Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-6571 | |
Entity Registrant Name | Merck & Co., Inc. | |
Entity Incorporation, State or Country Code | NJ | |
Entity Tax Identification Number | 22-1918501 | |
Entity Address, Address Line One | 126 East Lincoln Avenue | |
Entity Address, City or Town | Rahway | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07065 | |
City Area Code | (908) | |
Local Phone Number | 740-4000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,535,395,974 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000310158 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock ($0.50 par value) | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock ($0.50 par value) | |
Trading Symbol | MRK | |
Security Exchange Name | NYSE | |
0.500% Notes due 2024 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 0.500% Notes due 2024 | |
Trading Symbol | MRK 24 | |
Security Exchange Name | NYSE | |
1.875% Notes due 2026 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 1.875% Notes due 2026 | |
Trading Symbol | MRK/26 | |
Security Exchange Name | NYSE | |
2.500% Notes due 2034 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.500% Notes due 2034 | |
Trading Symbol | MRK/34 | |
Security Exchange Name | NYSE | |
1.375% Notes due 2036 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 1.375% Notes due 2036 | |
Trading Symbol | MRK 36A | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Sales | $ 14,959 | $ 13,154 | $ 45,453 | $ 35,183 |
Costs, Expenses and Other | ||||
Cost of sales | 3,934 | 3,450 | 13,530 | 9,752 |
Selling, general and administrative | 2,520 | 2,336 | 7,355 | 6,804 |
Research and development | 4,399 | 2,445 | 9,773 | 9,177 |
Restructuring costs | 94 | 107 | 288 | 487 |
Other (income) expense, net | 429 | (450) | 1,576 | (1,007) |
Total Costs, Expenses and Other | 11,376 | 7,888 | 32,522 | 25,213 |
Income from Continuing Operations Before Taxes | 3,583 | 5,266 | 12,931 | 9,970 |
Taxes on Income from Continuing Operations | 330 | 695 | 1,423 | 1,436 |
Net Income from Continuing Operations | 3,253 | 4,571 | 11,508 | 8,534 |
Less: Net Income Attributable to Noncontrolling Interests | 5 | 4 | 6 | 9 |
Net Income from Continuing Operations Attributable to Merck & Co., Inc. | 3,248 | 4,567 | 11,502 | 8,525 |
Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests | 0 | 0 | 0 | 766 |
Net Income Attributable to Merck & Co., Inc. | $ 3,248 | $ 4,567 | $ 11,502 | $ 9,291 |
Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders: | ||||
Income from Continuing Operations (in dollars per share) | $ 1.28 | $ 1.81 | $ 4.55 | $ 3.37 |
Income from Discontinued Operations (in dollars per share) | 0 | 0 | 0 | 0.30 |
Net Income (in dollars per share) | 1.28 | 1.81 | 4.55 | 3.67 |
Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders: | ||||
Income from Continuing Operations (in dollars per share) | 1.28 | 1.80 | 4.53 | 3.36 |
Income from Discontinued Operations (in dollars per share) | 0 | 0 | 0 | 0.30 |
Net Income (in dollars per share) | $ 1.28 | $ 1.80 | $ 4.53 | $ 3.66 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income Attributable to Merck & Co., Inc. | $ 3,248 | $ 4,567 | $ 11,502 | $ 9,291 |
Other Comprehensive (Loss) Income Net of Taxes: | ||||
Net unrealized gain on derivatives, net of reclassifications | 338 | 84 | 584 | 324 |
Benefit plan net (loss) gain and prior service (cost) credit, net of amortization | (186) | 38 | 92 | 1,522 |
Cumulative translation adjustment | (568) | (84) | (990) | (251) |
Other comprehensive income (loss), net of taxes | (416) | 38 | (314) | 1,595 |
Comprehensive Income Attributable to Merck & Co., Inc. | $ 2,832 | $ 4,605 | $ 11,188 | $ 10,886 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 11,145 | $ 8,096 |
Short-term investments | 103 | 0 |
Accounts receivable (net of allowance for doubtful accounts of $77 in 2022 and $62 in 2021) | 9,482 | 9,230 |
Inventories (excludes inventories of $2,641 in 2022 and $2,194 in 2021 classified in Other assets - see Note 7) | 5,614 | 5,953 |
Other current assets | 7,217 | 6,987 |
Total current assets | 33,561 | 30,266 |
Investments | 984 | 370 |
