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Segment Reporting
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
The Company’s operations are principally managed on a products basis and include two operating segments, which are the Pharmaceutical and Animal Health segments, both of which are reportable segments.
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. Human health 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.
The Animal Health segment discovers, develops, manufactures and markets a wide range of veterinary pharmaceutical and vaccine products, as well as health management solutions and services, for the prevention, treatment and control of disease in all major livestock and companion animal species. The Company also offers an extensive suite of digitally connected identification, traceability and monitoring products. The Company sells its products to veterinarians, distributors and animal producers.
The Company previously had a Healthcare Services segment that provided services and solutions focused on engagement, health analytics and clinical services to improve the value of care delivered to patients. The Company divested the remaining businesses in this segment in the first quarter of 2020.
The Company previously had an Alliances segment that primarily included activity from the Company’s relationship with AstraZeneca LP related to sales of Nexium and Prilosec, which concluded in 2018.
Sales of the Company’s products were as follows:
Years Ended December 31202020192018
U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$8,352 $6,028 $14,380 $6,305 $4,779 $11,084 $4,150 $3,021 $7,171 
Alliance revenue - Lynparza (1)
417 308 725 269 176 444 127 61 187 
Alliance revenue - Lenvima (1)
359 220 580 239 165 404 95 54 149 
Emend18 127 145 183 205 388 312 210 522 
Vaccines
Gardasil/Gardasil 9
1,755 2,184 3,938 1,831 1,905 3,737 1,873 1,279 3,151 
ProQuad/M-M-R II/Varivax1,378 500 1,878 1,683 592 2,275 1,430 368 1,798 
Pneumovax 23
727 359 1,087 679 247 926 627 281 907 
RotaTeq486 311 797 506 284 791 496 232 728 
Vaqta103 67 170 130 108 238 127 112 239 
Hospital Acute Care
Bridion583 615 1,198 533 598 1,131 386 531 917 
Noxafil42 287 329 282 380 662 353 389 742 
Prevymis119 162 281 84 81 165 46 27 72 
Primaxin2 248 251 2 271 273 7 258 265 
Cancidas7 207 213 6 242 249 12 314 326 
Invanz9 202 211 30 233 263 253 243 496 
Cubicin46 106 152 92 165 257 191 176 367 
Zerbaxa74 56 130 63 58 121 42 45 87 
Immunology
Simponi— 838 838 — 830 830 — 893 893 
Remicade— 330 330 — 411 411 — 582 582 
Neuroscience
Belsomra81 247 327 92 214 306 96 164 260 
Virology
Isentress/Isentress HD326 531 857 398 576 975 513 627 1,140 
Zepatier60 107 167 118 252 370 8 447 455 
Cardiovascular
Zetia(1)483 482 14 575 590 45 813 857 
Vytorin12 171 182 16 269 285 10 487 497 
Atozet— 453 453 — 391 391 — 347 347 
Alliance revenue - Adempas (2)
259 22 281 194 10 204 134 5 139 
Adempas— 220 220 — 215 215 — 190 190 
Diabetes
Januvia1,470 1,836 3,306 1,724 1,758 3,482 1,969 1,718 3,686 
Janumet477 1,494 1,971 589 1,452 2,041 811 1,417 2,228 
Women’s Health
Implanon/Nexplanon488 192 680 568 219 787 495 208 703 
NuvaRing110 127 236 742 136 879 722 180 902 
Diversified Brands
Singulair18 444 462 29 669 698 20 688 708 
Cozaar/Hyzaar21 365 386 24 418 442 23 431 453 
Arcoxia— 258 258 — 288 288 — 335 335 
Nasonex12 206 218 9 284 293 23 353 376 
Follistim AQ84 109 193 103 138 241 115 153 268 
Other pharmaceutical (3)
1,555 3,152 4,709 1,416 3,204 4,615 1,231 3,308 4,546 
Total Pharmaceutical segment sales19,449 23,572 43,021 18,953 22,798 41,751 16,742 20,947 37,689 
Animal Health:
Livestock612 2,327 2,939 582 2,201 2,784 528 2,102 2,630 
Companion Animals872 892 1,764 724 885 1,609 710 872 1,582 
Total Animal Health segment sales1,484 3,219 4,703 1,306 3,086 4,393 1,238 2,974 4,212 
Other segment sales (4)
23 — 23 174 1 175 248 2 250 
Total segment sales20,956 26,791 47,747 20,433 25,885 46,319 18,228 23,923 42,151 
Other (5)
71 176 247 86 436 521 118 26 143 
 $21,027 $26,967 $47,994 $20,519 $26,321 $46,840 $18,346 $23,949 $42,294 
U.S. plus international may not equal total due to rounding.
