Manufacturing Rises to the Top at Merck

05/05/2005

The Board of Directors of Merck & Co., Inc. (Whitehouse Station, N.J.) on May 5 announced its election of Richard T. Clark as the Company's chief executive officer and president and a member of the Merck Board, effective immediately. Clark is currently the president of Merck's manufacturing division and previously served as the chairman and chief executive officer of Medco Health Solutions, Inc.

The Board also announced that Lawrence A. Bossidy, former chairman and CEO of Honeywell International, Inc., will serve as chairperson of the Board's newly structured Executive Committee, which will work closely with Clark to provide support and continuity as he assumes his new duties. This committee is expected to be in place for one to two years. Raymond V. Gilmartin is stepping down as chairman, president and CEO and as a director of the Company and will serve as Special Advisor to the Executive Committee. The Board has not named a new chairman.

"Dick Clark is an exceptional leader and strategist. This has been demonstrated throughout his career at Merck and, in particular, during his tenure as CEO of Medco Health. Dick's broad experience, track record, values, and personal attributes make him an ideal candidate to lead Merck into the future. Dick has consistently shown that he can lead necessary change at Merck while remaining true to the Company's core values," said Bossidy, who is chairperson of Merck's Compensation & Benefits Committee, which conducted the succession process. "The Board engaged in a thorough and wide-ranging search.  We looked at internal candidates and external candidates, including those with experience beyond the pharmaceutical industry, to find the very best candidate - one who could lead change at Merck to meet the dynamic challenges and demands of the health care environment. The more we looked, the more convinced we became that the ideal candidate would be familiar and experienced with the industry and Merck. We have found that candidate in Dick Clark."

"I am honored to be selected as the CEO and president of Merck," said Clark.  "I know first-hand that this is a great company, with a long and distinguished record of discovering and developing important medical breakthroughs. Along with Merck's experienced and talented senior management team, I look forward to leading the change that is necessary to continue Merck's success into the future. As CEO, my priorities are clear - meeting the needs of patients and building shareholder value."

Clark has held a broad range of operating and strategic positions during his tenure with the Company.  Most recently, he served as president of the Merck Manufacturing Division (MMD), where his supply strategy emphasized targeted investment of resources, faster new product introductions, and a customer-focused supply chain to create a sustainable competitive advantage for Merck. In addition to leading manufacturing operations that span 31 plants in 25 countries around the world, Clark also had responsibility for Merck's global information services infrastructure, procurement, and operational excellence initiatives.

Prior to assuming his most recent responsibilities, Clark held high-level executive positions at Medco Health Solutions, Inc., the pharmacy benefits management (PBM) company. Clark was president of Medco Health from 2000 to June 2002, when he was named chairman and chief executive officer, a position he held until March 2003 prior to the spin-off of Medco Health.

During his tenure, Medco Health was the largest and most innovative company in the PBM industry.  In a highly dynamic and competitive market for PBM services, Clark identified and capitalized upon Medco Health's unique capabilities to build the foundation of what has become one of the world's leading healthcare companies.  Today, Medco Health is a $35 billion company ranked number 48 on the Fortune 500 list with approximately 13,500 employees.

A member of Merck's 10-person Management Committee, Dick Clark spearheaded a major interdivisional initiative to maximize the potential of Merck's growing pipeline, streamline business processes, and ensure resources are focused on the highest priority initiatives.  The initiative, led by Clark along with Peter S. Kim, Ph.D., president of Merck Research Laboratories, more closely aligns the work of Merck's research laboratories, its manufacturing division and its marketing and sales divisions.  The new approaches borne of the initiative are expected to add substantially to Merck's competitive advantage by further facilitating the introduction and supply of medicines to patients through faster and more streamlined processes for introducing new products, a more responsive and cost effective supply chain, and increased customer service levels.

Clark has also led Merck's ongoing and successful effort to permanently reduce the Company's cost structure by improving efficiency company-wide, including in manufacturing, capital investment, procurement and inventory management.  These efficiency improvements are expected to result in more than $2 billion in cost reductions through 2008.

The Board's Executive Committee, which in addition to Bossidy also includes William G. Bowen and Samuel O. Thier, will provide guidance during Clark's transition to his new responsibilities.

"We were greatly impressed with Dick's achievements at Merck," said Bowen, chairperson of Merck's Committee on Corporate Governance, and an active participant in the succession process.  "He has led the effort to maximize operating efficiencies, thus strengthening the Company's ability to continue to invest in research and development and other business expansion opportunities. At Medco Health, Dick proved to be a superb strategist - able to identify the organization's unique strengths and focus them on building growth."  He added, "He knows Merck, he knows the industry and he knows how to get things done.  We are confident that he will position the Company to take advantage of the tremendous opportunities that lie ahead."

Beginning his career at Merck in 1972 as a quality control inspector, Clark progressed through a series of increasingly responsible roles in the areas of production, new products planning, and strategic planning, becoming senior vice president, North American operations, MMD in 1996.

Clark succeeds Raymond V. Gilmartin, who has served as chairman, president and chief executive officer of Merck since 1994.  Gilmartin will serve as Special Advisor to the Board's Executive Committee, providing expertise in the areas of global public policy, government and regulatory affairs, and charitable contributions until March 2006, when he will retire.

"I am very pleased that the Board has chosen Dick Clark as the new CEO of Merck," said Gilmartin. "With his deep experience and proven track record at Merck and at Medco Health, Dick is a great choice to become the next CEO.  He has successfully led many of the Company's most important strategic initiatives. He is extremely well qualified to lead this great organization and its extraordinary team of dedicated people.  I look forward to my new role as Special Advisor and to helping this transition work as smoothly as possible.  I am a strong believer that a retired CEO should be available to help a new CEO, when asked, but otherwise should clear the way for the new leader."