Property, Plant and Equipment, at cost, net of accumulated depreciation of $17,921 in 2022 and $18,192 in 2021 | 20,424 | 19,279 |
Goodwill | 21,160 | 21,264 |
Other Intangibles, Net | 21,368 | 22,933 |
Other Assets | 9,584 | 11,582 |
Total Assets | 107,081 | 105,694 |
Current Liabilities | ||
Loans payable and current portion of long-term debt | 1,936 | 2,412 |
Trade accounts payable | 3,371 | 4,609 |
Accrued and other current liabilities | 14,222 | 13,859 |
Income taxes payable | 1,698 | 1,224 |
Dividends payable | 1,771 | 1,768 |
Total current liabilities | 22,998 | 23,872 |
Long-Term Debt | 28,482 | 30,690 |
Deferred Income Taxes | 2,417 | 3,441 |
Other Noncurrent Liabilities | 8,660 | 9,434 |
Merck & Co., Inc. Stockholders’ Equity | ||
Common stock, $0.50 par value Authorized - 6,500,000,000 shares Issued - 3,577,103,522 shares in 2022 and 2021 | 1,788 | 1,788 |
Other paid-in capital | 44,243 | 44,238 |
Retained earnings | 59,928 | 53,696 |
Accumulated other comprehensive loss | (4,743) | (4,429) |
Stockholders' equity before deduction for treasury stock | 101,216 | 95,293 |
Less treasury stock, at cost: 1,043,697,097 shares in 2022 and 1,049,499,023 shares in 2021 | 56,758 | 57,109 |
Total Merck & Co., Inc. stockholders’ equity | 44,458 | 38,184 |
Noncontrolling Interests | 66 | 73 |
Total equity | 44,524 | 38,257 |
Liabilities and Equity | $ 107,081 | $ 105,694 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 77 | $ 62 |
Inventories classified in Other assets | 2,641 | 2,194 |
Accumulated depreciation | $ 17,921 | $ 18,192 |
Common stock, par value (in dollars per share) | $ 0.50 | $ 0.50 |
Common stock, authorized (shares) | 6,500,000,000 | 6,500,000,000 |
Common stock, issued (in shares) | 3,577,103,522 | 3,577,103,522 |
Treasury stock (in shares) | 1,043,697,097 | 1,049,499,023 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows from Operating Activities of Continuing Operations | ||
Net income from continuing operations | $ 11,508 | $ 8,534 |
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities of continuing operations: | ||
Amortization | 1,623 | 1,231 |
Depreciation | 1,394 | 1,148 |
Intangible asset impairment charges | 910 | 0 |
Loss (income) from investments in equity securities, net | 1,361 | (1,535) |
Charge for the acquisition of Pandion Therapeutics, Inc. | 0 | 1,556 |
Deferred income taxes | (1,261) | 28 |
Share-based compensation | 396 | 360 |
Other | 1,169 | 499 |
Net changes in assets and liabilities | (2,435) | (3,794) |
Net Cash Provided by Operating Activities of Continuing Operations | 14,665 | 8,027 |
Cash Flows from Investing Activities of Continuing Operations | ||
Capital expenditures | (3,239) | (3,240) |
Purchases of securities and other investments | (710) | (1) |
Proceeds from sales of securities and other investments | 709 | 497 |
Acquisition of Pandion Therapeutics, Inc., net of cash acquired | 0 | (1,554) |
Other acquisitions, net of cash acquired | (121) | (89) |
Other | 149 | 15 |
Net Cash Used in Investing Activities of Continuing Operations | (3,212) | (4,372) |
Cash Flows from Financing Activities of Continuing Operations | ||
Net change in short-term borrowings | 0 | (3,983) |
Payments on debt | (2,250) | (1,153) |
Distribution from Organon & Co. | 0 | 9,000 |
Purchases of treasury stock | 0 | (822) |
Dividends paid to stockholders | (5,262) | (4,967) |
Proceeds from exercise of stock options | 119 | 68 |
Other | (172) | (253) |
Net Cash Used in Financing Activities of Continuing Operations | (7,565) | (2,110) |
Cash Flows from Discontinued Operations | ||
Net cash provided by operating activities | 0 | 1,051 |
Net cash used in investing activities | 0 | (134) |
Net cash used in financing activities | 0 | (504) |
Net Cash Flows Provided by Discontinued Operations | 0 | 413 |
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | (776) | (65) |
Net Increase in Cash, Cash Equivalents and Restricted Cash | 3,112 | 1,893 |
Cash, Cash Equivalents and Restricted Cash at Beginning of Year (includes restricted cash of $71 and $103 at January 1, 2022 and 2021, respectively, included in Other current assets) | 8,167 | 8,153 |
