January 1, 2008


243,014.1


$
53.47Granted


35,542.7



43.35Exercised


(2,856.4
)


35.83Forfeited


(28,049.1
)


59.97Outstanding as of December 31, 2008


247,651.3


$
51.50



5.17


$
13.7Exercisable as of December 31, 2008


180,678.1


$
54.63



3.95


$
13.3     Years Ended December
    31

2008


2007


2006Total intrinsic value of stock options exercised

$
40.3


$
301.2


$
67.3Fair value of stock options vested

$
259.0


$
251.1


$
857.4Cash received from the exercise of stock options

$
102.3


$
898.6


$
369.9     RSUs


PSUs(1)Weighted





WeightedAverage





AverageNumber


Grant Date


Number


Grant Dateof Shares


Fair Value


of Shares


Fair ValueNonvested as of January 1, 2008


5,423.3


$
37.26



1,406.8


$
37.75Granted


3,337.6



37.81



742.2



44.30Vested


(2,267.9
)


31.68



(416.3
)


31.99Forfeited


(200.8
)


41.91



(111.3
)


43.14Nonvested at December 31, 2008


6,292.2


$
39.41



1,621.4


$
41.86  (1)

    The PSU rollforward excludes 83.2 thousand additional shares
    that were ultimately issued/vested during 2008 in connection
    with PSUs granted in 2005 that exceeded anticipated performance
    targets.   126




---



##### Table of Contents



13.
    Pension
    and Other Postretirement Benefit Plans      Other PostretirementPension Benefits


BenefitsYears Ended December
    31

2008


2007


2006


2008


2007


2006Service cost

$
344.1


$
377.2


$
363.7


$
73.2


$
90.8


$
91.3Interest cost


414.2



379.9



341.3



113.8



107.7



100.1Expected return on plan assets


(559.4
)


(491.4
)


(436.8
)


(129.0
)


(130.5
)


(112.6
)Net amortization


70.4



149.4



169.4



(22.6
)


(16.8
)


1.9Termination benefits


62.3



25.6



29.7



11.2



7.7



3.6Curtailments


5.7



1.1



-



(15.9
)


(16.8
)


(2.6
)Settlements


8.6



5.4



14.7



-



-



-Net pension and other postretirement cost

$
345.9


$
447.2


$
482.0


$
30.7


$
42.1


$
81.7          127




---



##### Table of Contents



Pension Benefits


Other Postretirement Benefits2008


2007


2008


2007Fair value of plan assets at January 1

$
7,385.4


$
7,056.7


$
1,577.6


$
1,484.2Actual return on plan assets


(2,049.7
)


498.4



(512.0
)


95.0Company contributions


1,115.8



185.3



70.2



44.8Benefits paid from plan assets


(568.2
)


(362.5
)


(47.4
)


(46.4
)Other


4.3



7.5



-



-Fair value of plan assets at December 31

$
5,887.6


$
7,385.4


$
1,088.4


$
1,577.6Benefit obligation at January 1

$
7,049.4


$
6,926.8


$
1,936.8


$
1,821.8Service cost


344.1



377.2



73.2



90.8Interest cost


414.2



379.9



113.8



107.7Actuarial losses (gains)


167.8



(242.9
)


(136.4
)


(12.7
)Benefits paid


(643.2
)


(391.8
)


(76.7
)


(80.1
)Plan amendments


-



(20.9
)


(180.6
)


(8.0
)Curtailments


(249.6
)


(5.6
)


6.0



9.6Termination benefits


62.3



25.6



11.2



7.7Other


(4.9
)


1.1



-



-Benefit obligation at December 31

$
7,140.1


$
7,049.4


$
1,747.3


$
1,936.8Funded status at December 31

$
(1,252.5
)

$
336.0


$
(658.9
)

$
(359.2
)Recognized as:Other assets

$
142.4


$
1,132.3


$
147.7


$
387.9Accrued and other current liabilities


(46.8
)


(37.3
)


(3.4
)


(3.8
)Deferred income taxes and noncurrent liabilities


(1,348.1
)


(759.0
)


(803.2
)


