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Our Approach

CEO Letter

This year marks our company’s 125th anniversary, a historic milestone that calls us to reflect on our legacy of innovation and its tangible impact on people and societies around the world.

Since 1891, we have pushed the boundaries of science to create breakthrough medicines and vaccines while finding ways to bring these discoveries to more people who can benefit from them. We continue to add to that legacy today, and our 2015/2016 Corporate Responsibility Report highlights ways we are delivering on our commitments to improve access to health care, protect the environment, and engage our employees, all while operating with the highest ethical standards.

Consistent with our enduring mission to save and improve lives through innovation, our pipeline and products focus on areas of significant unmet medical need, including cancer, the hepatitis C virus and life-threatening infections. We pursue these advances with a firm belief in the value they offer—helping people improve their health while reducing problems that can lead to costly hospital stays and long-term care.

Our legacy is a powerful reminder that great medicines truly change the world, and of our responsibility to invest in new solutions to today’s pressing medical needs.

The continued progress of our investigational Ebola Zaire vaccine illustrates our dedication to discover and develop novel medicines and vaccines to combat infectious disease. We are responsible for the research, development, manufacturing, and regulatory efforts for the vaccine, and we are working closely with other stakeholders to accelerate the continued development, production, and, if licensed, distribution of the vaccine.

In 2015, through our MSD for Mothers initiative, we made advances in protecting the lives of mothers and children. In partnership with the U.S. Government program Saving Mothers, Giving Life, maternal mortality rates in facilities in target districts in Uganda and Zambia were nearly halved. We also decreased stock-outs of contraceptives in Senegal from more than 80 percent in 2011 to less than two percent in all public health facilities by March 2015.

We took special pride in congratulating Dr. William C. Campbell, one of our company’s retired scientists, who was jointly named the 2015 Nobel Prize winner in Physiology or Medicine for a discovery that led to our company’s development of MECTIZAN® (ivermectin), a treatment for river blindness. Thanks to the public health opportunity created by that discovery, a global effort was launched in 1987 that continues today, with a range of partners committed to consigning that debilitating disease to the history books.

We know that a healthy planet is essential to human health and to the sustainability of our business, so our company continues to look for creative ways to have a positive impact on the environment. By the end of 2015, we had attained—ahead of schedule—all three of our environmental goals related to water, emissions, and waste. Our commitment to environmental stewardship earned us recognition from the CDP, which awarded us “Disclosure Leadership Status” for our Climate Change Investor Report. While we are proud of this progress, we know we can make additional improvements to further protect the environment and minimize our use of natural resources.

Through our commitment to ethics, values and transparency, we continually seek to earn the trust and confidence of our stakeholders. As one example of this commitment, in 2015 we significantly increased our business with diverse suppliers and small enterprises. And to foster an ongoing ethical environment with our network of partners, we instituted a more formal program to evaluate the risks for labor and human rights impacts in our supply chain.

All of these contributions are possible only through the vision, dedication and tireless efforts of our employees worldwide. As we seek to foster an environment that brings out the best in our global team, we’ve learned that many of the world’s most significant ideas are born when people from different backgrounds and experiences come together to share perspectives. To give one example, our Global Diversity and Inclusion Consortium expanded its efforts to embed diversity and inclusion into our business, in order to differentiate our company and positively impact our business results. In addition, to foster a healthy and productive work environment for our employees, in 2015 we initiated a campaign focused on ergonomics, including workplace design. As a result, we reduced the number of ergonomic-related injury cases by 52 percent from 2014. And to harness the energy of our employees to support local communities and invoke the spirit of our milestone 125th anniversary, we initiated a volunteerism campaign to achieve 125,000 employee volunteer hours in 2016.

While we celebrate 125 years of proud heritage, we look forward to continuing our legacy, engaging with partners and patients as a trusted leader to improve access to health care and grow our impact on society, across our businesses and around the world. To guide our efforts, we are committed to supporting the 10 universally accepted principles of the UN Global Compact. And we look to frameworks such as the new Sustainable Development Goals (SDGs) as tools to focus, measure, and align our global corporate responsibility efforts. My personal role as a member of the Business and Sustainable Development Commission in support of the SDGs reinforces this commitment.

We believe that our scientific and business contributions have helped make the world a healthier, stronger and more hopeful place. And we believe that our future will be even better as we continue to seek novel and sustainable solutions that improve both health and society.

Sincerely,

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Kenneth C. Frazier

Chairman and Chief Executive Officer