Merck Sustainability Report 2021

SASB index

TAG overview

SASB disclosure 2021

In 2021, we integrated our Sustainability Accounting Standards Board (SASB) disclosures into our Sustainability Report in 2021. In addition to our disclosures pursuant to the SASB standard “Biotechnology & Pharmaceuticals”, we reported our information for the “Medical Equipment & Supplies” and “Semiconductors” industries for the first time. We thus cover our three business sectors now. With our voluntary SASB disclosures, we want to meet the increasing demands of our investors and other stakeholders. The reported data provide transparent, financially material and meaningful information on sustainability. To meet the evolving interests and requirements of our stakeholders in the future as well, we will continuously develop and expand our SASB reporting.

The SASB disclosures were not part of the limited assurance engagement conducted by an independent auditor for our 2021 Sustainability Report.

Biotechnology & Pharmaceuticals

Safety of Clinical Trial Participants

HC-BP-210a.1

 

Discussion, by world region, of management process for ensuring quality and patient safety during clinical trials

 

Clinical studies
R&D: Positions & Policies (Healthcare)

HC-BP-210a.2

 

Number of FDA Sponsor Inspections related to clinical trial management and pharmacovigilance that resulted in: (1) Voluntary Action Indicated (VAI) and (2) Official Action Indicated (OAI)

 

There were no FDA Good Clinical Practice (GCP) sponsor inspections related to clinical trials in 2021.

HC-BP-210a.3

 

Total amount of monetary losses as a result of legal proceedings associated with clinical trials in developing countries

 

Not reported

Access to Medicines

HC-BP-240a.1

 

Description of actions and initiatives to promote access to health care products for priority diseases and in priority countries as defined by the Access to Medicine Index

 

Global health
Prices of medicines

HC-BP-240a.2

 

List of products on the WHO List of Prequalified Medicinal Products as part of its Prequalification of Medicines Programme (PQP)

 

Currently there is no product on the list.

Affordability & Pricing

HC-BP-240b.1

 

Number of settlements of Abbreviated New Drug Application (ANDA) litigation that involved payments and/or provisions to delay bringing an authorized generic product to market for a defined time period

 

Not reported

HC-BP-240b.2

 

Percentage change in: (1) average list price and (2) average net price across U.S. product portfolio compared to previous year

 

The following overview shows the percentage change in the average list price (WAC) of our Healthcare US product portfolio compared to the previous year:

  • Rebif®: 7.1 %
  • Mavenclad®: 7.3 %
  • Bavencio®: 3.1 %
  • Gonal-f®: 7.4 %
  • Cetrotide®: 7.3 %
  • Ovidrel®: 7.4 %
  • Serostim®: 7.3 %
  • Saizen®: 6.4 %

 

 

 

 

See also: Prices of medicines

HC-BP-240b.3

 

Percentage change in: (1) list price and (2) net price of product with largest increase compared to previous year

 

We only report the percentage change in average list price across our U.S. product portfolio. The largest increase compared with the previous year amounted to 7.4% (Gonal-f® and Ovidrel®).

Drug Safety

HC-BP-250a.1

 

List of products listed in the Food and Drug Administration’s (FDA) MedWatch Safety Alerts for Human Medical Products database

 

Safety information and adverse event reporting program (FDA website)
Adverse event reporting system (FAERS) public dashboard (FDA website)

HC-BP-250a.2

 

Number of fatalities associated with products as reported in the FDA Adverse Event Reporting System

 

Adverse event reporting system (FAERS) public dashboard (FDA website)

HC-BP-250a.3

 

Number of recalls issued, total units recalled

 

In 2021 we had three drug product recalls in total. None of these recalls was global; they affected individual countries only. None of the recalls was related to the USA. None of the recalls was related to serious injury or fatality, all were either Class II or III. According to our internal policies, any recall type is reported and discussed with the relevant national regulatory authority, including the U.S. FDA. All recall processes are managed under a Global Standard Procedure “Product Recall and Withdrawal Management” which is applied worldwide for medicinal products (pharmaceutical prescription, biological) and devices.

HC-BP-250a.4

 

Total amount of product accepted for take-back, reuse, or disposal

 

We do not take back products for reuse. In line with legal requirements in each country we take back products for disposal.

HC-BP-250a.5

 

Number of FDA enforcement actions taken in response to violations of current Good Manufacturing Practices (cGMP), by type

 

We had no such FDA enforcement actions in 2021.

