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Segment Reporting
 12 Months Ended
Dec. 31, 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, 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:
Years Ended December 31202320222021
U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$15,114 $9,897 $25,011 $12,686 $8,251 $20,937 $9,765 $7,421 $17,186 
Alliance revenue - Lynparza (1)
607 592 1,199 584 532 1,116 515 473 989 
Alliance revenue - Lenvima (1)
657 303 960 579 297 876 417 287 704 
Welireg209 10 218 123 — 123 13 — 13 
Alliance revenue - Reblozyl (2)
168 43 212 123 43 166 — 17 17 
Vaccines
Gardasil/Gardasil 9
2,083 6,803 8,886 2,065 4,832 6,897 1,881 3,792 5,673 
ProQuad/M-M-R II/Varivax1,837 531 2,368 1,724 518 2,241 1,629 506 2,135 
RotaTeq493 276 769 508 275 783 473 334 807 
Vaxneuvance561 103 665 163 7 170 3 — 3 
Pneumovax 23
127 285 412 346 256 602 547 346 893 
Vaqta119 61 180 95 78 173 100 79 179 
Hospital Acute Care
Bridion1,156 686 1,842 922 762 1,685 762 770 1,532 
Prevymis264 341 605 188 240 428 153 218 370 
Dificid274 28 302 241 22 263 166 10 175 
Zerbaxa119 100 218 89 79 169 4 (5)(1)
Noxafil32 181 213 51 187 238 60 199 259 
Primaxin1 211 213 1 238 239 2 258 259 
Cardiovascular
Alliance revenue - Adempas/Verquvo (3)
350 16 367 329 12 341 312 30 342 
Adempas— 255 255 — 238 238 — 252 252 
Virology
Lagevrio10 1,418 1,428 1,523 4,161 5,684 632 320 952 
Isentress/Isentress HD215 268 483 274 359 633 294 474 769 
Neuroscience
Belsomra81 150 231 79 179 258 78 241 318 
Immunology
Simponi— 710 710 — 706 706 — 825 825 
Remicade— 187 187 — 207 207 — 299 299 
Diabetes
Januvia1,151 1,039 2,189 1,248 1,565 2,813 1,404 1,920 3,324 
Janumet223 954 1,177 355 1,344 1,700 367 1,597 1,964 
Other pharmaceutical (4)
688 1,596 2,283 693 1,628 2,319 824 1,690 2,516 
Total Pharmaceutical segment sales26,539 27,044 53,583 24,989 27,016 52,005 20,401 22,353 42,754 
Animal Health:
Livestock700 2,637 3,337 710 2,590 3,300 667 2,628 3,295 
Companion Animal1,104 1,184 2,288 1,112 1,138 2,250 1,091 1,182 2,273 
Total Animal Health segment sales1,804 3,821 5,625 1,822 3,728 5,550 1,758 3,810 5,568 
Total segment sales28,343 30,865 59,208 26,811 30,744 57,555 22,159 26,163 48,322 
Other (5)
137 770 907 395 1,333 1,728 266 116 382 
 $28,480 $31,635 $60,115 $27,206 $32,077 $59,283 $22,425 $26,279 $48,704 
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 4).
(2)    Alliance revenue for Reblozyl represents royalties and, for 2022, also includes a payment received related to the achievement of a regulatory approval milestone (see Note 4).
(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 4).
(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 (decreased) sales by $244 million, $810 million and $(203) million in 2023, 2022 and 2021, respectively, as well as revenue from third-party manufacturing arrangements (including sales to Organon). Other for 2023, 2022 and 2021 also includes $118 million, $165 million and $218 million, respectively, related to upfront and milestone payments received by Merck for out-licensing arrangements.
Consolidated sales by geographic area where derived are as follows:
Years Ended December 31202320222021
United States$28,480 $27,206 $22,425 
Europe, Middle East and Africa13,254 14,493 13,341 
China6,802 5,191 4,378 
Japan3,164 3,629 2,726 
Asia Pacific (other than China and Japan)3,225 3,614 2,407 
Latin America3,086 2,582 2,206 
Other2,104 2,568 1,221 
 $60,115 $59,283 $48,704 
A reconciliation of segment profits to Income from Continuing Operations Before Taxes is as follows:
Years Ended December 31202320222021
Segment profits:
Pharmaceutical segment$38,880 $36,852 $30,977 
Animal Health segment1,737 1,963 1,950 
Total segment profits40,617 38,815 32,927 
Other profits474 1,160 156 
Unallocated:
Interest income365 157 36 
Interest expense(1,146)(962)(806)
Amortization(2,044)(2,085)(1,636)
Depreciation(1,625)(1,642)(1,414)
Research and development(30,008)(13,011)(11,692)
Restructuring costs(599)(337)(661)
Charge for Zetia antitrust litigation settlements
(573)— — 
Other unallocated, net(3,572)(5,651)(3,031)
$1,889 $16,444 $13,879 
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 not directly incurred by the segments, 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 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 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.
Equity income from affiliates and depreciation included in segment profits is as follows:
PharmaceuticalAnimal HealthTotal
Year Ended December 31, 2023    
Included in segment profits:
Equity income from affiliates$111 $— $111 
Depreciation5 198 203 
Year Ended December 31, 2022    
Included in segment profits:
Equity income from affiliates$39 $— $39 
Depreciation5 177 182 
Year Ended December 31, 2021    
Included in segment profits:
Equity income from affiliates
$11 $— $11 
Depreciation6 158 164 
Property, plant and equipment, net, by geographic area where located is as follows:
December 31202320222021
United States$13,915 $12,891 $11,759 
Europe, Middle East and Africa7,562 6,993 6,081 
Asia Pacific (other than China and Japan)1,022 966 857 
Latin America222 225 199 
China193 207 220 
Japan133 135 159 
Other4 5 4 
 $23,051 $21,422 $19,279 
The Company does not disaggregate assets on a products and services basis for internal management reporting and, therefore, such information is not presented.