v3.26.1
Segment Reporting
 6 Months Ended
Jun. 30, 2026
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. As a result of changes to the Company’s internal reporting structure, certain costs (including IT related costs) that were previously included in the Pharmaceutical segment are now being included as part of non-segment unallocated expenses within corporate support functions. Prior period Pharmaceutical segment profits have been recast to reflect these changes on a comparable basis.
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,
2026202520262025
 ($ in millions)U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$4,611 $3,293 $7,904 $4,749 $3,207 $7,956 $9,210 $6,600 $15,810 $9,057 $6,104 $15,161 
Keytruda Qlex395 68 463 — — — 501 89 590 — — — 
Alliance revenue-Lynparza (1)
167 198 365 174 195 370 315 391 706 319 363 682 
Alliance revenue-Lenvima (1)
194 90 283 183 83 265 369 170 539 368 155 523 
Welireg214 57 271 138 24 162 366 103 470 261 39 300 
Alliance revenue-Reblozyl (2)
98 25 122 88 19 107 226 45 270 189 37 226 
Vaccines
Gardasil/Gardasil 9
542 626 1,169 545 581 1,126 1,027 1,211 2,238 1,082 1,371 2,453 
ProQuad/M-M-R II/Varivax
438 154 592 481 128 609 847 283 1,130 903 245 1,148 
Vaxneuvance69 80 148 136 93 229 192 158 350 275 184 459 
RotaTeq84 50 134 60 61 121 249 91 340 225 125 349 
Capvaxive138 45 184 129 — 129 256 69 325 235 1 236 
Cardiometabolic and Respiratory
Winrevair522 66 588 323 12 336 999 114 1,114 591 24 615 
Ohtuvayre204 — 204 — — — 335 — 335 — — — 
Alliance revenue-Adempas/Verquvo (3)
112 14 126 108 15 123 221 14 235 205 23 229 
Adempas— 78 78 — 80 80 — 156 156 — 147 147 
Infectious Diseases
Bridion460 37 497 411 50 461 887 82 969 789 113 902 
Prevymis147 148 295 115 113 228 282 285 568 217 219 436 
Delstrigo13 88 101 14 70 83 23 153 176 29 121 150 
Zerbaxa44 34 77 45 29 74 95 64 159 87 57 145 
Isentress/Isentress HD
36 24 60 48 38 86 71 49 119 99 77 176 
Dificid11 12 22 83 13 96 35 21 56 155 24 179 
Lagevrio1 3 5 30 52 83 18 15 32 66 119 185 
Diabetes
Januvia149 109 258 216 155 372 401 224 625 561 360 921 
Janumet28 143 171 68 184 251 96 283 378 133 366 498 
Other pharmaceutical (4)
150 491 643 184 520 703 317 1,101 1,419 408 1,160 1,568 
Total Pharmaceutical segment sales8,827 5,933 14,760 8,328 5,722 14,050 17,338 11,771 29,109 16,254 11,434 27,688 
Animal Health:
Livestock202 838 1,041 190 771 961 414 1,691 2,105 384 1,501 1,885 
Companion Animal333 402 734 309 376 685 640 821 1,461 617 732 1,349 
Total Animal Health segment sales535 1,240 1,775 499 1,147 1,646 1,054 2,512 3,566 1,001 2,233 3,234 
Total segment sales9,362 7,173 16,535 8,827 6,869 15,696 18,392 14,283 32,675 17,255 13,667 30,922 
Other (5)
5 67 72 9 100 110 140 78 218 104 310 413 
$9,367 $7,240 $16,607 $8,836 $6,969 $15,806 $18,532 $14,361 $32,893 $17,359 $13,977 $31,335 
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. Also reflects total alliance revenue for Koselugo of $10 million and $43 million in the second quarter of 2026 and 2025, respectively, and $171 million and $87 million in the first six months of 2026 and 2025, respectively (see Note 3).