(743.3
)       OtherPension Benefits


Postretirement BenefitsTarget


2008


2007


Target


2008


2007U.S. equities


36
%


36
%


38
%


55
%


53
%


55%International equities


31
%


25
%


34
%


26
%


21
%


29%Fixed-income investments


28
%


32
%


24
%


17
%


23
%


16%Real estate and other investments


4
%


4
%


3
%


0
%


0
%


0%Cash and cash equivalents


1
%


3
%


1
%


2
%


3
%


0%100
%


100
%


100
%


100
%


100
%


100%    128




---



##### Table of Contents



OtherPension


PostretirementBenefits


Benefits2009

$
320.1


$
79.52010


328.4



86.02011


357.5



92.42012


388.4



97.72013


421.3



103.32014 - 2018


2,759.2



606.8         Employers Accounting for
    Defined Benefit Pension and Other Postretirement Plans, an
    amendment of FASB Statements No. 87, 106 and 132R
 129




---



##### Table of Contents



OtherPension


PostretirementYear Ended December 31,
    2008

Plans


Benefit Plans


TotalNet loss arising during the period

$
(2,586.0
)

$
(509.3
)

$
(3,095.3
)Prior service credit arising during the period


10.6



157.7



168.3$
(2,575.4
)

$
(351.6
)

$
(2,927.0
)Net loss amortization included in benefit cost

$
50.8


$
26.1


$
76.9Prior service cost (credit) amortization included in benefit
    cost


7.6



(48.7
)


(41.1
)$
58.4


$
(22.6
)

$
35.8Year Ended December 31, 2007Net gain (loss) arising during the period

$
269.1


$
(16.5
)

$
252.6Prior service credit (cost) arising during the period


21.4



(21.2
)


0.2$
290.5


$
(37.7
)

$
252.8Net loss amortization included in benefit cost

$
139.3


$
26.6


$
165.9Prior service cost (credit) amortization included in benefit cost


12.1



(43.4
)


(31.3
)$
151.4


$
(16.8
)

$
134.6       U.S. Pension and OtherPostretirementPension Plans


Benefit PlansDecember 31

2008


2007


2006


2008


2007


2006Net costDiscount rate


5.90%



5.35%



5.15%



6.50%



6.00%



5.75%Expected rate of return on plan assets


7.65%



7.65%



7.65%



8.75%



8.75%



8.75%Salary growth rate


4.30%



4.20%



4.20%



4.50%



4.50%



4.50%Benefit obligationDiscount rate


5.75%



5.90%



5.35%



6.20%



6.50%



6.00%Salary growth rate


4.25%



4.30%



4.20%



4.50%



4.50%



4.50%    130




---



##### Table of Contents



December 31

2008


2007Health 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


2016



2015     One PercentagePointIncrease


DecreaseEffect on total service and interest cost components

$
32.9


$
(26.1
)Effect on benefit obligation

$
250.0


$
(204.5
)   14.
    Other
    (Income) Expense, Net  Years Ended December
    31

2008


2007


2006Interest income

$
(631.4
)

$
(741.1
)

$
(764.3
)Interest expense


251.3



384.3



375.1Exchange losses (gains)


147.4



(54.3
)


(25.0
)Minority interests


123.9



121.4



120.5Other, net


(2,085.4
)


335.9



(89.0
)$
(2,194.2
)

$
46.2


$
(382.7
)   Aggrastat Vioxx
 131




---



##### Table of Contents



15.
    Taxes on
    Income    2008


2007


2006Amount


Tax Rate


Amount


Tax Rate


Amount


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

$
3,432.7



35.0
%

$
1,179.8



35.0
%

$
2,177.5



35.0
%Differential arising from:Foreign earnings


(1,155.2
)


(11.7
)


(1,196.0
)


(35.5
)


(1,024.1
)


(16.5
)Foreign tax credit utilization


(192.0
)


(2.0
)


-



-



-



-State tax settlements


(191.6
)


(2.0
)


-



-



-



-Tax exemption for Puerto Rico operations


-



-



-



-



(87.6
)


(1.4
)State taxes


310.9



3.2



11.6



0.3



129.6



2.1Acquired research


-



-



113.8



3.4



266.9



4.3Other
    (1)


(205.4
)


(2.1
)


