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Segment Reporting
 9 Months Ended
Sep. 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 September 30,Nine Months Ended September 30,
2021202020212020
 ($ in millions)U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$2,580 $1,954 $4,534 $2,157 $1,559 $3,715 $7,108 $5,501 $12,609 $6,106 $4,281 $10,387 
Alliance revenue - Lynparza (1)
129 117 246 107 89 196 371 350 721 297 223 519 
Alliance revenue - Lenvima (1)
114 74 188 82 60 142 287 211 498 270 152 421 
Vaccines
Gardasil/Gardasil 9
839 1,154 1,993 579 608 1,187 1,605 2,539 4,144 1,209 1,732 2,941 
ProQuad/M-M-R II/Varivax
537 125 661 437 139 576 1,255 371 1,626 1,033 356 1,390 
Pneumovax 23
181 97 277 276 99 375 354 247 600 478 270 748 
RotaTeq135 92 227 114 96 210 364 229 593 355 246 601 
Vaqta32 16 48 32 19 51 80 58 138 79 60 139 
Hospital Acute Care
Bridion181 188 369 162 157 320 545 551 1,096 412 431 843 
Prevymis39 57 96 32 46 77 111 159 270 87 113 200 
Noxafil19 45 64 13 66 79 48 149 197 27 220 247 
Primaxin— 69 70 1 73 74 — 194 194 2 187 189 
Cancidas1 56 56 1 49 50 4 164 168 2 147 148 
Invanz(2)55 53 1 50 51 (2)159 157 7 152 159 
Zerbaxa(1)(1)(2)20 23 43 (5)(6)(11)57 54 112 
Immunology
Simponi— 203 203 — 209 209 — 619 619 — 615 615 
Remicade— 73 73 — 82 82 — 233 233 — 242 242 
Neuroscience
Belsomra23 58 81 18 63 81 56 183 238 67 177 244 
Virology
Isentress/Isentress HD
77 112 189 92 113 205 222 368 590 243 403 646 
Cardiovascular
Alliance revenue-Adempas/Verquvo (2)
73 27 100 78 5 83 222 26 248 200 16 216 
Adempas— 59 59 — 55 55 — 188 188 — 167 167 
Diabetes
Januvia365 487 852 342 479 821 997 1,448 2,445 1,110 1,339 2,449 
Janumet86 401 487 105 400 506 244 1,205 1,449 361 1,138 1,499 
Other pharmaceutical (3)
262 308 572 193 333 526 745 957 1,704 706 969 1,675 
Total Pharmaceutical segment sales5,670 5,826 11,496 4,842 4,872 9,714 14,611 16,103 30,714 13,108 13,690 26,797 
Animal Health:
Livestock190 675 864 165 593 758 508 1,996 2,503 448 1,697 2,145 
Companion Animals277 276 553 234 228 462 855 948 1,804 676 714 1,390 
Total Animal Health segment sales467 951 1,417 399 821 1,220 1,363 2,944 4,307 1,124 2,411 3,535 
Other segment sales (4)
— — — — — — — — — 23 — 23 
Total segment sales6,137 6,777 12,913 5,241 5,693 10,934 15,974 19,047 35,021 14,255 16,101 30,355 
Other (5)
139 101 241 9 (14)(5)192 (30)162 46 168 215 
 $6,276 $6,878 $13,154 $5,250 $5,679 $10,929 $16,166 $19,017 $35,183 $14,301 $16,269 $30,570 
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. Other for the three and nine months ended September 30, 2021 also includes $135 million and $185 million, respectively, related to the achievement of milestones for an out-licensed product that triggered contingent payments to Merck.
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 $2.9 billion for the three months ended September 30, 2021 and 2020, respectively, and $9.1 billion and $8.3 billion for the nine months ended September 30, 2021 and 2020, respectively.
Consolidated sales by geographic area where derived are as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
United States$6,276 $5,250 $16,166 $14,301 
Europe, Middle East and Africa3,342 2,946 9,912 8,537 
China1,307 791 3,004 2,060 
Japan638 671 1,929 1,875 
Asia Pacific (other than China and Japan)613 545 1,782 1,560 
Latin America599 499 1,631 1,374 
Other379 227 759 863 
 $13,154 $10,929 $35,183 $30,570 
A reconciliation of segment profits to Income from Continuing Operations Before Taxes is as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Segment profits:
Pharmaceutical segment$8,606 $7,026 $22,450 $19,235 
Animal Health segment505 459 1,629 1,347 
Other segment— (1)— 1 
Total segment profits9,111 7,484 24,079 20,583 
Other profits141 (28)29 135 
Unallocated:
Interest income7 9 27 48 
Interest expense(196)(203)(597)(624)
Amortization(360)(406)(1,231)(1,393)
Depreciation(358)(367)(1,031)(1,105)
Research and development(2,312)(3,231)(8,775)(7,251)
Restructuring costs(107)(113)(487)(265)
Other unallocated, net(660)(439)(2,044)(1,720)
 $5,266 $2,706 $9,970 $8,408 
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.