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Published by shannonmtyson, 2020-04-08 12:59:48

2019 Merck Annual Report

2019 ANNUAL
REPORT


Table of Contents
3 Who We Are
4 A Message from Our Leadership
5 Economic Inclusion & Supplier Diversity Team
7 History of Economic Inclusion & Supplier Diversity
9 Economic Inclusion and Supplier Diversity
10 35 Years of Economic Inclusion & Impact
11 Impact Spend
12 2019 Performance
13 Around the Globe – EMEAC
14 Around the Globe – JCAP
15 Around the Globe – LATAM
Internal Program and Activities
16
17 Employee Business Resource Groups
18 How We Collaborate with Employee Business Groups
19 Economic Impact Summit
21 Power of Inclusion Award Winners
22 Economic Impact Summit Suppliers
24 Awards & Recognitions
25 Supplier Diversity in the Community
26 Business Advocacy Partners
27 Supplier Spotlight
29 Annual Reports & Proxies
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report
| 3


Who We Are
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report | 3


A Message from Our Leadership
Susanna Webber
Senior Vice President and Chief Procurement Officer Global Supplier Management Group
Diversity is one of the foundations of Merck’s success in our mission to discover, develop and provide innovative products and services that save and improve lives around the world. At the heart of our commitment to diversity is our Economic Inclusion and Supplier Diversity program, we believe that having a diverse supplier base helps us better understand and anticipate the needs of the people we serve. That is why we cast a wide net in search of talent, seeking qualified suppliers from all segments of the global community. Our supplier diversity program includes Minority-, Women, Veteran-, Lesbian, Gay, Bisexual and Transgender- and Disability-owned business enterprises as well as small businesses. By helping these companies thrive, Merck is not only reflecting the diversity of our customers, we are strengthening our service, and we are investing in our communities.
Diversity is not a new idea at Merck—we have worked diligently for 35 years to build the Supplier Diversity program that we celebrate today. As evidence of the program’s ongoing success, we maintained our spending last year at levels on par with the strongest in our history. Our spending with diverse businesses in 2019 was $2.9 billion globally, an astronomical growth that shows both the wealth of potential these efforts represent, and the strength and capabilities of the diverse companies with whom we do business.
Yet even with our progress, we are aiming to do more, including a Virtual Engagement Center to further support the development of small and diverse suppliers. We are also working with our prime suppliers to expand opportunities for diverse firms as business solution partners and subcontractors for our Tier II Program.
We are proud to report on the success and evolution of this program, which reflects and celebrates our diversity, increases economic vitality in our communities and improves the quality and cost-effectiveness of our supply chain. We believe that the success of the company and society depends on enabling diverse businesses to share and grow in the global market.
Susanna Webber
Senior Vice President and Chief Procurement Officer Global Supplier Management Group
4 | Merck2019EconomicInclusion&SupplierDiversityAnnualReport


Economic Inclusion & Supplier Diversity Team
Mindy Neiman
Director Economic Inclusion & Supplier Diversity, Talent
Development and Communications
Raul Suarez-Rodriguez
Associate Director Global Economic Inclusion & Supplier Diversity
Cheryl Hofmeister
Senior Specialist
Olivia Dunn
Specialist
Andrea Arce
Associate Specialist
Maria del Pilar Castaneda Idalia Acevedo
Latin America Regional Lead Puerto Rico Regional Lead
Sreedhar Kanboina
JCAP Regional Lead
Bettina Lillelund
EMEAC Regional Lead
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report
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History of Economic Inclusion & Supplier Diversity
Minority Business Opportunity Fair. 25 minority vendors met with Merck to discuss the company’s purchasing requirements.
Supplier Diversity becomes a strategic business initiative
Supplier Diversity included in corporate scorecard
Merck lead the change to create Diversity Alliance for Science (DA4S)
1985 – 2005
2007
2008
2012
Merck launched the: Minorities- and Women- owned Enterprise Program (M/WOE)
Launch of the Tier II program
CEO and the Executive Committee signs Supplier Diversity Commitment Statement
Supplier Diversity in the UK and Canada becomes a strategic program.
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report | 7