(13.9
)


(0.4
)


325.3



5.2$
1,999.4



20.4
%

$
95.3



2.8
%

$
1,787.6



28.7
%  (1)

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

2008


2007


2006Domestic

$
5,086.2


$
(2,647.2
)

$
2,124.4Foreign


4,721.6



6,017.9



4,097.0$
9,807.8


$
3,370.7


$
6,221.4     Years Ended December
    31

2008


2007


2006Current provisionFederal

$
1,053.6


$
988.1


$
1,618.4Foreign


292.4



687.0



458.3State


123.3



202.2



241.11,469.3



1,877.3



2,317.8Deferred provisionFederal


419.0



(1,671.5
)


(374.1
)Foreign


55.8



157.2



(130.3
)State


55.3



(267.7
)


(25.8
)530.1



(1,782.0
)


(530.2
)$
1,999.4


$
95.3


$
1,787.6  132




---



##### Table of Contents



2008


2007Assets


Liabilities


Assets


LiabilitiesOther intangibles

$
-


$
177.3


$
-


$
229.7Inventory related


248.6



-



267.4



9.0Accelerated depreciation


-



1,045.1



-



1,096.3Advance payment


-



-



338.6



-Equity investments


-



75.1



-



690.2Pensions and other postretirement benefits


796.5



129.9



239.3



184.0Compensation related


347.5



-



374.8



-VioxxLitigation reserve


1,755.1



-



2,130.0



-Unrecognized tax benefits


984.1



-



980.8



-Net operating losses


224.7



-



339.5



-Other


1,012.9



60.2



899.1



8.7Subtotal


5,369.4



1,487.6



5,569.5



2,217.9Valuation allowance


(94.2
)






(94.0
)Total deferred taxes

$
5,275.2


$
1,487.6


$
5,475.5


$
2,217.9Net deferred income taxes

$
3,787.6






$
3,257.6Recognized as:Deferred income taxes and other current assets

$
2,436.9






$
829.5Other assets


1,666.7







2,823.7Income taxes payable





$
3.8






$
-Deferred income taxes and noncurrent liabilities






312.2







395.6       Accounting for Uncertainty
    in Income Taxes  an interpretation of FASB Statement
    No. 109,
 133




---



##### Table of Contents



2008


2007Balance as of January 1

$
3,689.5


$
5,008.4Additions related to current year positions


269.4



284.5Additions related to prior year positions


64.2



187.8Reductions for tax positions of prior years


(310.5
)


(87.0
)Settlements
    (1)


(38.8
)


(1,703.5
)Lapse of statute of limitations


(8.8
)


(0.7
)Balance as of December 31

$
3,665.0


$
3,689.5   (1)
    
    Reflects the settlement with the
    Internal Revenue Service (IRS) discussed
    below.               134




---



##### Table of Contents



16.
    Earnings
    per Share    Years Ended December
    31

2008


2007


2006Average common shares outstanding


2,135.8



2,170.5



2,177.6Common shares issuable
    (1)


9.5



22.4



10.1Average common shares outstanding assuming dilution


2,145.3



2,192.9



2,187.7   (1)
    
    Issuable primarily under
    share-based compensation plans.   135




---



##### Table of Contents



17.
    Comprehensive
    Income    Pretax(1)


Tax


After TaxYear Ended December 31, 2008Net unrealized gain on derivatives

$
208.9


$
(83.5
)

$
125.4Net loss realization


43.3



(17.1
)


26.2Derivatives


252.2



(100.6
)


151.6Net unrealized loss on investments


(212.9
)


79.2



(133.7
)Net loss realization


116.9



(63.7
)


53.2Investments


(96.0
)


15.5



(80.5
)Benefit plan net (loss) gain and prior service cost (credit),
    net of amortization


(2,891.2
)


1,129.5



(1,761.7
)Cumulative translation adjustment related to equity
    investees


(37.2
)


-



(37.2
)$
(2,772.2
)

$
1,044.4


$
(1,727.8
)Year 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),
    net of amortization


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


$
16.6  (1)
    
    Net of applicable minority
    interest. 136




---



##### Table of Contents



December 31

2008


2007Net unrealized gain (loss) on derivatives

$
111.9


$
(39.7
)Net unrealized gain on investments


63.1



143.6Pension plan net loss


(2,440.7
)