Cash, Cash Equivalents and Restricted Cash at End of Period (includes restricted cash of $134 and $30 at September 30, 2022 and 2021, respectively, included in Other current assets) | $ 11,279 | $ 10,046 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Cash Flows [Abstract] | ||||
Restricted cash | $ 134 | $ 71 | $ 30 | $ 103 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Merck & Co., Inc. (Merck or the Company) have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by accounting principles generally accepted in the United States (U.S.) (GAAP) for complete consolidated financial statements are not included herein. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Merck’s Form 10-K filed on February 25, 2022. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. In the Company’s opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. Spin-Off of Organon & Co. On June 2, 2021, Merck completed the spin-off of products from its women’s health, biosimilars and established brands businesses into a new, independent, publicly traded company named Organon & Co. (Organon) through a distribution of Organon’s publicly traded stock to Company shareholders. The distribution is expected to qualify and has been treated as tax-free to the Company and its shareholders for U.S. federal income tax purposes. The established brands included in the transaction consisted of dermatology, non-opioid pain management, respiratory, select cardiovascular products, as well as the rest of Merck’s diversified brands franchise. Merck’s existing research pipeline programs continue to be owned and developed within Merck as planned. The historical results of the businesses that were contributed to Organon in the spin-off have been reflected as discontinued operations in the Company’s consolidated financial statements through the date of the spin-off (see Note 2). Recently Adopted Accounting Standards In August 2020, the Financial Accounting Standards Board (FASB) issued amended guidance on the accounting for convertible instruments and contracts in an entity’s own equity. The guidance removes the separation model for convertible debt instruments and preferred stock, amends requirements for conversion options to be classified in equity as well as amends diluted earnings per share (EPS) calculations for certain convertible debt instruments. The Company adopted the new guidance on January 1, 2022 using a modified retrospective approach. There was no impact to the Company’s consolidated financial statements upon adoption. In November 2021, the FASB issued new guidance to increase the transparency of transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The guidance requires annual disclosures of such transactions to include the nature of the transactions and the significant terms and conditions, the accounting treatment and the impact to a company’s financial statements. The Company adopted the new guidance on January 1, 2022 on a prospective basis. There was no material impact to the Company’s consolidated financial statements upon adoption. In March 2020, the FASB issued optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and subsequently issued clarifying amendments. The guidance provides optional expedients and exceptions for accounting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The Company adopted the optional guidance on July 1, 2022 on a prospective basis. There was no material impact to the Company’s consolidated financial statements upon adoption. Recently Issued Accounting Standards Not Yet Adopted In October 2021, the FASB issued amended guidance that requires acquiring entities to recognize and measure contract assets and liabilities in a business combination in accordance with existing revenue recognition guidance. The amended guidance is effective for interim and annual periods in 2023 and is to be applied prospectively. Early adoption is permitted on a retrospective basis to the beginning of the fiscal year of adoption. The adoption of this guidance will not have an impact on the Company’s consolidated financial statements for prior acquisitions; however, the impact in future periods will be dependent upon the contract assets and contract liabilities acquired in future business combinations. |
Spin-Off of Organon & Co.