History of Economic Inclusion & Supplier Diversity
Name changes to Global Economic Inclusion & Supplier Diversity.
Program extends to include the rest of the world (APJ & Latin America)
Merck becomes a member of the Billion Dollar Roundtable
Won 2019 NMSDC Corporation of the Year II
America’s Top Corporation for Women Business Enterprises- Silver Distinction
#1 Top Global Champions for Supplier Diversity by WeConnect International
Best of the Best Corporation
for Inclusion by National LGBT Chamber of Commerce(NGLCC) and National Business Inclusion Consortium (NBIC)
2015
2016
EI & SD becomes a part of the Executive Committee’s Scorecard
America’s Top Corporation Award Women Business Enterprises
Corporation of the Year Award Diversity Alliance for ScienceCorporation of the Year Award
National Minority Supplier Development Council
Corporation of the Year by Puerto Rico Minority Supplier Development Council (PRMSDC) Corporation of the Year by National Minority Supplier Development Council (NMSDC)
Top 50 Corporation for Multicultural Business Inclusion
by Omnikal
Million Dollar Club by US Hispanic Chamber of Commerce
8 | Merck2019EconomicInclusion&SupplierDiversityAnnualReport
2017
2018
2019




35 Years of Economic Inclusion & Impact
About Economic Inclusion & Supplier Diversity (EISD)
As a driver of growth, innovation, and competitive advantage, EI&SD embeds our core values into our operational strategy, ensuring complete alignment to Merck’s corporate governance, business model, and sourcing guidelines.
EISD in Action
INVENT
growth, innovation and Merck’s competitive advantage.
IMPACT
diverse businesses to yield value creation, economic inclusion and advanced products.
INSPIRE
a circle of inclusion between profit, product and pipeline, which is critical to our role in Inventing for Life.
IMPACT – Annual Spend
$2.4 billion North America
$2.9 billion Global
10 | Merck2019EconomicInclusion&SupplierDiversityAnnualReport


Impact Spend
$2.4
billion
Spending with Small and Diverse Suppliers
$5.1
billion
Economic Impact through Supplier Diversity
32,600
jobs
Supported through Small and Diverse Suppliers
$1.4
billion
Earnings through jobs created/sustained
*based on 2019 data References: Billion Dollar Roundtable Economic Impact Study University of Washington, Foster School of Business
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report | 11


2019 Performance
12 | Merck2019EconomicInclusion&SupplierDiversityAnnualReport


Around the Globe – EMEAC
• The EMEAC region covers Europe, Middle-East, Africa and Canada. The EMEAC Procurement team continues to build upon its reach and again in 2019 had a strong focus on Economic Inclusion & Supplier Diversity in sourcing activities whilst supporting multiple events. Against a diverse spend target of $283 MM, the team realized by developing new diverse business relations or continuing business with existing diverse suppliers a total diverse spend of $343 MM (~122% versus target).
• The evolving program in the EMEAC region was also confirmed by the NGO WEConnect receiving most RFP opportunities from MSD (27%) versus other corporate members. In addition, the NGO MSDUK highlighted MSD in Europe was amongst the top 5 Corporates presenting the most bid lists to minority owned business during 2019.
• New supplier connections were made, and ideas developed at multiple small and large diversity events (including, roundtables, breakfast sessions, match making and 1:1 introductions) across the region (primarily Canada, UK, Germany, Austria, Turkey, Italy, France, Italy, the Netherlands, Belgium and Switzerland) throughout the year.
• MSD is proud to play a key role in the hugely successful, very first supplier diversity summit in Milan co-sponsored by MSD, Barilla, Accenture, Intel & J&J with support from the regional NGOs MSDUK and WEConnect International Europe. Our Italian managing director and other local stakeholders (including other corporates, academic institutions and community networks and newly formed EGLCC representing the LGBTI community) from across Europe participated to speak and discuss how to develop inclusive supply chains, and how corporate supplier diversity programs can fast track economic integration of diverse suppliers.
• In Turkey, our procurement team supported WEConnect’s local conference for Turkish Women Entrepreneurs, serving as a jury at the WBE pitch competition during the conference where eight contestants had their business models evaluated.
• MSD continued to support ethnic minority businesses by sponsoring scholarships as part of the MSDUK’s program.
• In Europe, MSD succeeded for the first year to be shortlisted on the “Supplier Diversity Program of the Year” organized by the external organization EDA representing the “European Diversity Awards 2019” in London.
• Another significant recognition was internal. Our Italian Procurement Lead, Stefano di Mario, won the company’s GSMG GWES award as EI&SD Champion of the Year 2019 – a fabulous achievement for him, the Italy market and the regional team!
EMEAC EISD Supplier Diversity Summit (Italy)
WEConnect VDU Procurement and Supplier (Germany)
Power of Inclusion Awards
MSDUK Conference (UK)
Major Markets (Canada)
WeConnect Conference (London)
WeConnect (Turkey)
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report | 13