(853.6
)Other postretirement benefit plan net loss


(596.5
)


(305.4
)Pension plan prior service cost


(26.4
)


(38.0
)Other postretirement benefit plan prior service cost


309.0



204.1Cumulative translation adjustment related to equity investees


25.7



62.9$
(2,553.9
)

$
(826.1
)     18.
    Segment
    Reporting    non-U.S. subsidiaries
 137




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##### Table of Contents



Vaccines andInfectiousPharmaceutical


Diseases


All Other


TotalYear Ended December 31, 2008Segment revenues

$
19,382.9


$
4,237.0


$
81.8


$
23,701.7Segment profits


12,400.4



2,798.9



419.3



15,618.6Included in segment profits:Equity income from affiliates


1,786.6



121.4



416.2



2,324.2Depreciation and amortization


(96.2
)


(5.2
)


-



(101.4
)Year Ended December 31, 2007Segment revenues

$
19,617.6


$
4,321.5


$
162.0


$
24,101.1Segment profits


13,430.6



2,625.0



452.7



16,508.3Included 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

$
19,835.6


$
2,244.7


$
162.1


$
22,242.4Segment profits


12,476.5



1,253.1



380.7



14,110.3Included 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
)    138




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##### Table of Contents



(1)
  Years Ended December
    31

2008


2007


2006Pharmaceutical:Singulair

$
4,336.9


$
4,266.3


$
3,579.0Cozaar/Hyzaar


3,557.7



3,350.1



3,163.1Fosamax


1,552.7



3,049.0



3,134.4Januvia


1,397.1



667.5



42.9Cosopt/Trusopt


781.2



786.8



697.1Zocor


660.1



876.5



2,802.7Maxalt


529.2



467.3



406.4Propecia


429.1



405.4



351.8Arcoxia


377.3



329.1



265.4Vasotec/Vaseretic


356.7



494.6



547.2Janumet


351.1



86.4



-Proscar


323.5



411.0



618.5Emend


263.8



204.2



130.8Other
    pharmaceutical(2)


2,278.9



2,422.9



2,780.5Vaccine and infectious disease product sales included in the
    Pharmaceutical
    segment(3)


2,187.6



1,800.5



1,315.8Pharmaceutical segment revenues


19,382.9



19,617.6



19,835.6Vaccines(4)

    and Infectious Diseases:Gardasil


1,402.8



1,480.6



234.8ProQuad/M-M-R II/Varivax


1,268.5



1,347.1



820.1RotaTeq


664.5



524.7



163.4Zostavax


312.4



236.0



38.6Hepatitis vaccines


148.3



279.9



248.5Other vaccines


354.6



409.9



354.0Primaxin


760.4



763.5



704.8Cancidas


596.4



536.9



529.8Isentress


361.1



41.3



-Crixivan/Stocrin


275.1



310.2



327.3Invanz


265.0



190.2



139.2Other infectious disease


15.5



1.7



-Vaccine and infectious disease product sales included in the
    Pharmaceutical segment
    (3)


(2,187.6
)


(1,800.5
)


(1,315.8
)Vaccines and Infectious Diseases segment revenues


4,237.0



4,321.5



2,244.7Other segment
    revenues(5)


81.8



162.0



162.1Total segment revenues


23,701.7



24,101.1



22,242.4Other
    (6)


148.6



96.6



393.6$
23,850.3


$
24,197.7


$
22,636.0   (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 $1.6 billion,
    $1.7 billion and $1.8 billion in 2008, 2007 and 2006,
    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)
    
    Sales of vaccine and infectious
    disease products by
    non-U.S.
    subsidiaries are included in the Pharmaceutical
    segment.(4)
    
    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.
    These amounts do, however, reflect supply sales to Sanofi
    Pasteur MSD.(5)
    
    Includes other non-reportable
    human and animal health segments.(6)
    
