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Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Effect of Net Investment Hedges on OCI and the Consolidated Statement of Income
The effects of the Company’s net investment hedges on OCI and the Consolidated Statement of Income are shown below:
Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income (1)
Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing
Three Months Ended March 31,Three Months Ended March 31,
($ in millions)2023202220232022
Net Investment Hedging Relationships
Foreign exchange contracts$1 $(16)$1 $(1)
Euro-denominated notes52 (53)— — 
(1)    No amounts were reclassified from AOCL into income related to the sale of a subsidiary.
Fair Value of Derivatives on a Gross Basis Segregated between those Derivatives that are Designated as Hedging Instruments and those that are Not Designated as Hedging Instruments
Presented in the table below is the fair value of derivatives on a gross basis segregated between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
  March 31, 2023December 31, 2022
  Fair Value of DerivativeU.S. Dollar
Notional		Fair Value of DerivativeU.S. Dollar
Notional
($ in millions)AssetLiabilityAssetLiability
Derivatives Designated as Hedging InstrumentsBalance Sheet Caption
Interest rate swap contractsOther Assets$1 $— $300 $— $— $— 
Interest rate swap contractsOther Noncurrent Liabilities— 1 200 — — — 
Foreign exchange contractsOther current assets104 — 4,253 220 — 4,824 
Foreign exchange contractsOther Assets32 — 1,756 27 — 1,609 
Foreign exchange contractsAccrued and other current liabilities— 116 3,444 — 101 2,691 
Foreign exchange contractsOther Noncurrent Liabilities— 2 120 — 1 91 
  $137 $119 $10,073 $247 $102 $9,215 
Derivatives Not Designated as Hedging InstrumentsBalance Sheet Caption      
Foreign exchange contractsOther current assets$121 $— $9,507 $186 $— $8,540 
Foreign exchange contractsOther Assets1 — 65 — — — 
Foreign exchange contractsAccrued and other current liabilities— 164 10,592 — 307 10,926 
Foreign exchange contractsOther Noncurrent Liabilities— 1 124 — — — 
  $122 $165 $20,288 $186 $307 $19,466 
  $259 $284 $30,361 $433 $409 $28,681 
Information on Derivative Positions Subject to Master Netting Arrangements as if they were Presented on a Net Basis The following table provides information on the Company’s derivative positions subject to these master netting arrangements as if they were presented on a net basis, allowing for the right of offset by counterparty and cash collateral exchanged per the master agreements and related credit support annexes:
 March 31, 2023December 31, 2022
($ in millions)AssetLiabilityAssetLiability
Gross amounts recognized in the condensed consolidated balance sheet$259 $284 $433 $409 
Gross amounts subject to offset in master netting arrangements not offset in the condensed consolidated balance sheet(148)(148)(220)(220)
Cash collateral received/posted(13)— (66)(19)
Net amounts$98 $136 $147 $170 
Location and Amount of Pretax Gains and Losses of Derivatives
The table below provides information regarding the location and amount of pretax gains and losses of derivatives designated in fair value or cash flow hedging relationships:
Three Months Ended March 31,
($ in millions)202320222023202220232022
Financial Statement Caption in which Effects of Fair Value or Cash Flow
Hedges are Recorded
Sales
Other (income) expense, net (1)
Other comprehensive income (loss)
$14,487 $15,901 $89 $708 $(115)$60 
(Gain) loss on fair value hedging relationships:
Interest rate swap contracts
Hedged items— — — (10)— — 
Derivatives designated as hedging instruments— — — 4 — — 
Impact of cash flow hedging relationships:
Foreign exchange contracts
Amount of (loss) gain recognized in OCI on derivatives
— — — — (66)148 
Increase in Sales as a result of AOCL reclassifications
101 67 — — (101)(67)
Interest rate contracts
Amount of gain recognized in Other (income) expense, net on derivatives
— — (1)(1)— — 
Amount of loss recognized in OCI on derivatives
— — — — (1)(1)
(1)    Interest expense is a component of Other (income) expense, net.
