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Segment Reporting
 3 Months Ended
Mar. 31, 2017
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting
The Company’s operations are principally managed on a products basis and include the Pharmaceutical, Animal Health, Healthcare Services and Alliances operating segments. The Animal Health, Healthcare Services and Alliances segments are not material for separate reporting.
The Pharmaceutical segment includes human health pharmaceutical and vaccine products. Human health pharmaceutical products consist of therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. The Company sells these human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies and managed health care providers such as health maintenance organizations, pharmacy benefit managers and other institutions. Vaccine products consist of preventive pediatric, adolescent and adult vaccines, primarily administered at physician offices. The Company sells these human health vaccines primarily to physicians, wholesalers, physician distributors and government entities. A large component of pediatric and adolescent vaccine sales are made to the U.S. Centers for Disease Control and Prevention Vaccines for Children program, which is funded by the U.S. government. Additionally, the Company sells vaccines to the Federal government for placement into vaccine stockpiles. Sales of vaccines in most major European markets were marketed through the Company’s SPMSD joint venture until its termination on December 31, 2016.
The Company also has animal health operations that discover, develop, manufacture and market animal health products, including vaccines, which the Company sells to veterinarians, distributors and animal producers. The Company’s Healthcare Services segment provides services and solutions that focus on engagement, health analytics and clinical services to improve the value of care delivered to patients.

Sales of the Company’s products were as follows:
 
Three Months Ended 
 March 31,
 ($ in millions)
2017
 
2016
Primary Care and Women’s Health
 
 
 
Cardiovascular
 
 
 
Zetia
$
334

 
$
612

Vytorin
241

 
277

Liptruzet
49

 
23

Adempas
84

 
33

Diabetes
 
 
 
Januvia
839

 
906

Janumet
496

 
506

General Medicine and Women’s Health
 
 
 
Implanon/Nexplanon
170

 
134

NuvaRing
160

 
175

Follistim AQ
81

 
94

Hospital and Specialty
 
 
 
Hepatitis
 
 
 
Zepatier
378

 
50

HIV
 
 
 
Isentress
305

 
340

Hospital Acute Care
 
 
 
Bridion
148

 
90

Noxafil
141

 
145

Invanz
136

 
114

Cancidas
121

 
133

Cubicin
96

 
292

Primaxin
62

 
73

Immunology
 
 
 
Remicade
229

 
349

Simponi
184

 
188

Oncology
 
 
 
Keytruda
584

 
249

Emend
133

 
126

Temodar
66

 
66

Diversified Brands
 
 
 
Respiratory
 
 
 
Singulair
186

 
237

Nasonex
139

 
229

Dulera
82

 
113

Other
 
 
 
Cozaar/Hyzaar
112

 
126

Arcoxia
103

 
111

Fosamax
61

 
75

Vaccines (1)
 
 
 
Gardasil/Gardasil 9
532

 
378

ProQuad/M-M-R II/Varivax
355

 
357

RotaTeq
224

 
188

Pneumovax 23
163

 
107

Zostavax
154

 
125

Other pharmaceutical (2)
1,037

 
1,083

Total Pharmaceutical segment sales
8,185

 
8,104

Other segment sales (3)
1,033

 
905

Total segment sales
9,218

 
9,009

Other (4)
216

 
303

 
$
9,434

 
$
9,312

(1) 
On December 31, 2016, Merck and Sanofi Pasteur terminated their equally-owned joint venture, SPMSD, which marketed vaccines in most major European markets. Accordingly, vaccine sales in 2017 include sales in the European markets that were previously part of SPMSD. Amounts for 2016 do not include sales of vaccines sold through SPMSD, the results of which are reflected in equity income from affiliates which is included in Other (income) expense, net. Amounts for 2016 do, however, include supply sales to SPMSD.
(2) 
Other pharmaceutical primarily reflects sales of other human health pharmaceutical products, including products within the franchises not listed separately.
(3) 
Represents the non-reportable segments of Animal Health, Healthcare Services and Alliances.
(4) 
Other is primarily comprised of miscellaneous corporate revenues, including revenue hedging activities, as well as third-party manufacturing sales. Other in the first quarter of 2017 and 2016 also includes $50 million and $75 million, respectively, related to the sale of the marketing rights to certain products.
A reconciliation of segment profits to Income before taxes is as follows:
 
Three Months Ended 
 March 31,
($ in millions)
2017
 
2016
Segment profits:
 
 
 
Pharmaceutical segment
$
5,180

 
$
5,117

Other segments
452

 
355

Total segment profits
5,632

 
5,472

Other profits
142

 
227

Unallocated:
 
 
 
Interest income
97

 
79

Interest expense
(182
)
 
(172
)
Equity income from affiliates
(12
)
 
20

Depreciation and amortization
(370
)
 
(428
)
Research and development
(1,599
)
 
(1,373
)
Amortization of purchase accounting adjustments
(778
)
 
(1,133
)
Restructuring costs
(151
)
 
(91
)
Other unallocated, net
(776
)
 
(977
)
 
$
2,003

 
$
1,624


Segment profits are comprised of segment sales less standard costs and certain operating expenses directly incurred by the segments. For internal management reporting presented to the chief operating decision maker, Merck does not allocate materials and production costs, other than standard costs, the majority of research and development expenses or general and administrative expenses, nor the cost of financing these activities. Separate divisions maintain responsibility for monitoring and managing these costs, including depreciation related to fixed assets utilized by these divisions and, therefore, they are not included in segment profits. In addition, costs related to restructuring activities, as well as the amortization of purchase accounting adjustments are not allocated to segments.
Other profits are primarily comprised of miscellaneous corporate profits, as well as operating profits related to third-party manufacturing sales.
Other unallocated, net includes expenses from corporate and manufacturing cost centers, goodwill and intangible asset impairment charges, gains or losses on sales of businesses, expense or income related to changes in the estimated fair value of contingent consideration, and other miscellaneous income or expense items.