Counterfeit Drugs

HC-BP-260a.1

 

Description of methods and technologies used to maintain traceability of products throughout the supply chain and prevent counterfeiting

 

Product-related crime

HC-BP-260a.2

 

Discussion of process for alerting customers and business partners of potential or known risks associated with counterfeit products

 

We have implemented processes and procedures to ensure that all suspected counterfeit medicines are assessed by a team of experts. The scope of any notification that we provide is the outcome of strategic alignment between relevant functions (e.g. Medical, Procurement, Legal, Quality, Corporate Security, Regulatory Affairs, Communications). Levels of details and format of any notification, including the HA information and collaboration, dedicated patient communication, information/awareness communication to distributors, pharmacies, physicians etc. about the presence of counterfeit or diverted products in the market, is decided on a case-by-case basis in accordance with the identified risks and taking into account corporate, legal and regulatory responsibilities.

See also:
Product-related crime

HC-BP-260a.3

 

Number of actions that led to raids, seizure, arrests, and/or filing of criminal charges related to counterfeit products

 

Product-related crime

Ethical Marketing

HC-BP-270a.1

 

Total amount of monetary losses as a result of legal proceedings associated with false marketing claims

 

Not reported

HC-BP-270a.2

 

Description of code of ethics governing promotion of off-label use of products

 

Responsible interactions with health systems

Employee Recruitment, Development & Retention

HC-BP-330a.1

 

Discussion of talent recruitment and retention efforts for scientists and research and development personnel

 

Leading and developing employees
Attractive Enployer
Diversity, equity and inclusion

HC-BP-330a.2

 

(1) Voluntary and (2) involuntary turnover rate for: (a) executives/senior managers, (b) mid-level managers, (c) professionals, and (d) all others

 

Indicators: employees

Supply Chain Management

HC-BP-430a.1

 

Percentage of (1) entity's facilities and (2) Tier I suppliers' facilities participating in the Rx-360 International Pharmaceutical Supply Chain Consortium audit program or equivalent third-party audit programs for integrity of supply chain and ingredients

 

Our Healthcare business sector does not participate in the Rx-360 International Pharmaceutical Supply Chain Consortium. However, our facilities are frequently audited by the respective health authorities of the countries in which we distribute our healthcare products.

As a major supplier to the pharmaceutical industry, our Life Science business sector participates in the Rx-360 audit program.

Regarding our supplier base, we have access to sustainability audits and assessments of our suppliers through our membership in the industry initiatives “Together for Sustainability” (TfS) and “Pharmaceutical Supply Chain Initiative” (PSCI).

See also:
Sustainable supply chain managament

Business Ethics

HC-BP-510a.1

 

Total amount of monetary losses as a result of legal proceedings associated with corruption and bribery

 

Not reported

HC-BP-510a.2

 

Description of code of ethics governing interactions with health care professionals

 

Our Code of Conduct presents and explains our company’s values and our ethical integrity standards (e.g. “We cannot be bribed, and we do not offer bribes”, “We make our cooperation with healthcare partners transparent”, among many others). It is complemented by our Global Anti-Corruption Policy, which stipulates that all business activities must be conducted in line with legally applicable anti-corruption standards.

Specifically, with regard to our interactions with healthcare professionals, our Healthcare Ethical Guiding Principles address the topic through our “Responsible Interactions” and “Safeguard Independence” principles. These general governance documents are complemented by more than 20 standards and policies, together with procedural and guidance documents covering multiple interactions and engagements with healthcare professionals.

See also:
Responsible interactions with health systems
Compliance management

Activity metrics

HC-BP-000.A

 

Number of patients treated

 

In 2021, our Healthcare medicines were used to treat around 92 million patients. Additionally, we donated 182 million praziquantel tablets, enough to treat schistosomiasis in 73 million school-aged children in 2021.

See also:
Global Health

HC-BP-000.B

 

Number of drugs (1) in portfolio and (2) in research and development (Phases 1-3)

 

Healthcare portfolio
Research & Development (Healthcare)
Healthcare pipeline

Medical Equipment & Supplies

Affordability & Pricing

HC-MS-240a.1

 

Ratio of weighted average rate of net price increases (for all products) to the annual increase in the U.S. Consumer Price Index

 

Not reported

HC-MS-240a.2

 

Description of how price information for each product is disclosed to customers or to their agents

 

Life Science portfolio

Product Safety

HC-MS-250a.1

 

Number of recalls issued, total units recalled

 

We conduct monthly reviews of key performance quality indicators which include a review of multiple quality metrics including number of recalls. Quarterly trends are evaluated and reported through management reviews. 