    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. 139




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##### Table of Contents



Years Ended December
    31

2008


2007


2006United States

$
13,370.5


$
14,690.9


$
13,776.8Europe, Middle East and Africa


5,773.8



5,159.0



4,977.1Japan


1,823.5



1,533.2



1,479.0Other


2,882.5



2,814.6



2,403.1$
23,850.3


$
24,197.7


$
22,636.0     Years Ended December
    31

2008


2007


2006Segment profits

$
15,618.6


$
16,508.3


$
14,110.3Other profits


90.4



21.8



256.7Adjustments


424.7



367.7



516.3Unallocated:Interest income


631.4



741.1



764.3Interest expense


(251.3
)


(384.3
)


(375.1
)Equity income from affiliates


236.5



260.6



233.7Depreciation and amortization


(1,529.8
)


(1,851.0
)


(2,110.4
)Research and development


(4,805.3
)


(4,882.8
)


(4,782.9
)Gain on distribution from AstraZeneca LP


2,222.7



-



-U.S. VioxxSettlement Agreement charge


-



(4,850.0
)


-Other expenses, net


(2,830.1
)


(2,560.7
)


(2,391.5
)$
9,807.8


$
3,370.7


$
6,221.4     (1)
  Years Ended December
    31

2008


2007


2006United States

$
10,546.7


$
10,943.0


$
11,542.7Europe, Middle East and Africa


1,672.5



1,650.3



1,730.7Japan


756.7



885.3



942.4Other


987.8



1,035.4



1,353.8$
13,963.7


$
14,514.0


$
15,569.6   (1)
    
    Long-lived assets are comprised
    of property, plant and equipment, net; goodwill and intangible
    assets, net.   140




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##### Table of Contents



Report
    of Independent Registered Public Accounting Firm  
  Internal Control  Integrated Framework
          
     141




---



##### Table of Contents



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

4th
    Q(1),(2)


3rd
    Q(2),(3)


2nd
    Q(2),(4)


1st
    Q(2),(5)2008(6)Sales


$6,032.4



$5,943.9



$6,051.8



$5,822.1Materials and production costs


1,470.0



1,477.9



1,396.5



1,238.1Marketing and administrative expenses


1,862.1



1,730.3



1,930.2



1,854.4Research and development expenses


1,386.6



1,171.1



1,169.3



1,078.3Restructuring costs


103.1



757.5



102.2



69.7Equity income from affiliates


(720.0
)


(665.6
)


(523.0
)


(652.1
)Other (income) expense, net


3.2



61.8



(81.9
)


(2,177.3
)Income before taxes


1,927.4



1,410.9



2,058.5



4,411.0Net income


1,644.8



1,092.7



1,768.3



3,302.6Basic earnings per common share


$0.78



$0.51



$0.82



$1.53Earnings per common share assuming dilution


$0.78



$0.51



$0.82



$1.522007(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. VioxxSettlement Agreement 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



$0.78   (1)
    
    The fourth quarter 2008 tax
    provision reflects the favorable impact of foreign exchange rate
    changes and a benefit relating to the U.S. research and
    development tax credit. Amounts for the fourth quarter of 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 2007 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 fourth quarter 2008
    and third and second quarter 2007 include the impact of
    additionalVioxx
    legal defense reserves (see Note 10). Amounts for first
    quarter 2008 include the impact of additionalFosamax
    legal defense reserves (see Note 10).(3)
    
    Amounts for third quarter 2007
    include acquired research expense associated with an acquisition
    (see Note 4) and a net gain on the settlements of
    certain patent disputes.(4)
    
    Amounts for 2008 reflect the
    favorable impact of tax settlements.(5)
    
    Amounts for 2008 include a gain
    on distribution from AstraZeneca LP (see Note 8), a gain
    related to the sale of the Companys remaining worldwide
    rights toAggrastat,
    the realization of foreign tax credits and an expense for a
    contribution to the Merck Company Foundation. Amounts for 2007
    include gains on sales of assets and product divestitures.(6)
    
    Amounts for 2008 and 2007
    include the impact of restructuring actions (see
    Note 3). 142




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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 Form 10-K
   Managements
    Report  Managements
    Responsibility for Financial Statements
  Form 10-K
      Form 10-K
 143




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##### Table of Contents



Form 10-K
  Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f) Internal Control  Integrated Framework
      -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.
 144




