Raymond Gilmartin, Chairman & CEO of Merck

This is a partial transcript from Your World with Neil Cavuto, January 31, 2002. Click here for complete access to all of Neil Cavuto's CEO interviews. 

NEIL CAVUTO, HOST: CEOs from all across corporate America are indeed huddling at the Waldorf all this week and through the weekend. Joining me now is the man who heads up the nation's second biggest drug company and one of the attendees, Ray Gilmartin, the chairman and CEO of drug giant Merck. Ray, good to have you back.

RAYMOND GILMARTIN, CHAIRMAN & CEO, MERCK: Thank you.

CAVUTO: What is the mood like in there?

GILMARTIN: Oh, I think the mood is very positive. The sessions that I've been in so far today I think have been very important, very constructive. Of course, given the industry I'm in, I'm dealing with issues around health and economic growth.

And one of the benefits of being here is that we have so many different parts of the world represented both in developing and developed nations as well as all sectors of society. So it's a great opportunity to develop some new relationships and partnerships.

CAVUTO: Some of those protesters, as you know, think a lot of you rich companies in there have to share your wealth with the folks across the globe. It is a sort of like them versus us issue. Is it that black and white?

GILMARTIN: Well, in terms of sharing our wealth, I think that what we become engaged in, particularly at Merck, is sharing our experience and expertise in helping people gain access to our medicines. In some respects, we're sharing wealth in the sense that we're offering our HIV-AIDS drugs to developing countries at prices at which we make no profit so that we can basically take price off the table and start working on issues of infrastructure, prevention, and training of medical personnel. And I think we're making great progress on that.

CAVUTO: Are you bugged, Ray, when a lot of people say you're not doing enough? And not just you. I'm talking about a lot of the protesters out there who cite all of you corporate guys who, they claim, should do more. Or do you feel that you're just sort of vilified unfairly?

GILMARTIN: Well, I think that where our source of encouragement and reinforcement comes from is for the governments that we're working with, bodies such as the World Health Organization, the World Bank, UNAIDS, governments such as Botswana, where we are doing a lot of work with them. So that's the source of positive reinforcement.

The mood and the tone and the attitude toward the pharmaceutical industry has changed significantly in the last two or three years and I can really sense that today.

CAVUTO: You know, your profits around the latest period, you had better than a five-and-a-half percent increase in the fourth quarter and a sign that things are turning around. You've had a beleaguered year or so in the stock market. You think that this is now turnaround time?

GILMARTIN: Well, we just announced earlier this week the fact that we're setting up our subsidiary, Merck-Medco, as a separate, publicly traded company. And that will allow investors to have, as we see it, two pure plays, on in the PBM industry, the other in the pharmaceutical industry.

The pharmaceutical side of the business, we're looking at accelerating revenue growth, leading to double-digit earnings growth next year. And we're introducing a whole array of new drugs between now and 2006, finally for new ones. And so we're quite confident in our growth prospects and we're looking forward, basically, to have them clear to investors so they can compare against our peer group in terms of our growth characteristics and profitability characteristics.

CAVUTO: All right. Raymond Gilmartin, thank you very much. Good seeing you.

GILMARTIN: Thank you.

CAVUTO: The head of Merck, Raymond Gilmartin.

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