Restructuring

9 Months Ended

Sep. 30, 2025

Restructuring and Related Activities [Abstract]

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 $302 million and $951 million in the third quarter and first nine months of 2025, respectively, 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 $88 million and $279 million in the third quarter of 2025 and 2024, respectively, and $323 million and $701 million in the first nine months of 2025 and 2024, respectively, related to the 2024 Restructuring Program. Since inception of the 2024 Restructuring Program through September 30, 2025, Merck has incurred total cumulative pretax costs of $1.4 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 September 30, 2025								Nine Months Ended September 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	$	—	$	—	$	72	$	72	$	—	$	—	$	172	$	172

Research and development	—		—		233		233		—		—		286		286
Restructuring costs	—		—		(3)		(3)		—		481		12		493
	—		—		302		302		—		481		470		951
2024 Restructuring Program
Cost of sales	56		—		(18)		38		152		—		(13)		139
Selling, general and administrative	—		—		—		—		—		—		1		1

Restructuring costs	—		6		44		50		—		13		170		183
	56		6		26		88		152		13		158		323
	$	56	$	6	$	328	$	390	$	152	$	494	$	628	$	1,274


	Three Months Ended September 30, 2024								Nine Months Ended September 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	$	40	$	—	$	152	$	192	$	171	$	—	$	203	$	374
Selling, general and administrative	—		—		31		31		—		—		67		67
Research and development	—		—		—		—		—		—		2		2
Restructuring costs	—		11		45		56		—		122		136		258
	$	40	$	11	$	228	$	279	$	171	$	122	$	408	$	701

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 10) and share-based compensation.

The following table summarizes the charges and spending related to restructuring program activities for the nine months ended September 30, 2025:


($ in millions)	Accelerated Depreciation		Separation Costs		Other Exit Costs		Total
2025 Restructuring Program
Restructuring reserves January 1, 2025	$	—	$	—	$	—	$	—
Expenses	—		481		470		951
(Payments) receipts, net	—		(7)		(2)		(9)
Non-cash activity	—		—		(81)		(81)
Restructuring reserves September 30, 2025	$	—	$	474	$	387	$	861
2024 Restructuring Program
Restructuring reserves January 1, 2025	$	—	$	564	$	—	$	564
Expenses	152		13		158		323
(Payments) receipts, net	—		(78)		(161)		(239)
Non-cash activity	(152)		—		3		(149)
Restructuring reserves September 30, 2025	$	—	$	499	$	—	$	499