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##### Table of Contents



Item 11.
    Executive
    Compensation.        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.   145




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##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules.  Form 10-K
  1.
    Financial Statements      Consolidated statement of comprehensive income for the years
    ended December 31, 2008, 2007 and 2006         146




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##### Table of Contents



2.
    Financial Statement Schedules  Merck/Schering-Plough Cholesterol Partnership Combined Financial
    Statements  Merck/Schering-Plough Cholesterol Partnership
    Combined Statements of Net Sales and Contractual Expenses Years Ended December 31,
    ($ in millions)
  2008


2007


2006Net sales

$
4,561


$
5,186


$
3,884Cost of sales


176



216



179Selling, general and administrative


1,062



1,151



1,056Research and development


168



156



1611,406



1,523



1,396Income from operations

$
3,155


$
3,663


$
2,488   Merck/Schering-Plough Cholesterol Partnership
    Combined Balance Sheets December 31,
    ($ in millions)
  2008


2007AssetsCash and cash equivalents

$
204


$
491Accounts receivable, net


311



402Inventories


79



105Prepaid expenses and other assets


14



16Total assets

$
608


$
1,014Liabilities and Partners CapitalRebates payable

$
263


$
377Payable to Merck, net


81



119Payable to Schering-Plough, net


100



115Accrued expenses and other liabilities


44



45Total liabilities


488



656Commitments and contingent liabilities (notes 3 and 5)Partners capital


120



358Total liabilities and Partners capital

$
608


$
1,014   The accompanying notes are an integral part of these combined
    financial statements.
 147




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##### Table of Contents



Merck/Schering-Plough Cholesterol Partnership
    Combined Statements of Cash Flows Years Ended December 31,
    ($ in millions)
  2008


2007


2006Operating Activities:Income from operations

$
3,155


$
3,663


$
2,488Adjustments to reconcile income from operations to net cash
    provided by operating activities:Accounts receivable, net


91



(109
)


(63
)Inventories


26



(18
)


(21
)Prepaid expenses and other assets


2



(2
)


(1
)Rebates payable


(114
)


106



151Payable to Merck and Schering-Plough, net


(53
)


1



(130
)Accrued expenses and other liabilities


(1
)


38



5Non-cash charges


68



60



52Net cash provided by operating activities


3,174



3,739



2,481Financing Activities:Contributions from Partners


407



722



721Distributions to Partners


(3,868
)


(4,006
)


(3,206
)Net cash used for financing activities


(3,461
)


(3,284
)


(2,485
)Net increase/(decrease) in cash and cash equivalents


(287
)


455



(4
)Cash and cash equivalents, beginning of period


491



36



40Cash and cash equivalents, end of period

$
204


$
491


$
36   The accompanying notes are an integral part of these combined
    financial statements.
 148




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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, 2006

$
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



358Contributions from Partners


143



264



407Income from operations


1,665



1,490



3,155Distributions to Partners


(1,964
)


(1,836
)


(3,800
)Balance, December 31, 2008

$
9


$
111


$
120   The accompanying notes are an integral part of these combined
    financial statements.
 149




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##### 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).       150




---



##### 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 Cholesterol
    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. 151




---



##### 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 the net sales of the Cholesterol Products. 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 pre-clinical and post-marketing clinical
    development and regulatory activities 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
  152




---



##### Table of Contents



Foreign
    Currency Translation
   Cash and
    Cash Equivalents
   Inventories
   Intangible
    Assets
   Revenue
    Recognition, Rebates, Returns and Allowances
     $ in millions

2008


2007


2006Vytorin/Inegy

$
2,360


$
2,779


$
1,955Zetia/Ezetrol


2,201



2,407



1,929Total

$
4,561


$
5,186


$
3,884     Income
    Taxes
 Accounting for Uncertainty in
    Income Taxes .
  Concentrations
    of Credit Risk & Segment Information
  153




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##### Table of Contents



Percent of Net Sales2008


2007


2006McKesson Drug Company


24
%


28
%


30
%Cardinal Health, Inc.


21
%


26
%


28
%Amerisourcebergen Corp.