Income Statement Effects of Derivatives Not Designated as Hedging Instruments
The table below provides information regarding the income statement effects of derivatives not designated as hedging instruments:
Amount of Derivative Pretax (Gain) Loss Recognized in Income
Three Months Ended March 31,
($ in millions)20232022
Derivatives Not Designated as Hedging InstrumentsIncome Statement Caption
Foreign exchange contracts (1)
Other (income) expense, net$13 $28 
Foreign exchange contracts (2)
Sales2 (2)
(1)    These derivative contracts primarily mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates.
(2)    These derivative contracts serve as economic hedges of forecasted transactions.
Information on Investments in Debt and Equity Securities
Information on investments in debt and equity securities is as follows:
 March 31, 2023December 31, 2022
 Amortized
Cost		Gross UnrealizedFair
Value		Amortized
Cost		Gross UnrealizedFair
Value
($ in millions)GainsLossesGainsLosses
Commercial paper$663 $— $— $663 $498 $— $— $498 
U.S. government and agency securities92 — — 92 68 — — 68 
Corporate notes and bonds4 — — 4 3 — — 3 
Foreign government bonds1 — — 1 — — — — 
Total debt securities$760 $— $— $760 $569 $— $— $569 
Publicly traded equity securities (1)
1,585 1,284 
Total debt and publicly traded equity securities$2,345 $1,853 
(1)    Unrealized net gains of $338 million were recorded in Other (income) expense, net in the first quarter of 2023 on equity securities still held at March 31, 2023. Unrealized net losses of $225 million were recorded in Other (income) expense, net in the first quarter of 2022 on equity securities still held at March 31, 2022.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
Fair Value Measurements UsingFair Value Measurements Using
 Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
($ in millions)March 31, 2023December 31, 2022
Assets
Investments
Commercial paper$— $663 $— $663 $— $498 $— $498 
U.S. government and agency securities— 22 — 22 — — — — 
Foreign government bonds— 1 — 1 — — — — 
Publicly traded equity securities1,284 — — 1,284 1,015 — — 1,015 
 1,284 686 — 1,970 1,015 498 — 1,513 
Other assets (1)
U.S. government and agency securities70 — — 70 68 — — 68 
Corporate notes and bonds4 — — 4 3 — — 3 
Publicly traded equity securities301 — — 301 269 — — 269 
375 — — 375 340 — — 340 
Derivative assets (2)
Purchased currency options— 139 — 139 — 215 — 215 
Forward exchange contracts— 119 — 119 — 218 — 218 
Interest rate swap contracts— 1 — 1 — — — — 
 — 259 — 259 — 433 — 433 
Total assets$1,659 $945 $— $2,604 $1,355 $931 $— $2,286 
Liabilities
Other liabilities
Contingent consideration$— $— $353 $353 $— $— $456 $456 
Derivative liabilities (2)
Forward exchange contracts— 276 — 276 — 402 — 402 
Written currency options— 7 — 7 — 7 — 7 
Interest rate swap contracts— 1 — 1 — — — — 
— 284 — 284 — 409 — 409 
Total liabilities$— $284 $353 $637 $— $409 $456 $865 
(1)    Investments included in other assets are restricted as to use, including for the payment of benefits under employee benefit plans.
(2)    The fair value determination of derivatives includes the impact of the credit risk of counterparties to the derivatives and the Company’s own credit risk, the effects of which were not significant.
Information About the Changes in Liabilities for Contingent Consideration
Summarized information about the changes in the fair value of liabilities for contingent consideration associated with business combinations is as follows:
($ in millions)20232022
Fair value January 1$456 $777 
Changes in estimated fair value (1)
14 (84)
Payments(117)(119)
Other— (2)
Fair value March 31 (2)
$353 $572 
(1)    Recorded in Cost of sales, Research and development expenses, and Other (income) expense, net. Includes cumulative translation adjustments.
(2)    At March 31, 2023, $263 million of the liabilities relate to the termination of the Sanofi Pasteur MSD joint venture in 2016. As part of the termination, Merck recorded a liability for contingent future royalty payments of 11.5% on net sales of all Merck products that were previously sold by the joint venture through December 31, 2024. The fair value of this liability is determined utilizing the estimated amount and timing of projected cash flows using a risk-adjusted discount rate to present value the cash flows. Balance at March 31, 2023 includes $127 million recorded as a current liability for amounts expected to be paid within the next 12 months.