Around the Globe – JCAP
• JCAP ended the year with $23MM diversity spend against the target of $20MM, consisting of primarily Women owned businesses.
• The spend was driven by 133 Women owned suppliers, out which 27 new suppliers added during 2019, across 14 markets in the region
MARKET
CHINA
AP CLUSTER
INDIA
JAPAN
MMD
TOTAL
TARGET
$9.64M
$5.66M
$2.74M
$0.3M
$1.66M
$20M
ACHIEVED
$11.3M
$6.5M
$3.0M
$0.4M
$2.2M
$23.4M
• In 2020, we have explored the potential for expanding our diversity program towards SMEs and identified an additional $10MM potential covering 92 SME suppliers across 4 markets, which we plan to roll out in 2020.
• JCAP attended a variety of events throughout 2019 to continue to show the Merck commitment towards Supplier Diversity and Economic Inclusion.
International Women’s Day Celebration Business Sensitization - Diversity Inclusion WeConnect ThinkBig Event (India) (India) (India)
14 | Merck2019EconomicInclusion&SupplierDiversityAnnualReport


Around the Globe – LATAM
• The LA region ended the year with $43M diversity spend against the target of $31MM, consisting of primarily Social Enterprises.
• The spend was driven by 114 diverse suppliers; 40 Women Owned businesses and 74 Social enterprises within the region
MARKET
ARGENTINA
BERMUDA
BRAZIL
CHILE
COLOMBIA
COSTA RICA
ECUADOR
MEXICO
PANAMA
PERU
GRAND TOTAL
TARGET
$3.10M
-
$20.20M
$40K
$800K
-
$95K
$5.60M
$720K
$480K
$31.03M
ACHIEVED
$5.64M
$64K
$24.56M
$59K
$1.91M
$9K
$83K
$9.27M
$1.04M
$521K
$43.18M
• For 2020, our target will be $37M considering NewCo and part of that gap will be covered with the intention of exploring towards SMEs and work together with AH in this objective.
• We attended several events throughout the year and the region such as Meet the Members with WEConnect, First Regional Women Economic Forum and Second Regional WEConnect Forum.
WeConnect International (Brazil) WeConnect First Regional Women WeConnect International WeConnect Meet the Member Regional Meeting Economic Forum (Colombia (Brazil) (Colombia)
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report | 15




Employee Business Resource Groups
• An EBRG is defined as a group of employees with a common interest to serve as an educational and cultural resource for employees and business units within the Company, and to serve as ambassadors externally in ways that will enhance the Company's reputation and presence in the communities
• Our EBRGs create an environment for employees to gain individual and professional growth, impact the business and opportunities to give back to the community. We have a total of 10 EBRGs that support our business objectives and insights. Approximately 10% of employees globally are members of one or more EBRGs within our company.
• Some examples of areas where EBRGs have a business impact are in supporting efforts to: reduce healthcare disparities among diverse populations, increase health literacy, advance diversity in clinical trials, support talent acquisition objectives and enhance corporate reputation through community activation.
• Visit the EBRG resource page to learn more and join an EBRG.
INTERFAITH
AFRICAN DESCENT
Employee Business Resource Groups (EBRGs)
ASIAN
NEXT GEN
HISPANIC
LGBTQ & ALLY
DISABILITY
WOMEN’S
Merck Hispanos Organization at USHCC
VETERANS AMERICAN
NATIVE
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report
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How We Collaborate With Employee Business Resource Groups
Merck’s Employee Business Resource Groups plays an active role in promoting diversity and community service within the company. The EBRGs include Merck Hispanos Organization, Merck Rainbow Alliance, Veteran’s EBRG, Merck Women’s Network, Merck Interfaith Organization, among others. Each EBRG provides employees with opportunities to get involved with the community to participate in outreach activities, as well as Supplier Diversity activities. They also support the company’s business model in business insights, talent and inclusion and corporate reputation.
In 2019, Merck’s Employee Business Resource Groups collaborated with the Economic Inclusion and Supplier Diversity team at multiple Supplier Diversity events.
Puerto Rico Minority Supplier Development Council - Merck Hispanos Organization, Merck Rainbow Alliance, and Women’s Network
Merck Rainbow Alliance at NGLCC
Merck Hispanos Organization at USHCC
18 | Merck2019EconomicInclusion&SupplierDiversityAnnualReport