(1)     Alliance revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs (see Note 4).
(2)     Alliance revenue represents Merck’s share of profits from sales in Bayer’s marketing territories, which are product sales net of cost of sales and commercialization costs (see Note 4).
(3)    Other pharmaceutical primarily reflects sales of other human health pharmaceutical products, including products within the franchises not listed separately.
(4)    Represents sales for the non-reportable segments of Healthcare Services (fully divested in the first quarter of 2020) and Alliances (which concluded in 2018).
(5)    Other is primarily comprised of miscellaneous corporate revenues, including revenue hedging activities, as well as third-party manufacturing sales.
Consolidated sales by geographic area where derived are as follows:
Years Ended December 31202020192018
United States$21,027 $20,519 $18,346 
Europe, Middle East and Africa13,600 12,707 12,213 
China3,624 3,207 2,184 
Japan3,376 3,583 3,212 
Asia Pacific (other than China and Japan)2,864 2,943 2,909 
Latin America2,274 2,469 2,415 
Other1,229 1,412 1,015 
 $47,994 $46,840 $42,294 
A reconciliation of segment profits to Income before taxes is as follows:
Years Ended December 31202020192018
Segment profits:
Pharmaceutical segment$29,722 $28,324 $24,871 
Animal Health segment1,650 1,609 1,659 
Other segments1 (7)103 
Total segment profits31,373 29,926 26,633 
Other profits140 363 6 
Unallocated:
Interest income59 274 343 
Interest expense(831)(893)(772)
Depreciation and amortization(1,602)(1,593)(1,352)
Research and development(13,072)(9,499)(9,432)
Amortization of purchase accounting adjustments(1,168)(1,406)(2,664)
Restructuring costs(578)(638)(632)
Charge related to the termination of a collaboration with Samsung
— — (423)
Other unallocated, net(5,530)(5,070)(3,006)
Income Before Taxes$8,791 $11,464 $8,701 
Pharmaceutical segment profits are comprised of segment sales less standard costs, as well as selling, general and administrative expenses directly incurred by the segment. Animal Health segment profits are comprised of segment sales, less all cost of sales, as well as selling, general and administrative expenses and research and development costs directly incurred by the segment. For internal management reporting presented to the chief operating decision maker, Merck does not allocate the remaining cost of sales not included in segment profits as described above, research and development expenses incurred in Merck Research Laboratories, the Company’s research and development division that focuses on human health-related activities, 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 other intangible asset impairment charges, gains or losses on sales of businesses, expense or income related to changes in the estimated fair value of liabilities for contingent consideration, and other miscellaneous income or expense items.
Equity (income) loss from affiliates and depreciation and amortization included in segment profits is as follows:
PharmaceuticalAnimal HealthAll OtherTotal
Year Ended December 31, 2020      
Included in segment profits:
Equity (income) loss from affiliates$6 $— $— $6 
Depreciation and amortization690 164 1 855 
Year Ended December 31, 2019      
Included in segment profits:
Equity (income) loss from affiliates$— $— $— $— 
Depreciation and amortization534 109 10 653 
Year Ended December 31, 2018      
Included in segment profits:
Equity (income) loss from affiliates$4 $— $— $4 
Depreciation and amortization411 82 10 503 
Property, plant and equipment, net, by geographic area where located is as follows:
December 31202020192018
United States$10,526 $8,974 $8,306 
Europe, Middle East and Africa6,059 4,767 3,706 
Asia Pacific (other than China and Japan)761 714 684 
Latin America252 266 264 
China217 174 167 
Japan166 152 159 
Other5 6 5 
 $17,986 $15,053 $13,291 
The Company does not disaggregate assets on a products and services basis for internal management reporting and, therefore, such information is not presented.