Spin-Off of Organon & Co. | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Spin-Off of Organon & Co. | Spin-Off of Organon & Co. On June 2, 2021, Merck completed the spin-off of Organon through a distribution of Organon’s publicly traded stock to Company shareholders. In connection with the spin-off, each Merck shareholder received one tenth of a share of Organon’s common stock for each share of Merck common stock held by such shareholder. The distribution is expected to qualify and has been treated as tax free to Merck and its shareholders for U.S. federal income tax purposes. Indebtedness of $9.5 billion principal amount, consisting of term loans and senior notes, was issued in 2021 in connection with the spin-off and assumed by Organon. Merck is no longer the obligor of any Organon debt or financing arrangements. Cash proceeds of $9.0 billion were distributed by Organon to Merck in connection with the spin-off. Also in connection with the spin-off, Merck and Organon entered into a separation and distribution agreement and also entered into various other agreements to effect the spin-off and provide a framework for the relationship between Merck and Organon after the spin-off, including a transition services agreement (TSA), manufacturing and supply agreements (MSAs), trademark license agreements, intellectual property license agreements, an employee matters agreement, a tax matters agreement and certain other commercial agreements. Under the TSA, Merck is providing Organon various services and, similarly, Organon is providing Merck various services. The provision of services under the TSA generally will terminate within 25 months following the spin-off; however, the provision of certain services has been extended to 31 months. Merck and Organon also entered into a series of interim operating agreements pursuant to which in various jurisdictions where Merck held licenses, permits and other rights in connection with marketing, import and/or distribution of Organon products prior to the separation, Merck is continuing to market, import and distribute such products until such time as the relevant licenses and permits are transferred to Organon. Under such interim operating agreements and in accordance with the separation and distribution agreement, Merck is continuing operations in the affected markets on behalf of Organon, with Organon receiving all of the economic benefits and burdens of such activities. Additionally, Merck and Organon entered into a number of MSAs pursuant to which Merck is (a) manufacturing and supplying certain active pharmaceutical ingredients for Organon, (b) manufacturing and supplying certain formulated pharmaceutical products for Organon, and (c) packaging and labeling certain finished pharmaceutical products for Organon. Similarly, Organon and Merck entered into a number of MSAs pursuant to which Organon is (a) manufacturing and supplying certain formulated pharmaceutical products for Merck, and (b) packaging and labeling certain finished pharmaceutical products for Merck. The terms of the MSAs range in initial duration from four years to ten years. The amounts included in the condensed consolidated statement of income for the above MSAs include sales of $100 million and $293 million and related cost of sales of $104 million and $312 million for the three and nine months ended September 30, 2022, respectively. The amounts included in the condensed consolidated statement of income for the MSAs in the same periods of 2021 were immaterial. Amounts included in the condensed consolidated statement of income for the TSAs were immaterial for the three and nine months ended September 30, 2022 and September 30, 2021. The amounts due from Organon under all of the above agreements were $567 million and $964 million at September 30, 2022 and December 31, 2021, respectively, and are reflected in Other current assets . The amounts due to Organon under these agreements were $333 million and $400 million at September 30, 2022 and December 31, 2021, respectively, and are included in Accrued and other current liabilities . The results of the women’s health, biosimilars and established brands businesses (previously included in the Pharmaceutical segment) that were contributed to Organon in the spin-off, as well as interest expense related to the debt issuance in 2021, have been reflected as discontinued operations in the Company’s condensed consolidated statement of income as Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests for periods prior to the spin-off on June 2, 2021. Merck incurred separation costs of $556 million for the nine months ended September 30, 2021 related to the spin-off of Organon, which are also included in Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests . These costs primarily relate to professional fees for separation activities within finance, tax, legal and information technology functions, as well as investment banking fees. Details of Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests are as follows: Nine Months Ended September 30, ($ in millions) 2021 (1) Sales $ 2,512 Costs, Expenses and Other Cost of sales 789 Selling, general and administrative 877 Research and development 103 Restructuring costs 1 Other (income) expense, net (15) 1,755 Income from discontinued operations before taxes 757 Income tax benefit (12) Income from discontinued operations, net of taxes 769 Less: Income of discontinued operations attributable to noncontrolling interests 3 $ 766 (1) Reflects amounts through the June 2, 2021 spin-off date. |
Acquisitions, Research Collabor