Economic Impact Summit
Merck believes and supports the communities across the globe and is focused on enhancing their existing partnerships and committed to build new connections with diverse suppliers in the communities we live and serve.
The two-day Economic Impact Summit is focused on achieving our vision, to create a legacy effect and with lasting value that is important to all internal and external partners. We do this by partnering with our business advocacy groups .
291 Merck Employees 193 Matchmaking meetings between Diverse Suppliers Merck Prime Suppliers (Tier 1/
Advocacy Group Leaders
participants
Non-Diverse) with diverse suppliers meetings for second tier opportunities.
56% The meetings ranked with great 5 probabilities of engagement
between Tier 1 and diverse suppliers
Power of Inclusion Awards Winners
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report | 19


Economic Impact Summit
20 | Merck2019EconomicInclusion&SupplierDiversityAnnualReport


Power of Inclusion Award Winners
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report | 21


Economic Impact Summit Suppliers
Economic Impact Summit would not have been possible without the following Diverse Suppliers
22 | Merck2019EconomicInclusion&SupplierDiversityAnnualReport




Awards & Recognitions
Recognition for our commitment to diversity and inclusion
Our commitment to diversity and inclusion represents a key aspect of our approach to corporate responsibility and demonstrates our support of the Sustainable Development Goals (SDGs). Highlights from recent recognitions reflect the depth of our commitment to diversity and inclusion.
Best Employers for Diversity
Forbes recently announced the 2020 list of Best Employers for Diversity, and our company is on it. To create the list, Forbes partnered with market research firm Statista to conduct independent surveys of 60,000 employees working for companies employing at least 1,000 people in their U.S. operations. Respondents were asked questions regarding age, gender equality, ethnicity, disability, LGBTQA+ and general diversity concerning their employer.
• Working Mother’s 100 Best Companies: Merck is in the top 20 on this list, which recognizes companies that set the standard for mom-friendly work places. Our company is honored to have been on the Working Mothers magazine list for 30 years.
• Equileap Report on the World’s Top Companies for Gender Equality: Merck came in at #4 in this report that measures how well companies do in offering equal opportunities for men and women.
• Thomson Reuters Top 100 Diverse and Inclusive Organizations: Merck ranked #20 on this list that measures four categories: diversity, inclusion, people development and news controversies.
• Human Rights Campaign’s Best Places to Work Corporate Equality Index: Merck was included on this index, a benchmarking tool which evaluates corporate LGBTQ-inclusive policies and practices.
• National Association for Female Executives (NAFE) naming us to their 2019 NAFE Top Companies for Executive Women list
• Top 50 STEM Workplaces for Native American Professionals by the American Indian Science and Engineering Society
• One of the Top 50 Companies of the Year in the LATINA Style magazine’s LATINA Style 50 report
• 2019 Military Times Best for Vets index
• America’s Top Corporation for Women Business Enterprises- Silver Distinction
• #1 Top Global Champions for Supplier Diversity by WeConnect International
• Best of the Best Corporation for Inclusion by National LGBT Chamber of Commerce(NGLCC) and National Business Inclusion
Consortium (NBIC)
• Corporation of the Year by Puerto Rico Minority Supplier Development Council(PRMSDC)
• Corporation of the Year by National Minority Supplier Development Council (NMSDC)
• Top 50 Corporation for Multicultural Business Inclusion by Omnikal
• Million Dollar Club by US Hispanic Chamber of Commerce
“ We believe that having a diverse workforce — including all dimensions of diversity — is fundamental to our company’s success,” says Celeste Warren, chief diversity officer. “A diverse workforce deepens our perspective and inspires the next great idea or invention that can lead to better health.”
- Celeste Warren, vice president of Human Resources and Chief Diversity Officer, Merck
“ Our ability to deliver on our mission depends on the diverse talent of our employees,” says Carmen Villar, vice president, Social Business Innovation. “With operations in more than 140 countries, it is important that we represent the communities in which we live and serve.”
- Carmen Villar, vice president, Corporate Responsibility
24 | Merck2019EconomicInclusion&SupplierDiversityAnnualReport


