Event Brief of Q2 2006 Merck & Co., Inc. Earnings Conference Call - Part 2.

(From Fair Disclosure Wire)

DICK CLARK: In relation to your second question concerning all the changes we're making, when I look at our scorecard through the first half of the year and it certainly from our perspective looks really positive, the biggest challenge we have and I think the one we're making the best progress on is looking at business processes that go across the Company, across geographies, across functions, across divisions and to get a better alignment on how we can either improve those business processes, improve it from the shared services outsourcing capability, and the fact that that is something new for Merck, whether I would get not only acceptance by an uptake in acceleration of that. And certainly, we're just at the beginning of that. That's why I feel confident in reducing the SG&A and the marketing and administration costs moving forward, but there are total acceptance for that. We just had a senior meeting around that and the fact that we have agreed to move forward with that from an alignment standpoint, from the Merck culture exceeds my expectation and it's something we haven't done in the history of this Company and there's alignment around it. I think it was a major breakthrough for us and I think as we move forward, you will see that capability and alignment along with what we're doing from a Six Sigma really bring the costs down and actually give better service throughout the world because we will be much better aligned from a business process across the Company instead of every geography and function and division doing it on their own. That's going to be significant improvements for the Company. GRAEME BELL: Thank you. Next question, please, Michelle. OPERATOR: Steve Scala, Cowen. STEVE SCALA, ANALYST, SG COWEN & CO.: Thank you, the 24 to 26% royalty on Gardasil seems strikingly large. Can you break out what entities are getting what percent? Is there any step-up or step-down in that rate over time? How does it compare to royalties say on ZOSTAVAX, VARIVAX or RotaTeq? And will a similar royalty be paid for Gardasil foreign sales by the JV? Thank you. JUDY LEWENT: Okay, we are not getting into the detailed…