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Restructuring | 6 Months Ended
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Jun. 30, 2025
Restructuring and Related Activities [Abstract] |
Restructuring | Restructuring In July 2025, the Company approved a new restructuring program (2025 Restructuring Program) designed to position the Company for its next chapter of growth and to successfully advance its pipeline and launch new products across multiple therapeutic areas. As part of this program, the Company expects to eliminate certain positions in sales and administrative organizations, as well as research and development. The Company will, however, continue to hire employees into new roles across all strategic growth areas of the business. In addition, the Company will reduce its global real estate footprint and continue to optimize its manufacturing network, aligning the geography of its global manufacturing footprint to its customers and reflecting changes in the Company’s business. Most actions contemplated under the 2025 Restructuring Program are expected to be largely completed by the end of 2027, with the exception of certain manufacturing actions, which are expected to be substantially completed by the end of 2029. The cumulative pretax costs to be incurred by the Company to implement the program are estimated to be approximately $3.0 billion, of which approximately 60% will be cash, relating primarily to employee separation expense and contractual termination costs. The remainder of the costs will be non-cash, relating primarily to the accelerated depreciation of facilities. The Company recorded total pretax costs of $649 million in the second quarter of 2025 related to the 2025 Restructuring Program. In January 2024, the Company approved a restructuring program (2024 Restructuring Program) intended to continue the optimization of the Company’s Human Health global manufacturing network as the future pipeline shifts to new modalities and also optimize the Animal Health global manufacturing network to improve supply reliability and increase efficiency. The actions contemplated under the 2024 Restructuring Program are expected to be substantially completed by the end of 2031, with the cumulative pretax costs to be incurred by the Company to implement the program estimated to be approximately $4.0 billion. Approximately 60% of the cumulative pretax costs will be non-cash, relating primarily to the accelerated depreciation of facilities to be closed or divested. The remainder of the costs will result in cash outlays, relating primarily to facility shut-down costs. The Company recorded total pretax costs of $130 million and $177 million in the second quarter of 2025 and 2024, respectively, and $235 million and $422 million in the first six months of 2025 and 2024, respectively, related to the 2024 Restructuring Program. Since inception of the 2024 Restructuring Program through June 30, 2025, Merck has incurred total cumulative pretax costs of $1.3 billion. For segment reporting, restructuring charges are unallocated expenses. The following tables summarize the charges related to restructuring program activities by type of cost:
| Three Months Ended June 30, 2025 |  | Six Months Ended June 30, 2025
($ in millions) | Accelerated Depreciation |  | Separation Costs |  | Other Exit Costs |  | Total |  | Accelerated Depreciation |  | Separation Costs |  | Other Exit Costs |  | Total
2025 Restructuring Program |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales | $ | — |  |  | $ | — |  |  | $ | 100 |  |  | $ | 100 |  |  | $ | — |  |  | $ | — |  |  | $ | 100 |  |  | $ | 100 |
Research and development | — |  |  | — |  |  | 53 |  |  | 53 |  |  | — |  |  | — |  |  | 53 |  |  | 53 |
Restructuring costs | — |  |  | 481 |  |  | 15 |  |  | 496 |  |  | — |  |  | 481 |  |  | 15 |  |  | 496 |
| — |  |  | 481 |  |  | 168 |  |  | 649 |  |  | — |  |  | 481 |  |  | 168 |  |  | 649 |
2024 Restructuring Program |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales | 55 |  |  | — |  |  | 10 |  |  | 65 |  |  | 96 |  |  | — |  |  | 5 |  |  | 101 |