16
%


17
%


12
%     Termination
    of the Respiratory Collaboration
   3.
    Inventories    $ in millions

2008


2007Finished goods

$
31


$
37Raw materials and work in process


48



68Total

$
79


$
105     4.
    Related
    Party Transactions       154




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##### Table of Contents



5.
    Legal and
    Other Matters         155




---



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and/or
   156




---



##### Table of Contents



INDEPENDENT
    AUDITORS REPORT
            
   
 157




---



##### 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 January 1, 2009)*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 1,
    2009)*10
.11



Merck & Co., Inc. Special Separation Program for
    Bridged Employees (effective as of January 1,
    2009)*10
.12



Merck & Co., Inc. Special Separation Program for
    Separated Retirement Eligible Employees (effective
    as of January 1, 2009) 158




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##### Table of Contents



ExhibitNumber



Description*10
.13



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
.14



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
.15



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
.16



Supplemental Retirement Plan (as amended and restated effective
    January 1, 2009)*10
.17



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
.18



Plan for Deferred Payment of Directors Compensation
    (amended and restated as of January 1, 2009)*10
.19



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
.20



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
.21



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
.22



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
.23



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
.24



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
.25



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
.26



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
.27



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
.28



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
.29



Cholesterol Governance Agreement, dated as of May 22, 2000,
    by and among MSP Distribution Services(C) LLC, MSP
    Marketing Services (C) LLC, MSP Technology (US) Company
    LLC, Merck Cardiovascular Health Company, Merck Technology (US)
    Company, Inc., Schering MSP Corporation, Schering Sales
    Management, Inc., Schering Sales Corporation, Schering MSP
    Pharmaceuticals L.P., MSP Cholesterol LLC, MSP Singapore
    Company, LLC, MSD Technology Singapore Pte. Ltd., MSD Ventures
    Singapore Pte. Ltd., Osammor Pte. Ltd. (to be renamed
    Schering-Plough (Singapore) Pte. Ltd.), Citimere Pte. Ltd. (to
    be renamed Schering-Plough (Singapore) Research Pte. Ltd.),
    Schering Corporation, Schering-Plough Corporation, and
    Merck & Co., Inc. (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, 2008 159




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##### Table of Contents



ExhibitNumber



Description10
.30



First Amendment to the Cholesterol Governance Agreement, dated
    as of December 18, 2001, by and among MSP Distribution
    Services (C) LLC, MSP Marketing Services (C) LLC, MSP
    Technology (US) Company LLC, Merck Cardiovascular Health
    Company, Merck Technology (US) Company, Inc., Schering MSP
    Corporation, Schering Sales Management, Inc., Schering Sales
    Corporation, Schering MSP Pharmaceuticals L.P., MSP Singapore
    Company, LLC (the Singapore Partnership), MSD
    Technology Singapore Pte. Ltd., MSD Ventures Singapore Pte.
    Ltd., Schering-Plough (Singapore) Pte. Ltd., Schering-Plough
    (Singapore) Research Pte. Ltd., Schering Corporation,
    Schering-Plough Corporation, and Merck & Co., Inc.
    (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, 200810
.31



Master Agreement, dated as of December 18, 2001, by and
    among MSP Technology (U.S.) Company LLC, MSP Singapore Company,
    LLC, Schering Corporation, Schering-Plough Corporation, and
    Merck & Co., Inc. (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, 200810
.32



Master Merial Venture Agreement, dated as of May 23, 1997,
    by and among Rhône-Poulenc S.A., Institut Mérieux
    S.A., Rhône-Mérieux S.A., Merck & Co., Inc.,
    Merck SH Inc., and Merial Limited (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, 200810
.33



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
.34



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 162 of this Report23
.2



Independent Auditors Consent  Contained on
    page 163 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.
 160




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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 27, 2009PETER
    N. KELLOGG

Executive Vice President and Chief Financial Officer; Principal
    Financial Officer

February 27, 2009JOHN
    CANAN

Senior Vice President and Global Controller; Principal
    Accounting Officer

February 27, 2009LESLIE
    A. BRUN

Director

February 27, 2009JOHNNETTA
    B. COLE

Director

February 27, 2009STEVEN
    F. GOLDSTONE

Director

February 27, 2009WILLIAM
    B. HARRISON, JR.

