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Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Effect of Net Investment Hedges on OCI and the Consolidated Statement of Operations
The effects of the Company’s net investment hedges on OCI and the Condensed Consolidated Statement of Income are shown below:
Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income (1)
Amount of Pretax 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)2024202320242023
Net Investment Hedging Relationships
Foreign exchange contracts$(2)$1 $— $1 
Euro-denominated notes(62)52 — — 
(1)    No amounts were reclassified from AOCL into income related to the sale of a subsidiary.
Summary of Interest Rate Swaps Held
At March 31, 2024, the Company was a party to four pay-floating, receive-fixed interest rate swap contracts designated as fair value hedges of a portion of fixed-rate notes as detailed in the table below.
March 31, 2024
($ in millions)
Par Value of Debt
Number of Interest Rate Swaps Held
Total Swap Notional Amount
4.50% notes due 2033
$1,500 4 $1,000 
Amounts Recorded on Balance Sheet Related to Fair Value Hedges
The table below presents the location of amounts recorded in the Condensed Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges:
Carrying Amount of Hedged Liabilities
Cumulative Amount of Fair Value Hedging Adjustment Increase Included in the Carrying Amount
($ in millions)
March 31, 2024December 31, 2023March 31, 2024December 31, 2023
Balance Sheet Caption
Long-Term Debt
$1,026 $1,056 $26 $56 
Fair Value of Derivatives on a Gross Basis Segregated between those Derivatives that are Designated as Hedging Instruments and those that are Not Designated as Hedging Instruments
Presented in the table below is the fair value of derivatives on a gross basis segregated between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
  March 31, 2024December 31, 2023
  Fair Value of DerivativeU.S. Dollar
Notional		Fair Value of DerivativeU.S. Dollar
Notional
($ in millions)AssetLiabilityAssetLiability
Derivatives Designated as Hedging InstrumentsBalance Sheet Caption
Interest rate swap contracts
Other Assets
$27 $— $1,000 $57 $— $1,000 
Foreign exchange contractsOther current assets175 — 9,082 106 — 6,138 
Foreign exchange contractsOther Assets32 — 2,062 26 — 1,929 
Foreign exchange contractsAccrued and other current liabilities— 10 1,076 — 76 3,680 
Foreign exchange contractsOther Noncurrent Liabilities— 1 204 — 1 7 
  234 11 13,424 189 77 12,754 
Derivatives Not Designated as Hedging InstrumentsBalance Sheet Caption      
Foreign exchange contractsOther current assets121 — 9,428 153 — 9,693 
Foreign exchange contractsOther Assets2 — 43 — — — 
Foreign exchange contractsAccrued and other current liabilities— 154 9,282 — 162 8,104 
Foreign exchange contractsOther Noncurrent Liabilities— 2 43 — — — 
  123 156 18,796 153 162 17,797 
  $357 $167 $32,220 $342 $239 $30,551 
Information on Derivative Positions Subject to Master Netting Arrangements as if they were Presented on a Net Basis The following table provides information on the Company’s derivative positions subject to these master netting arrangements as if they were presented on a net basis, allowing for the right of offset by counterparty and cash collateral exchanged per the master agreements and related credit support annexes:
 March 31, 2024December 31, 2023
($ in millions)AssetLiabilityAssetLiability
Gross amounts recognized in the condensed consolidated balance sheet$357 $167 $342 $239 
Gross amounts subject to offset in master netting arrangements not offset in the condensed consolidated balance sheet(111)(111)(215)(215)
Cash collateral received
(58)— (3)— 
Net amounts$188 $56 $124 $24 
Location and Amount of Pretax Gains and Losses of Derivatives
The table below provides information regarding the location and amount of pretax gains and losses of derivatives designated in fair value or cash flow hedging relationships:
Three Months Ended March 31,
($ in millions)202420232024202320242023
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)
$15,775 $14,487 $(33)$89 $(113)$(115)
(Gain) loss on fair value hedging relationships:
Interest rate swap contracts
Hedged items— — (30)— — — 
Derivatives designated as hedging instruments— — 30 — — — 
Impact of cash flow hedging relationships:
Foreign exchange contracts
Amount of gain (loss) recognized in OCI on derivatives
— — — — 209 (66)
Increase in Sales as a result of AOCL reclassifications
44 101 — — (44)(101)
Interest rate contracts
Amount of gain recognized in Other (income) expense, net on derivatives
— — — (1)— — 
Amount of loss recognized in OCI on derivatives
— — — — — (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)20242023
Derivatives Not Designated as Hedging InstrumentsIncome Statement Caption
Foreign exchange contracts (1)
Other (income) expense, net$65 $13 
Foreign exchange contracts (2)
Sales(10)2 
(1)    These derivative contracts primarily mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates.