Supplier Diversity In The Community
Billion Dollar Roundtable
National Minority Supplier Development Council Conference
WBENC Summit & Salute
Omnikal
Puerto Rico Minority Supplier Development Council
WBENC National Conference
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report | 25


Business Advocacy Partners
26 | Merck2019EconomicInclusion&SupplierDiversityAnnualReport


Supplier Spotlight
Selecting Agency Partners Diverse in Ownership ... and Offering
When it comes to partnering with an agency to enhance HCP medical education experiences, we know what matters most: deep scientific expertise, solid strategic acumen, and the creative horsepower to deliver it all effectively. We assume big network agencies offer these things, but what about smaller diverse suppliers—are they worth the leap of faith? The truth is, it’s not a leap. Smaller doesn’t mean suboptimal.
I’d like to share a recent success story that demonstrates why. In early 2019, Avant Healthcare, a 225-employee, independent, certified woman- owned healthcare communications agency, began working with the GARDASIL® 9 team on peer-to-peer medical education content and strategy. The shared goal: Do it differently.
As part of the RFP selection process, Avant Healthcare found itself competing with large network agencies. Despite their perceived size disadvantage, Avant earned the business in November 2018. They dug in quickly to understand not just GARDASIL 9, but the overall vaccines landscape, a therapeutic area where they had not previously worked. In a few short weeks, with two big holidays between, they presented a comprehensive 2019 content strategy the first week of the new year.
Showing (And Telling) the Story
Enter Medical Storytelling, an Avant Healthcare core service offering. This strategic differentiator helps clients like the GARDASIL®9 team combine high creativity with deep medical knowledge to produce content experiences with a different feel—and higher appeal—for HCP
audiences. Avant uses Medical Storytelling to build the GARDASIL 9 brand verbally and visually. In 2019, they partnered with the GARDASIL 9 team to
evolve the narrative with an overarching unifying theme—HPV: You can’t predict, but you can protect—sharing the scientific story holistically across channels, formats, and audiences.
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report | 27


Supplier Spotlight
Bloc Partners-Diverse Partner of the Year 2019
The Bloc Partners is an independent Woman-Owned creative agency, fully focused on the health industry. Our partnership started in 2013, where they started to work primarily as an adaptation agency. Their main role was to adapt creative content within our promotional marketing space at significantly lower cost for Merck and in a time efficient manner. To continue to deliver value to their clients, Bloc Partners has also developed and strengthened their partnerships with independent diverse agencies across the globe. They have created accordingly the “Bloc Network”, which consists of 18 agencies in 21 markets with a “multilocal” approach. This growth strategy has significantly increased their global footprint and marketing capabilities via locally rooted agencies with deep regulatory expertise and market knowledge. In a few years, they were able to build a strong reputation across Merck by contributing high qualitative work, as well as their bold decision to develop their business in a busy and competitive market place, traditionally owned by holding companies.
Pictured below from left to right: Raul Suarez-Rodriguez, Cheryl Hofmeister, Rico Villay (Bloc Partners), Susan Miller (Bloc Partners), Olivia Dunn and Mindy Neiman.
28 | Merck2019EconomicInclusion&SupplierDiversityAnnualReport


Annual Reports & Proxies
The company will provide, free of charge upon request, its Annual Report on Form 10-K which contains the Company's complete audited financial statements.
Write to:
Merck Stockholder Services, K1-3049 Merck & Co., Inc.,
2000 Galloping Hill Road
Kenilworth, NJ 07033 U.S.A.
2019 Merck Annual Report & 2019 Proxy
• 2019 Annual Report on Form 10-K • 2019 Merck Proxy Statement
• 2019 Proxy Voting Results
Merck 2019 Economic Inclusion & Supplier Diversity Annual Report
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z
One Merck Drive Whitehouse Station, NJ 08889


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