Selling, general and administrative | — |  |  | — |  |  | 1 |  |  | 1 |  |  | — |  |  | — |  |  | 1 |  |  | 1 |
Restructuring costs | — |  |  | 6 |  |  | 58 |  |  | 64 |  |  | — |  |  | 7 |  |  | 126 |  |  | 133 |
| 55 |  |  | 6 |  |  | 69 |  |  | 130 |  |  | 96 |  |  | 7 |  |  | 132 |  |  | 235 |
| $ | 55 |  |  | $ | 487 |  |  | $ | 237 |  |  | $ | 779 |  |  | $ | 96 |  |  | $ | 488 |  |  | $ | 300 |  |  | $ | 884 |
| Three Months Ended June 30, 2024 |  | Six Months Ended June 30, 2024
($ in millions) | Accelerated Depreciation |  | Separation Costs |  | Other Exit Costs |  | Total |  | Accelerated Depreciation |  | Separation Costs |  | Other Exit Costs |  | Total
2024 Restructuring Program |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of sales | $ | 66 |  |  | $ | — |  |  | $ | — |  |  | $ | 66 |  |  | $ | 131 |  |  | $ | — |  |  | $ | 51 |  |  | $ | 182 |
Selling, general and administrative | — |  |  | — |  |  | 31 |  |  | 31 |  |  | — |  |  | — |  |  | 36 |  |  | 36 |
Research and development | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2 |  |  | 2 |
Restructuring costs | — |  |  | 19 |  |  | 61 |  |  | 80 |  |  | — |  |  | 111 |  |  | 91 |  |  | 202 |
| $ | 66 |  |  | $ | 19 |  |  | $ | 92 |  |  | $ | 177 |  |  | $ | 131 |  |  | $ | 111 |  |  | $ | 180 |  |  | $ | 422 |
Accelerated depreciation costs primarily relate to manufacturing, research and administrative facilities to be fully or partially closed or divested and equipment to be disposed of as part of the programs. Accelerated depreciation costs represent the difference between the depreciation expense to be recognized over the revised useful life of the asset, based upon the anticipated date the site will be closed or divested or the equipment disposed of, and depreciation expense as determined utilizing the useful life prior to the restructuring actions. All the sites will continue to operate up through the respective closure dates and, since future undiscounted cash flows are sufficient to recover the respective book values, Merck is recording accelerated depreciation over the revised useful life of the site assets. Anticipated site closure dates, particularly related to manufacturing locations, have been and may continue to be adjusted to reflect changes resulting from regulatory or other factors. Separation costs are associated with actual headcount reductions, as well as involuntary headcount reductions which were probable and could be reasonably estimated. Other exit costs in 2025 and 2024 include asset impairment, facility shut-down, contractual termination, and other related costs, as well as pretax gains and losses resulting from the sales of facilities and related assets. Additionally, other activity includes certain employee-related costs associated with pension and other postretirement benefit plans (see Note 9) and share-based compensation. The following table summarizes the charges and spending related to restructuring program activities for the six months ended June 30, 2025:
($ in millions) | Accelerated Depreciation |  | Separation Costs |  | Other Exit Costs |  | Total
2025 Restructuring Program |  |  |  |  |  |  |
Restructuring reserves January 1, 2025 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Expenses | — |  |  | 481 |  |  | 168 |  |  | 649 |
Non-cash activity | — |  |  | — |  |  | (53) |  |  | (53) |
Restructuring reserves June 30, 2025 | $ | — |  |  | $ | 481 |  |  | $ | 115 |  |  | $ | 596 |
2024 Restructuring Program |  |  |  |  |  |  |
Restructuring reserves January 1, 2025 | $ | — |  |  | $ | 564 |  |  | $ | — |  |  | $ | 564 |
Expenses | 96 |  |  | 7 |  |  | 132 |  |  | 235 |
(Payments) receipts, net | — |  |  | (23) |  |  | (126) |  |  | (149) |
Non-cash activity | (96) |  |  | — |  |  | (6) |  |  | (102) |
Restructuring reserves June 30, 2025 | $ | — |  |  | $ | 548 |  |  | $ | — |  |  | $ | 548 |

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4.e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479823/420-10-S99-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/420/tableOfContent Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482017/420-10-50-1 + Details
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