(2)    These derivative contracts serve as economic hedges of forecasted transactions.
Information on Investments in Debt and Equity Securities
Information on investments in debt and equity securities is as follows:
 March 31, 2024December 31, 2023
 Amortized
Cost		Gross UnrealizedFair
Value		Amortized
Cost		Gross UnrealizedFair
Value
($ in millions)GainsLossesGainsLosses
Commercial paper$40 $— $— $40 $252 $— $— $252 
U.S. government and agency securities77 — — 77 72 — — 72 
Corporate notes and bonds— — — — 13 — — 13 
Total debt securities$117 $— $— $117 $337 $— $— $337 
Publicly traded equity securities (1)
908 764 
Total debt and publicly traded equity securities$1,025 $1,101 
(1)    Unrealized net gains of $143 million were recorded in Other (income) expense, net in the first quarter of 2024 on equity securities still held at March 31, 2024. Unrealized net gains of $338 million were recorded in Other (income) expense, net in the first quarter of 2023 on equity securities still held at March 31, 2023.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
Fair Value Measurements UsingFair Value Measurements Using
 Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
($ in millions)March 31, 2024December 31, 2023
Assets
Investments
Commercial paper$— $40 $— $40 $— $252 $— $252 
Publicly traded equity securities280 — — 280 252 — — 252 
 280 40 — 320 252 252 — 504 
Other assets (1)
U.S. government and agency securities77 — — 77 72 — — 72 
Corporate notes and bonds— — — — 13 — — 13 
Publicly traded equity securities (2)
628 — — 628 512 — — 512 
705 — — 705 597 — — 597 
Derivative assets (3)
Forward exchange contracts— 204 — 204 — 202 — 202 
Purchased currency options— 126 — 126 — 83 — 83 
Interest rate swaps
— 27 — 27 — 57 — 57 
 — 357 — 357 — 342 — 342 
Total assets$985 $397 $— $1,382 $849 $594 $— $1,443 
Liabilities
Other liabilities
Contingent consideration$— $— $226 $226 $— $— $354 $354 
Derivative liabilities (3)
Forward exchange contracts— 149 — 149 — 239 — 239 
Written currency options— 18 — 18 — — — — 
— 167 — 167 — 239 — 239 
Total liabilities$— $167 $226 $393 $— $239 $354 $593 
(1)    Investments included in other assets are restricted as to use, including for the payment of benefits under employee benefit plans.
(2)    Balance at March 31, 2024 includes securities with a fair value of $266 million, which are subject to a contractual sale restriction that expires in July 2024.
(3)    The fair value determination of derivatives includes the impact of the credit risk of counterparties to the derivatives and the Company’s own credit risk, the effects of which were not significant.
Information About the Changes in Liabilities for Contingent Consideration
Summarized information about the changes in the fair value of liabilities for contingent consideration associated with business combinations is as follows:
($ in millions)20242023
Fair value January 1$354 $456 
Changes in estimated fair value (1)
(2)14 
Payments(126)(117)
Fair value March 31 (2)
$226 $353 
(1)    Recorded in Cost of sales, Research and development expenses, and Other (income) expense, net. Includes cumulative translation adjustments.
(2)    Balance at March 31, 2024, includes $133 million of current liabilities, all of which 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.