XML 33 R22.htm IDEA: XBRL DOCUMENT v3.24.2.u1
Segment Reporting
 6 Months Ended
Jun. 30, 2024
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:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
 ($ in millions)U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$4,412 $2,858 $7,270 $3,863 $2,408 $6,271 $8,531 $5,686 $14,217 $7,348 $4,718 $12,065 
Alliance revenue-Lynparza (1)
153 165 317 144 166 310 288 321 609 286 299 585 
Alliance revenue-Lenvima (1)
177 73 249 163 79 242 349 155 504 316 158 474 
Welireg116 10 126 49 2 50 194 17 211 90 3 92 
Alliance revenue-Reblozyl (2)
75 15 90 36 11 47 133 28 161 66 24 90 
Vaccines
Gardasil/Gardasil 9
536 1,941 2,478 464 1,994 2,458 1,024 3,702 4,727 880 3,550 4,430 
ProQuad/M-M-R II/Varivax
490 127 617 447 135 582 928 259 1,187 868 242 1,109 
Vaxneuvance99 90 189 147 20 168 260 148 408 241 33 274 
RotaTeq107 56 163 93 37 131 257 123 379 273 155 428 
Pneumovax 23
11 48 59 23 69 92 17 103 120 63 125 188 
Hospital Acute Care
Bridion351 104 455 299 203 502 680 215 895 576 413 989 
Prevymis90 98 188 61 82 143 165 197 362 116 157 273 
Dificid79 12 92 68 8 76 147 17 165 130 11 141 
Zerbaxa33 28 62 30 24 54 67 51 118 57 47 104 
Noxafil— 44 45 11 45 55 8 92 101 25 91 116 
Cardiovascular
Alliance revenue-Adempas/Verquvo (3)
98 8 106 70 (2)68 188 16 203 153 14 167 
Adempas— 72 72 — 65 65 — 142 142 — 125 125 
Winrevair
70 — 70 — — — 70 — 70 — — — 
Virology
Lagevrio15 95 110 2 201 203 60 400 460 — 595 595 
Isentress/Isentress HD
43 46 89 56 80 136 93 107 200 108 151 259 
Delstrigo
14 45 60 13 37 50 26 89 116 24 70 94 
Pifeltro
27 12 39 27 11 38 56 25 81 51 21 72 
Neuroscience
Belsomra19 34 53 21 42 63 33 66 99 37 82 119 
Immunology
Simponi— 172 172 — 180 180 — 356 356 — 359 359 
Remicade— 35 35 — 48 48 — 74 74 — 99 99 
Diabetes
Januvia177 227 405 243 267 511 361 463 824 514 548 1,062 
Janumet17 208 224 82 272 354 55 420 475 138 544 683 
Other pharmaceutical (4)
190 386 573 158 403 560 346 807 1,151 328 857 1,187 
Total Pharmaceutical segment sales7,399 7,009 14,408 6,570 6,887 13,457 14,336 14,079 28,415 12,688 13,491 26,179 
Animal Health:
Livestock168 669 837 165 643 807 334 1,352 1,686 338 1,318 1,656 
Companion Animal287 358 645 310 339 649 595 712 1,307 618 673 1,291 
Total Animal Health segment sales455 1,027 1,482 475 982 1,456 929 2,064 2,993 956 1,991 2,947 
Total segment sales7,854 8,036 15,890 7,045 7,869 14,913 15,265 16,143 31,408 13,644 15,482 29,126 
Other (5)
22 200 222 (27)149 122 89 390 479 32 364 396 
 $7,876 $8,236 $16,112 $7,018 $8,018 $15,035 $15,354 $16,533 $31,887 $13,676 $15,846 $29,522 
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 (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 $118 million and $128 million for the six months ended June 30, 2024 and 2023, respectively, as well as revenue from third-party manufacturing arrangements (including sales to Organon). Other for the six months ended June 30, 2024 and 2023 also includes $76 million and $54 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 $3.3 billion and $3.2 billion for the three months ended June 30, 2024 and 2023, respectively, and $6.6 billion and $6.3 billion for the six months ended June 30, 2024 and June 30, 2023, respectively.
Consolidated sales by geographic area where derived are as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
($ in millions)2024202320242023
United States$7,876 $7,018 $15,354 $13,676 
Europe, Middle East and Africa3,515 3,348 7,078 6,651 
China1,817 1,913 3,589 3,628 
Latin America858 742 1,655 1,403 
Japan686 675 1,507 1,434 
Asia Pacific (other than China and Japan)748 848 1,472 1,694 
Other612 491 1,232 1,036 
 $16,112 $15,035 $31,887 $29,522 
A reconciliation of segment profits to Income (Loss) Before Taxes is as follows:
 Three Months Ended
June 30,		Six Months Ended
June 30,
($ in millions)2024202320242023
Segment profits:
Pharmaceutical segment$11,200 $9,854 $22,104 $18,993 
Animal Health segment508 467 1,064 1,032 
Total segment profits11,708 10,321 23,168 20,025 
Other profits129 19 274 184 
Unallocated:
Interest income69 109 141 221 
Interest expense(310)(277)(613)(519)
Amortization(614)(477)(1,087)(1,020)
Depreciation(450)(376)(902)(775)
Research and development(3,360)(13,194)(7,209)(17,341)
Restructuring costs(80)(151)(202)(218)
Charge for Zetia antitrust litigation settlements— — — (573)
Other unallocated, net(1,086)(1,309)(1,895)(1,669)
 $6,006 $(5,335)$11,675 $(1,685)
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 by 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 (losses) 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.