(5)    Other is primarily comprised of miscellaneous corporate revenue, including revenue hedging activities which (decreased) increased sales by $(153) million and $16 million for the six months ended June 30, 2026 and 2025, respectively, as well as revenue from third-party manufacturing arrangements (including sales to Organon & Co.). Other for the six months ended June 30, 2026 and 2025 also includes $132 million and $100 million, respectively, related to 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 $2.5 billion for both the three months ended June 30, 2026 and 2025, and $5.0 billion and $4.7 billion for the six months ended June 30, 2026 and 2025, respectively.
Consolidated sales by geographic area where derived are as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
($ in millions)2026202520262025
U.S.$9,367 $8,836 $18,532 $17,359 
Europe, Middle East and Africa3,920 3,659 7,806 7,109 
Latin America875 859 1,749 1,651 
Asia Pacific (other than China and Japan)820 785 1,557 1,474 
Japan577 626 1,132 1,295 
China408 446 797 1,148 
Other640 595 1,320 1,299 
$16,607 $15,806 $32,893 $31,335 
A reconciliation of segment profits to (Loss) Income Before Taxes is as follows:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
($ in millions)
Pharma-
ceutical
Animal
Health
Total
Pharma-
ceutical
Animal
 Health
TotalPharma-ceutical
Animal
Health
TotalPharma-ceutical
Animal
Health
Total
Segment sales$14,760 $1,775 $16,535 $14,050 $1,646 $15,696 $29,109 $3,566 $32,675 $27,688 $3,234 $30,922 
Less segment costs: (1)
Cost of sales1,731 715 1,601 659 3,284 1,389 3,174 1,258 
Selling, general and administrative1,437 304 1,367 284 2,750 585 2,611 544 
Research and development (2)
— 120 — 110 — 232 — 205 
Other segment items (3)
(20)— (21)— (76)1 (70)1 
Total segment profits$11,612 $636 $12,248 $11,103 $593 $11,696 $23,151 $1,359 $24,510 $21,973 $1,226 $23,199 
Other profits30 30 136 231 
Unallocated:
Interest income35 69 70 178 
Interest expense(525)(305)(1,004)(618)
Amortization(984)(601)(1,915)(1,198)
Depreciation(513)(455)(1,004)(896)
Research and development(9,577)(3,844)(21,981)(7,321)
Restructuring costs(151)(560)(346)(629)
Other unallocated, net(1,246)(1,031)(2,683)(2,044)
$(683)$4,999 $(4,217)$10,902 
(1)    The significant expense categories and amounts align with the segment level information that is regularly provided to the chief operating decision maker.
(2)    Human health-related research and development expenses incurred by Merck Research Laboratories are not allocated to segment profits as noted below.
(3)    Includes equity (income) loss from affiliates and other miscellaneous non-operating expenses.
Pharmaceutical segment profits consist of segment sales less standard costs, as well as selling, general and administrative expenses directly incurred by the segment. Animal Health segment profits consist 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. The chief operating decision maker (Merck’s Chief Executive Officer) uses segment profit for the purpose of evaluating performance, allocating resources, informing incentive compensation targets and setting strategic Company goals during the planning and forecasting process. On a quarterly basis, the CEO considers forecast-to-actual variances in segment profit when assessing performance of the segments and making decisions about allocating resources to the segments. For internal management reporting presented to the CEO, 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 the recognition of fair value step-up of inventories 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.
Equity income from affiliates and depreciation included in segment profits is as follows:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
($ in millions)
Pharma-
ceutical
Animal
Health
Total
Pharma-
ceutical
Animal
 Health
TotalPharma-ceutical
Animal
Health
TotalPharma-ceutical
Animal
Health
Total
Equity income from affiliates
$29 $— $29 $29 $— $29 $92 $— $92 $86 $— $86 
Depreciation
1 84 85 1 62 63 2 174 176 2 122 124 
Property, plant and equipment, net, by geographic area where located is as follows:
($ in millions)
June 30, 2026December 31, 2025
U.S.$15,291 $15,021 
Europe, Middle East and Africa9,076 8,856 
Asia Pacific (other than China and Japan)
850 898 
China210 218 
Latin America131 128 
Japan129 144 
Other50 51 
$25,737 $25,316 
The Company does not disaggregate assets on a products and services basis for internal management reporting and, therefore, such information is not presented.