UPS and Merck, known as MSD outside the United States and Canada, today announced that the
companies have significantly broadened their existing distribution and
logistics agreement to include aspects of Merck’s global supply chain around
the world. UPS currently manages the distribution, warehousing and transportation
of Merck’s medicines and vaccines in North America.

“This expanded agreement with UPS allows us to focus on
our core business as a global healthcare leader that looks for innovative ways to
bring our medicines and vaccines to patients in emerging markets and markets
around the world,” said Willie A. Deese, executive vice president and
president, Merck Manufacturing Division. “UPS has the proven logistics
expertise to deliver Merck’s products with speed, consistency and care to our
customers and patients.” The UPS-Merck collaboration began in 2003 with
package transportation and delivery services in the United States. The agreement
expanded over time to include North American distribution, warehousing and multi-modal
transportation services. UPS will now provide these services in certain markets
in Asia and Latin America, including the emerging markets of China and Brazil. UPS also is providing transportation
services in Europe.

“The UPS-Merck collaboration brings together the
expertise of two companies that are globally strong, customer-focused and
committed to driving positive change in the healthcare supply chain,” said
Kurt Kuehn, UPS chief financial officer. “UPS is investing deeply to align
the broad range of capabilities that we’ve developed to meet the very unique
needs of this industry.” Innovative solutions to better meet customer
needs are already underway in China
and Brazil
where UPS is establishing a distribution center to support Merck’s
manufacturing and packaging facilities as a way to help speed delivery of Merck
products in those markets. In certain other markets such as the United States and Canada, UPS is managing warehousing
operations for Merck products that require strict temperature and environmental
controls, including vaccines and specialty pharmaceutical products.

Merck expects to realize long term cost efficiencies as a
result of the expanded agreement with UPS. Financial details of the agreement were
not disclosed. Meanwhile, Merck does maintain distribution agreements with
other logistics and delivery providers.