In 2021, there were three recalls for our Life Science business:
US - FDA Class II (43 units recalled)
US – FDA Class III (20 units recalled)
UK– HPRA notified (1 batch impacted)

HC-MS-250a.2

 

List of products listed in the FDA’s MedWatch Safety Alerts for Human Medical Products database

 

In 2021, there were no Life Science products listed in the FDA’s MedWatch Safety Alerts for Human Medical Products database.

HC-MS-250a.3

 

Number of fatalities related to products as reported in the FDA Manufacturer and User Facility Device Experience database

 

In 2021, there were no fatalities related to our Life Science products reported to the FDA Manufacturer and User Facility Device Experience database.

HC-MS-250a.4

 

Number of FDA enforcement actions taken in response to violations of current Good Manufacturing Practices (cGMP), by type

 

Life Science received three U.S. FDA 483 forms in 2021.

Ethical Marketing

HC-MS-270a.1

 

Total amount of monetary losses as a result of legal proceedings associated with false marketing claims

 

Not reported

HC-MS-270a.2

 

Description of code of ethics governing promotion of off-label use of products

 

Before any products can be purchased from our Life Science platform, we use a customer screening process to guard against the purchase of our products for illegal purposes. Core steps of this process cover data sourcing, hazard assessment, safe-use/risk assessment and labels/safety data sheets. Besides our own process, we cooperate with responsible authorities in the U.S. (FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives, ATF), as well as international authorities (Interpol).
If we become aware that any of our Life Science products is used beyond our marketed intention, we evaluate the situation to determine whether to continue sales or not. Proper use of our products is included in our Terms and Conditions under "Use of Products".

See also:
Chemical product safety

Product Design & Lifecycle Management

HC-MS-410a.1

 

Discussion of process to assess and manage environmental and human health considerations associated with chemicals in products, and meet demand for sustainable products

 

We assess environmental, human health, and further sustainability aspects of chemical products that we are sourcing and/or producing and selling.
Furthermore, we screen our entire Life Science portfolio against growing demands arising from external stakeholders. For example, in alignment with the European Chemicals Strategy for Sustainability (CSS) we work towards a more sustainable product portfolio. Our Product Stewardship Council drives the transformation of existing products by considering appropriate measures like the substitution of chemical substances. Regarding future products, the selection of benign substance alternatives is done during ideation and early R&D through our Design for Sustainability program. In support of this, we have developed a tool which monitors latest chemical regulations. Besides flagging banned substances, it also flags substances that are already considered critical but not yet regulated. In addition to this, experts of the Chemicals Regulations teams are directly consulted for further insights and advice.

See also:
Chemical product safety
Sustainable products & packaging

HC-MS-410a.2

 

Total amount of products accepted for take-back and reused, recycled, or donated, broken down by: (1) devices and equipment and (2) supplies

 

Since 2013, we have been partnering with Seeding Labs, a non-profit organization dedicated to equipping scientists in resource-limited countries with scientific equipment and support. In 2021, we donated 1,626 items of scientific equipment valued at more than $360,000.

See also:
Sustainable products and packaging
Sustainability and Social Business Innovation

Supply Chain Management

HC-MS-430a.1

 

Percentage of (1) entity's facilities and (2) Tier I suppliers' facilities participating in third-party audit programs for manufacturing and product quality

 

As a major supplier to the pharmaceutical industry, our Life Science business participates in the Rx-360 audit program. The Life Science facilities are regularly audited by customers and respective health authorities for regulated products.

(1) Rx-360 audit programs are conducted across the Life Science business on a multi-year cycle with approximately 15% of our manufacturing facilities audited annually.

(2) Approximately 5% of our tier 1 supplier facilities participated in third party audit programs such as Rx-360.

HC-MS-430a.2

 

Description of efforts to maintain traceability within the distribution chain

 

Product safety (Life Science)
Quality & regulatory management (Life Science)

HC-MS-430a.3

 

Description of the management of risks associated with the use of critical materials

 

Sustainable supply chain management



Business Ethics

HC-MS-510a.1

 

Total amount of monetary losses as a result of legal proceedings associated with bribery or corruption

 

Not reported

HC-MS-510a.2

 

Description of code of ethics governing interactions with health care professionals

 

Responsible interactions with healthcare systems
Compliance management

Activity metrics

HC-MS-000.A

 

Number of units sold by product category

 

