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Segment Reporting
 6 Months Ended
Jun. 30, 2021
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 during the first quarter of 2020.
Sales of the Company’s products were as follows:
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
 ($ in millions)U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$2,347 $1,829 $4,176 $2,043 $1,345 $3,388 $4,528 $3,548 $8,076 $3,949 $2,722 $6,672 
Alliance revenue - Lynparza (1)
124 124 248 105 73 178 242 233 475 190 133 323 
Alliance revenue - Lenvima (1)
88 93 181 98 53 151 173 137 310 188 91 279 
Vaccines
Gardasil/Gardasil 9
454 781 1,234 168 488 656 766 1,385 2,151 629 1,124 1,753 
ProQuad/M-M-R II/Varivax
386 130 516 263 115 378 718 246 965 596 217 813 
RotaTeq111 97 208 100 68 168 229 137 366 241 150 391 
Pneumovax 23
100 52 152 21 96 117 173 150 323 203 170 373 
Vaqta22 34 56 17 11 28 47 43 90 47 41 88 
Hospital Acute Care
Bridion197 190 387 107 117 224 364 363 727 250 274 524 
Prevymis37 56 93 28 35 63 72 103 174 55 68 123 
Noxafil14 52 66 6 67 73 29 104 133 14 154 168 
Primaxin— 60 60 1 63 64 — 125 125 1 114 115 
Cancidas1 53 54 (2)45 43 3 108 111 1 98 98 
Invanz(4)52 48 — 43 43 — 104 104 6 102 108 
Zerbaxa(2)1 (1)17 15 32 (4)(5)(9)37 32 69 
Immunology
Simponi— 202 202 — 191 191 — 416 416 — 406 406 
Remicade— 75 75 — 73 73 — 160 160 — 160 160 
Neuroscience
Belsomra14 63 78 22 61 84 32 125 157 49 114 163 
Virology
Isentress/Isentress HD
74 118 192 76 120 196 145 256 401 151 290 441 
Cardiovascular
Alliance revenue-Adempas/Verquvo (2)
81 (7)74 73 6 79 149 — 149 122 11 133 
Adempas— 74 74 — 57 57 — 129 129 — 113 113 
Diabetes
Januvia284 500 784 413 441 854 632 961 1,593 768 860 1,628 
Janumet74 403 477 143 348 490 158 805 962 256 737 993 
Other pharmaceutical (3)
245 301 546 259 289 548 485 644 1,130 513 637 1,149 
Total Pharmaceutical segment sales4,647 5,333 9,980 3,958 4,220 8,178 8,941 10,277 19,218 8,266 8,818 17,083 
Animal Health:
Livestock161 659 821 122 526 648 318 1,322 1,640 284 1,102 1,386 
Companion Animals298 353 651 220 233 453 578 672 1,250 442 486 928 
Total Animal Health segment sales459 1,012 1,472 342 759 1,101 896 1,994 2,890 726 1,588 2,314 
Other segment sales (4)
— — — — — — — — — 23 — 23 
Total segment sales5,106 6,345 11,452 4,300 4,979 9,279 9,837 12,271 22,108 9,015 10,406 19,420 
Other (5)
(6)(44)(50)22 52 74 53 (132)(79)38 182 221 
 $5,100 $6,301 $11,402 $4,322 $5,031 $9,353 $9,890 $12,139 $22,029 $9,053 $10,588 $19,641 
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 Healthcare Services segment. All the businesses in the Healthcare Services segment were fully divested in the first quarter of 2020.
(5)    Other is primarily comprised of miscellaneous corporate revenues, including revenue hedging activities, as well as third-party manufacturing sales.
Product sales are recorded net of the provision for discounts, including chargebacks, which are customer discounts that occur when a contracted customer purchases through an intermediary wholesale purchaser, and rebates that are owed based upon definitive contractual agreements or legal requirements with private sector and public sector (Medicaid and Medicare Part D) benefit providers, after the final dispensing of the product by a pharmacy to a benefit plan participant. These discounts, in the aggregate, reduced U.S. sales by $3.1 billion and $2.6 billion for the three months ended June 30, 2021 and 2020, respectively, and $6.0 billion and $5.4 billion for the six months ended June 30, 2021 and 2020, respectively.
Consolidated sales by geographic area where derived are as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
($ in millions)2021202020212020
United States$5,100 $4,322 $9,890 $9,053 
Europe, Middle East and Africa3,333 2,622 6,569 5,591 
China975 623 1,697 1,269 
Japan661 621 1,291 1,204 
Asia Pacific (other than China and Japan)594 489 1,168 1,015 
Latin America532 423 1,032 875 
Other207 253 382 634 
 $11,402 $9,353 $22,029 $19,641 
A reconciliation of segment profits to Income from Continuing Operations Before Taxes is as follows:
 Three Months Ended
June 30,		Six Months Ended
June 30,
($ in millions)2021202020212020
Segment profits:
Pharmaceutical segment$7,257 $5,832 $13,845 $12,209 
Animal Health segment552 408 1,124 887 
Other segment— — — 2 
Total segment profits7,809 6,240 14,969 13,098 
Other profits(79)43 (113)163 
Unallocated:
Interest income9 14 20 39 
Interest expense(202)(209)(401)(421)
Amortization(357)(599)(871)(988)
Depreciation(332)(367)(673)(733)
Research and development(4,175)(1,956)(6,480)(4,020)
Restructuring costs(82)(82)(380)(152)
Other unallocated, net(874)(343)(1,367)(1,284)
 $1,717 $2,741 $4,704 $5,702 
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 intangible assets and 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 measurement of liabilities for contingent consideration, and other miscellaneous income or expense items.