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Segment Reporting
 9 Months Ended
Sep. 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 September 30,Nine Months Ended September 30,
2024202320242023
 ($ in millions)U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$4,500 $2,929 $7,429 $3,795 $2,543 $6,338 $13,031 $8,614 $21,646 $11,142 $7,261 $18,403 
Alliance revenue-Lynparza (1)
161 177 337 153 146 299 449 498 947 439 445 884 
Alliance revenue-Lenvima (1)
173 78 251 160 100 260 523 233 755 476 258 734 
Welireg127 12 139 51 3 54 320 29 349 141 6 146 
Alliance revenue-Reblozyl (2)
82 18 100 43 10 52 215 45 261 108 33 142 
Vaccines
Gardasil/Gardasil 9
1,020 1,285 2,306 838 1,746 2,585 2,045 4,988 7,032 1,718 5,297 7,015 
ProQuad/M-M-R II/Varivax
572 131 703 567 146 713 1,500 391 1,891 1,435 388 1,823 
Vaxneuvance137 103 239 182 33 214 397 251 647 423 65 488 
RotaTeq131 62 193 108 48 156 388 185 572 381 203 584 
Pneumovax 23
19 49 68 42 98 140 36 152 188 105 223 327 
Hospital Acute Care
Bridion339 81 420 265 159 424 1,020 296 1,315 841 572 1,413 
Prevymis101 107 208 70 87 157 265 305 570 186 244 430 
Dificid83 13 96 69 5 74 231 30 261 199 16 215 
Zerbaxa39 26 64 29 24 53 106 77 182 86 71 157 
Noxafil1 40 41 4 47 51 9 132 141 29 138 167 
Cardiovascular
Alliance revenue-Adempas/Verquvo (3)
96 7 102 96 (4)92 283 22 306 249 10 259 
Adempas— 72 72 — 65 65 — 214 214 — 189 189 
Winrevair
147 3 149 — — — 216 3 219 — — — 
Virology
Lagevrio84 299 383 — 640 640 144 699 843 — 1,236 1,236 
Isentress/Isentress HD
54 48 102 58 61 119 147 155 302 165 212 377 
Delstrigo
15 50 65 13 40 54 42 139 180 37 110 148 
Pifeltro
31 12 42 27 10 37 86 37 123 78 31 109 
Neuroscience
Belsomra20 58 78 23 35 58 53 124 177 60 117 176 
Immunology
Simponi— 189 189 — 179 179 — 545 545 — 539 539 
Remicade— 41 41 — 45 45 — 115 115 — 144 144 
Diabetes
Januvia67 211 278 328 252 581 428 674 1,102 842 800 1,642 
Janumet15 190 204 43 211 255 70 610 679 182 755 937 
Other pharmaceutical (4)
213 426 644 189 381 568 559 1,232 1,796 518 1,239 1,758 
Total Pharmaceutical segment sales8,227 6,717 14,943 7,153 7,110 14,263 22,563 20,795 43,358 19,840 20,602 40,442 
Animal Health:
Livestock194 692 886 205 669 874 529 2,044 2,573 543 1,987 2,530 
Companion Animal293 307 601 257 269 526 888 1,019 1,907 875 942 1,817 
Total Animal Health segment sales487 999 1,487 462 938 1,400 1,417 3,063 4,480 1,418 2,929 4,347 
Total segment sales8,714 7,716 16,430 7,615 8,048 15,663 23,980 23,858 47,838 21,258 23,531 44,789 
Other (5)
22 206 227 100 199 299 109 597 706 135 561 696 
 $8,736 $7,922 $16,657 $7,715 $8,247 $15,962 $24,089 $24,455 $48,544 $21,393 $24,092 $45,485 
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 $156 million and $173 million for the nine months ended September 30, 2024 and 2023, respectively, as well as revenue from third-party manufacturing arrangements (including sales to Organon as discussed in Note 2). Other for the nine months ended September 30, 2024 and 2023 also includes $91 million and $118 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 $3.6 billion and $3.1 billion for the three months ended September 30, 2024 and 2023, respectively, and $10.1 billion and $9.4 billion for the nine months ended September 30, 2024 and September 30, 2023, respectively.
Consolidated sales by geographic area where derived are as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2024202320242023
United States$8,736 $7,715 $24,089 $21,393 
Europe, Middle East and Africa3,583 3,327 10,661 9,978 
China1,017 1,694 4,606 5,322 
Latin America936 895 2,591 2,298 
Japan938 1,081 2,445 2,514 
Asia Pacific (other than China and Japan)823 781 2,294 2,475 
Other624 469 1,858 1,505 
 $16,657 $15,962 $48,544 $45,485 
A reconciliation of segment profits to Income Before Taxes is as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2024202320242023
Segment profits:
Pharmaceutical segment$11,547 $10,407 $33,651 $29,400 
Animal Health segment510 421 1,574 1,453 
Total segment profits12,057 10,828 35,225 30,853 
Other profits117 190 391 374 
Unallocated:
Interest income127 73 269 295 
Interest expense(330)(317)(943)(836)
Amortization(633)(562)(1,720)(1,582)
Depreciation(467)(401)(1,368)(1,175)
Research and development(5,716)(3,183)(12,926)(20,523)
Restructuring costs(56)(126)(258)(344)
Charge for Zetia antitrust litigation settlements— — — (573)
Other unallocated, net(1,009)(882)(2,904)(2,554)
 $4,090 $5,620 $15,766 $3,935 
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.