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Segment Reporting
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
The Company’s operations are principally managed on a product basis and include two operating segments, Pharmaceutical and Animal Health, 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. 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, animal producers, farmers and pet owners.
Sales of the Company’s products were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
 ($ in millions)U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$3,795 $2,543 $6,338 $3,331 $2,095 $5,426 $11,142 $7,261 $18,403 $9,307 $6,180 $15,487 
Alliance revenue-Lynparza (1)
153 146 299 144 140 284 439 445 884 427 397 825 
Alliance revenue-Lenvima (1)
160 100 260 142 60 202 476 258 734 426 235 660 
Welireg51 3 54 38 — 38 141 6 146 83 — 83 
Alliance revenue-Reblozyl (2)
43 10 52 32 7 39 108 33 142 87 37 124 
Vaccines
Gardasil/Gardasil 9
838 1,746 2,585 957 1,337 2,294 1,718 5,297 7,015 1,803 3,624 5,428 
ProQuad/M-M-R II/Varivax
567 146 713 532 136 668 1,435 388 1,823 1,337 379 1,716 
RotaTeq108 48 156 154 102 256 381 203 584 427 218 644 
Vaxneuvance182 33 214 15 1 16 423 65 488 31 1 32 
Pneumovax 23
42 98 140 68 63 131 105 223 327 280 177 457 
Vaqta32 37 69 27 36 64 91 60 151 72 62 134 
Hospital Acute Care
Bridion265 159 424 233 190 423 841 572 1,413 665 579 1,244 
Prevymis70 87 157 49 64 114 186 244 430 136 174 310 
Dificid69 5 74 72 6 77 199 16 215 184 12 196 
Primaxin— 41 41 — 63 63 2 173 174 1 185 185 
Noxafil4 47 51 13 49 62 29 138 167 39 141 180 
Zerbaxa29 24 53 24 19 43 86 71 157 64 55 120 
Cardiovascular
Alliance revenue-Adempas/Verquvo (3)
96 (4)92 85 3 88 249 10 259 244 14 258 
Adempas— 65 65 — 57 57 — 189 189 — 181 181 
Virology
Lagevrio— 640 640 — 436 436 — 1,236 1,236 1,523 3,336 4,859 
Isentress/Isentress HD
58 61 119 68 93 161 165 212 377 196 270 466 
Neuroscience
Belsomra23 35 58 20 42 62 60 117 176 60 139 199 
Immunology
Simponi— 179 179 — 173 173 — 539 539 — 540 540 
Remicade— 45 45 — 49 49 — 144 144 — 163 163 
Diabetes
Januvia328 252 581 332 385 717 842 800 1,642 958 1,294 2,252 
Janumet43 211 255 90 327 417 182 755 937 258 1,089 1,347 
Other pharmaceutical (4)
197 353 549 194 410 603 540 1,147 1,690 511 1,225 1,736 
Total Pharmaceutical segment sales7,153 7,110 14,263 6,620 6,343 12,963 19,840 20,602 40,442 19,119 20,707 39,826 
Animal Health:
Livestock205 669 874 186 643 829 543 1,987 2,530 521 1,965 2,486 
Companion Animal257 269 526 289 253 542 875 942 1,817 904 929 1,834 
Total Animal Health segment sales462 938 1,400 475 896 1,371 1,418 2,929 4,347 1,425 2,894 4,320 
Total segment sales7,615 8,048 15,663 7,095 7,239 14,334 21,258 23,531 44,789 20,544 23,601 44,146 
Other (5)
100 199 299 227 398 625 135 561 696 383 925 1,307 
 $7,715 $8,247 $15,962 $7,322 $7,637 $14,959 $21,393 $24,092 $45,485 $20,927 $24,526 $45,453 
U.S. plus international may not equal total due to rounding.
(1)    Alliance revenue for Lynparza and Lenvima represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs (see Note 3).
(2)    Alliance revenue for Reblozyl represents royalties and, for the first nine months of 2022, also includes the receipt of a regulatory approval milestone payment (see Note 3).
(3)    Alliance revenue for Adempas/Verquvo 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 3).
(4)    Other pharmaceutical primarily reflects sales of other human health pharmaceutical products, including products within the franchises not listed separately.
(5)    Other is primarily comprised of miscellaneous corporate revenue, including revenue hedging activities which increased sales by $173 million and $533 million for the nine months ended September 30, 2023 and 2022, respectively, as well as revenue from third-party manufacturing arrangements (including sales to Organon). Other for the nine months ended September 30, 2023 and 2022 also includes $118 million and $156 million, respectively, related to upfront and milestone payments received by Merck for out-licensing arrangements.
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 $3.3 billion for the three months ended September 30, 2023 and 2022, respectively, and $9.4 billion and $9.1 billion for the nine months ended September 30, 2023 and 2022, respectively.
Consolidated sales by geographic area where derived are as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2023202220232022
United States$7,715 $7,322 $21,393 $20,927 
Europe, Middle East and Africa3,327 3,286 9,978 11,228 
China1,694 1,442 5,322 3,957 
Japan1,081 673 2,514 2,776 
Asia Pacific (other than China and Japan)781 854 2,475 2,792 
Latin America895 684 2,298 1,933 
Other469 698 1,505 1,840 
 $15,962 $14,959 $45,485 $45,453 
A reconciliation of segment profits to Income Before Taxes is as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2023202220232022
Segment profits:
Pharmaceutical segment$10,407 $9,590 $29,400 $28,263 
Animal Health segment421 515 1,453 1,672 
Total segment profits10,828 10,105 30,853 29,935 
Other profits190 377 374 831 
Unallocated:
Interest income73 40 295 62 
Interest expense(317)(244)(836)(727)
Amortization(562)(460)(1,582)(1,623)
Depreciation(401)(448)(1,175)(1,257)
Research and development(3,183)(4,277)(20,523)(9,374)
Restructuring costs(126)(94)(344)(288)
Charge for Zetia antitrust litigation settlements— — (573)— 
Other unallocated, net(882)(1,416)(2,554)(4,628)
 $5,620 $3,583 $3,935 $12,931 
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 arrangements.
Other unallocated, net, includes expenses from corporate and manufacturing cost centers, 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.