Not reported

Semiconductors

Greenhouse Gas Emissions

TC-SC-110a.1

 

(1) Gross global Scope 1 emissions

 

Indicators: environment

 

(2) amount of total emissions from perfluorinated compounds

 

Not reported

TC-SC-110a.2

 

Discussion of long-term and short-term strategy or plan to manage Scope 1 emissions, emissions reduction targets, and an analysis of performance against those targets

 

Climate action

Energy Management in Manufacturing

TC-SC-130a.1

 

(1) Total energy consumed

 

Indicators: environment

 

(2) percentage grid electricity

 

Not reported

 

(3) percentage renewable

 

Indicators: environment

Water Management

TC-SC-140a.1

 

(1) Total water withdrawn

 

Indicators: environment

 

(2) total water consumed, percentage of each in regions with High or Extremely High Baseline Water Stress

 

Water management
CDP Water security

Waste Management

TC-SC-150a.1

 

Amount of hazardous waste from manufacturing, percentage recycled

 

Indicators: environment

Employee Health & Safety

TC-SC-320a.1

 

Description of efforts to assess, monitor, and reduce exposure of employees to human health hazards

 

Health and safety

TC-SC-320a.2

 

Total amount of monetary losses as a result of legal proceedings associated with employee health and safety violations

 

Not reported

Recruiting & Managing a Global & Skilled Workforce

TC-SC-330a.1

 

Percentage of employees that are (1) foreign nationals and

 

Indicators: employees

 

(2) located offshore

 

Indicators: employees

Product Lifecycle Management

TC-SC-410a.1

 

Percentage of products by revenue that contain IEC 62474 declarable substances

 

Not reported

TC-SC-410a.2

 

Processor energy efficiency at a system-level for: (1) servers,

 

Not applicable

 

(2) desktops, and

 

Not applicable

 

(3) laptops

 

Not applicable

Materials Sourcing

TC-SC-440a.1

 

Description of the management of risks associated with the use of critical materials

 

Research & Development (Electronics)
Report on risks and opportunities

Intellectual Property Protection & Competitive Behavior

TC-SC-520a.1

 

Total amount of monetary losses as a result of legal proceedings associated with anti-competitive behavior regulations

 

Not reported

Activity metrics

TC-SC-000.A

 

Total production

 

Not reported

TC-SC-000.B

 

Percentage of production from owned facilities

 

Not reported

Good clinical practice (GCP)
An international quality standard issued by the “International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use” (ICH) that describes the responsibilities and expectations of all involved participants (e.g. sponsors, investigators, and ethics committees) in the conduct of clinical studies. The standard covers aspects of the design, implementation, oversight, recording, and reporting of clinical studies.
Good manufacturing practice (GMP)
A system for ensuring that products are consistently manufactured and controlled according to quality standards. These guidelines are used in the production of medicines, active pharmaceutical ingredients and cosmetics, as well as food and animal feed.
Pharmacovigilance
The science and activities related to the detection, evaluation, understanding, and prevention of adverse reactions or other drug-related problems.
Schistosomiasis
Schistosomiasis is a chronic condition and one of the most common and most devastating parasitic diseases in tropical countries. Flatworms transmit the disease. It is widespread in regions where large sections of the population have no access to clean water or sanitary installations. People are infected by the parasite when exposed to infested water during routine agricultural, domestic, occupational, and recreational activities. The minuscule larvae penetrate human skin, enter the blood vessels and attack internal organs. The infection rate is particularly high among children. Untreated schistosomiasis can cause potentially fatal chronic inflammation of vital organs as well as anemia, stunted growth and impaired learning ability, all of which have devastating consequences for the lives of children.
Scope 1
This includes emissions that occur in our company, for instance by generating energy from fossil fuels or by releasing process-related emissions.
Security
This relates to all necessary measures and governance activities to detect, analyze, handle, and mitigate security- and crime-based threats to the company. It is integral to protecting both our employees and the tangible and intangible assets of the company.
Stakeholder
People or organizations that have a legitimate interest in a company, entitling them to make justified demands. Stakeholders include people such as employees, business partners, neighbors in the vicinity of our sites, and shareholders.
WAC
Wholesale acquisition cost (WAC) means, with respect to a drug or biological, the manufacturer’s list price for the drug or biological to wholesalers or direct purchasers in the United States, not including prompt pay or other rebates, discounts or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of drug or biological pricing data. WAC is the US equivalent for Ex-Factory (EXF) wholesale price that our company uses globally to label the price from the manufacturer to the wholesaler.

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