Director

February 27, 2009HARRY
    R. JACOBSON

Director

February 27, 2009WILLIAM
    N. KELLEY

Director

February 27, 2009CARLOS
    E. REPRESAS

Director

February 27, 2009THOMAS
    E. SHENK

Director

February 27, 2009SAMUEL
    O. THIER

Director

February 27, 2009WENDELL
    P. WEEKS

Director

February 27, 2009PETER
    C. WENDELL

Director

February 27, 2009   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)
 161




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##### Table of Contents



Exhibit 23.1
  CONSENT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  Form S-3 333-146356) 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.
  
      162




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##### Table of Contents



Exhibit 23.2
  INDEPENDENT
    AUDITORS CONSENT
  333-146356 Form S-3 33-21087, 33-21088, 33-51235, 33-53463, 33-64273, 33-64665, 333-91769, 333-30526, 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
  
      163




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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 January 1, 2009)*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 1,
    2009)*10
.11



Merck & Co., Inc. Special Separation Program for
    Bridged Employees (effective as of January 1,
    2009)*10
.12



Merck & Co., Inc. Special Separation Program for
    Separated Retirement Eligible Employees (effective
    as of January 1, 2009)*10
.13



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
.14



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
.15



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
.16



Supplemental Retirement Plan (as amended and restated effective
    January 1, 2009)




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##### Table of Contents



ExhibitNumber



Description*10
.17



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
.18



Plan for Deferred Payment of Directors Compensation
    (amended and restated as of January 1, 2009)*10
.19



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
.20



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
.21



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
.22



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
.23



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
.24



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
.25



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
.26



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
.27



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
.28



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
.29



Cholesterol Governance Agreement, dated as of May 22, 2000,
    by and among MSP Distribution Services(C) LLC, MSP
    Marketing Services(C) LLC, MSP Technology (US) Company LLC,
    Merck Cardiovascular Health Company, Merck Technology (US)
    Company, Inc., Schering MSP Corporation, Schering Sales
    Management, Inc., Schering Sales Corporation, Schering MSP
    Pharmaceuticals L.P., MSP Cholesterol LLC, MSP Singapore
    Company, LLC, MSD Technology Singapore Pte. Ltd., MSD Ventures
    Singapore Pte. Ltd., Osammor Pte. Ltd. (to be renamed
    Schering-Plough (Singapore) Pte. Ltd.), Citimere Pte. Ltd. (to
    be renamed Schering-Plough (Singapore) Research Pte. Ltd.),
    Schering Corporation, Schering-Plough Corporation, and
    Merck & Co., Inc. (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, 200810
.30



First Amendment to the Cholesterol Governance Agreement, dated
    as of December 18, 2001, by and among MSP Distribution
    Services(C) LLC, MSP Marketing Services(C) LLC, MSP
    Technology (US) Company LLC, Merck Cardiovascular Health
    Company, Merck Technology (US) Company, Inc., Schering MSP
    Corporation, Schering Sales Management, Inc., Schering Sales
    Corporation, Schering MSP Pharmaceuticals L.P., MSP Singapore
    Company, LLC (the Singapore Partnership), MSD
    Technology Singapore Pte. Ltd., MSD Ventures Singapore Pte.
    Ltd., Schering-Plough (Singapore) Pte. Ltd., Schering-Plough
    (Singapore) Research Pte. Ltd., Schering Corporation,
    Schering-Plough Corporation, and Merck & Co., Inc.
    (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, 2008




---



##### Table of Contents



ExhibitNumber



Description10
.31



Master Agreement, dated as of December 18, 2001, by and
    among MSP Technology (U.S.) Company LLC, MSP Singapore Company,
    LLC, Schering Corporation, Schering-Plough Corporation, and
    Merck & Co., Inc. (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, 200810
.32



Master Merial Venture Agreement, dated as of May 23, 1997,
    by and among Rhône-Poulenc S.A., Institut Mérieux
    S.A., Rhône-Mérieux S.A., Merck & Co., Inc.,
    Merck SH Inc., and Merial Limited (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, 200810
.33



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
.34



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 xxx of this Report23
.2



Independent Auditors Consent  Contained on
    page xxx 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.