Acquisitions, Research Collaborations and License Agreements | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions, Research Collaborations and License Agreements | Acquisitions, Research Collaborations and License Agreements The Company continues to pursue acquisitions and the establishment of external alliances such as research collaborations and licensing agreements to complement its internal research capabilities. These arrangements often include upfront payments, as well as expense reimbursements or payments to the third party, and milestone, royalty or profit share arrangements, contingent upon the occurrence of certain future events linked to the success of the asset in development. The Company also reviews its marketed products and pipeline to examine candidates which may provide more value through out-licensing and, as part of its portfolio assessment process, may also divest certain assets. Pro forma financial information for acquired businesses is not presented if the historical financial results of the acquired entity are not significant when compared with the Company’s financial results. 2022 Transactions In October 2022, Merck and Royalty Pharma plc (Royalty Pharma) entered into a funding arrangement under which Royalty Pharma paid Merck $50 million to co-fund Merck’s development costs for a Phase 2b trial of MK-8189, an investigational oral Phosphodiesterase 10A (PDE10A) inhibitor, which is being evaluated for the treatment of schizophrenia. Under the agreement, Royalty Pharma has no rights to MK-8189 and has no decision-making authority over the program. If Merck elects to advance MK-8189 into a Phase 3 study, Royalty Pharma has the option to provide additional funding of 50% of the development costs up to $375 million for the Phase 3 trial. If such additional funding is provided, Royalty Pharma becomes eligible to receive future regulatory milestone payments contingent upon certain marketing approvals, as well as royalties. In September 2022, Merck exercised its option to jointly develop and commercialize personalized cancer vaccine mRNA-4157/V940 pursuant to the terms of an existing collaboration and license agreement with Moderna, Inc. (Moderna), which resulted in a $250 million charge in Research and development expenses in the third quarter and first nine months of 2022. The payment to Moderna was made in the fourth quarter of 2022. mRNA-4157/V940 is currently being evaluated in combination with Keytruda (pembrolizumab), Merck’s anti-PD-1 therapy, as adjuvant treatment for patients with high-risk melanoma in a Phase 2 clinical trial being conducted by Moderna. Under the 2016 agreement, as amended in 2018, Merck and Moderna will collaborate on development and commercialization and will share costs and any profits equally under this worldwide collaboration. In August 2022, Merck and Orna Therapeutics (Orna), a biotechnology company pioneering a new investigational class of engineered circular RNA (oRNA) therapies, entered into a collaboration agreement to discover, develop, and commercialize multiple programs, including vaccines and therapeutics in the areas of infectious disease and oncology. Under the terms of the agreement, Merck made an upfront payment to Orna of $150 million, which was recorded in Research and development expenses in the third quarter and first nine months of 2022. In addition, Orna is eligible to receive future contingent development-related payments aggregating up to $440 million, $675 million in regulatory milestones, and $2.4 billion in sales milestones associated with the progress of the multiple vaccine and therapeutic programs, as well as royalties ranging from a high-single-digit rate to a low-double-digit rate on any approved products derived from the collaboration. Merck also invested $100 million in Orna’s Series B preferred shares in the fourth quarter of 2022. In July 2022, Merck and Orion Corporation (Orion) announced a global co-development and co-commercialization agreement for Orion’s investigational candidate ODM-208 (MK-5684) and other drugs targeting cytochrome P450 11A1 (CYP11A1), an enzyme important in steroid production. ODM-208 is an oral, non-steroidal inhibitor of CYP11A1 currently being evaluated in a Phase 2 clinical trial for the treatment of patients with metastatic castration-resistant prostate cancer. Merck made an upfront payment to Orion of $290 million, which was recorded in Research and development expenses in the third quarter and first nine months of 2022. Orion is responsible for the manufacture of clinical and commercial supply of ODM-208. In addition, the contract provides both parties with an option to convert the initial co-development and co-commercialization agreement into a global exclusive license to Merck. If the option is exercised, Merck would assume full responsibility for all past development and commercialization expenses associated with the program since inception of the agreement, as well as all future development and commercialization expenses. In addition, Orion would be eligible to receive milestone payments associated with progress in the development and commercialization of ODM-208 as well as tiered double-digit royalties on sales if the product is approved. Also in July 2022, Merck and Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. (Kelun-Biotech) closed a license and collaboration agreement in which Merck gained exclusive worldwide rights for the development, manufacture and commercialization of an investigational antibody drug conjugate (ADC) (MK-1200) for the treatment of solid tumors. Under the terms of the agreement, Merck and Kelun-Biotech will collaborate on the early clinical development of the investigational ADC. Merck made an upfront payment of $35 million, which was recorded in Research and development expenses in the third quarter and first nine months of 2022. Kelun-Biotech is also eligible to receive future contingent milestone payments aggregating up to $82 million in developmental milestones, $334 million in regulatory milestones, and $485 million in sales-based milestones. The agreement also provides for Merck to pay tiered royalties ranging from a mid-single-digit rate to a low-double-digit rate on future net sales. In May 2022, in connection with an existing arrangement, Merck exercised its option to obtain an exclusive license outside of China for the development, manufacture and commercialization of Kelun-Biotech’s trophoblast antigen 2 (TROP2)-targeting ADC programs, including its lead compound, SKB-264 (MK-2870). SKB-264 is currently being evaluated in Phase 2 trials for non-small-cell lung cancer and advanced solid tumors. Under the terms of the agreement, Merck and Kelun-Biotech will collaborate on certain early clinical development plans, including evaluating the potential of SKB-264 as a monotherapy and in combination with Keytruda for advanced solid tumors. Upon option exercise, Merck made a payment of $30 million, which was recorded in Research and development expenses in the first nine months of 2022, and agreed to make additional payments of $30 million upon completion of specified project activities and $25 million upon technology transfer. Merck also agreed to make quarterly payments in 2022 and 2023 aggregating up to $101 million to fund Kelun-Biotech’s ongoing research and development activities. In addition, Kelun-Biotech is eligible to receive future contingent milestone payments (which includes all program compounds) aggregating up to $90 million in developmental milestones, $290 million in first commercial sale milestones, and $780 million in sales-based milestones. The agreement also provides for Merck to pay tiered royalties ranging from a mid-single-digit rate to a low-double-digit rate on future net sales. 2021 Transactions In April 2021, Merck acquired Pandion Therapeutics, Inc. (Pandion), a clinical-stage biotechnology company developing novel therapeutics designed to address the unmet needs of patients living with autoimmune diseases. Pandion is advancing a pipeline of precision immune modulators targeting critical immune control nodes. Total consideration paid of $1.9 billion included $147 million of costs primarily comprised of share-based compensation payments to settle equity awards. The transaction was accounted for as an acquisition of an asset. Merck recorded net assets of $156 million (primarily cash) and Research and development expenses of $1.7 billion in the first nine months of 2021 related to the transaction. There are no future contingent payments associated with the acquisition. In January 2021, Merck entered into an exclusive license and research collaboration agreement with Artiva Biotherapeutics, Inc. (Artiva) to discover, develop and manufacture CAR-NK cells that target certain solid tumors using Artiva’s proprietary platform. Merck and Artiva agreed to engage in up to three different research programs, each covering a collaboration target. Merck has sole responsibility for all development and commercialization activities (including regulatory filing and approval). Under the terms of the agreement, Merck made an upfront payment of $30 million, which was included in Research and development expenses in the first nine months of 2021, for license and other rights for the first two collaboration targets and agreed to make another upfront payment of $15 million for license and other rights for the third collaboration target when it is selected by Merck and accepted by Artiva. In addition, Artiva is eligible to receive future contingent milestone payments (which span all three collaboration targets), aggregating up to $217.5 million in developmental milestones, $570 million in regulatory milestones, and $1.05 billion in sales-based milestones. The agreement also provides for Merck to pay tiered royalties ranging from 7% to 14% on future sales. As part of Merck’s 2020 acquisition of OncoImmune, Merck obtained MK-7110, a therapeutic candidate that was being evaluated for the treatment of patients hospitalized with COVID-19. In 2021, Merck received feedback from the U.S. Food and Drug Administration (FDA) that additional data would be needed to support a potential Emergency Use Authorization application and therefore the Company did not expect MK-7110 would become available until the first half of 2022. Given this timeline and the technical, clinical and regulatory uncertainties, the availability of a number of medicines for patients hospitalized with COVID-19, and the need to concentrate Merck’s resources on accelerating the development and manufacture of the most viable therapeutics and vaccines, Merck decided to discontinue development of MK-7110 for the treatment of COVID-19. Due to the discontinuation, the Company recorded charges of $207 million in the first nine months of 2021, which are reflected in Cost of sales and relate to fixed assets and materials written off, as well as the recognition of liabilities for purchase commitments . |
Collaborative Arrangements
Collaborative Arrangements | 9 Months Ended |
Sep. 30, 2022 | |
Collaborative Arrangements [Abstract] | |
Collaborative Arrangements | Collaborative Arrangements Merck has entered into collaborative arrangements that provide the Company with varying rights to develop, produce and market products together with its collaborative partners. Both parties in these arrangements are active participants and exposed to significant risks and rewards dependent on the commercial success of the activities of the collaboration. Merck’s more significant collaborative arrangements are discussed below. AstraZeneca In 2017, Merck and AstraZeneca PLC (AstraZeneca) entered into a global strategic oncology collaboration to co-develop and co-commercialize AstraZeneca’s Lynparza (olaparib) for multiple cancer types. Independently, Merck and AstraZeneca will develop and commercialize Lynparza in combinations with their respective PD-1 and PD-L1 medicines, Keytruda and Imfinzi. The companies are also jointly developing and commercializing AstraZeneca’s Koselugo (selumetinib) for multiple indications. Under the terms of the agreement, AstraZeneca and Merck will share the development and commercialization costs for Lynparza and Koselugo monotherapy and non-PD-L1/PD-1 combination therapy opportunities. Profits from Lynparza and Koselugo product sales generated through monotherapies or combination therapies are shared equally. AstraZeneca is the principal on Lynparza and Koselugo sales transactions. Merck records its share of Lynparza and Koselugo product sales, net of cost of sales and commercialization costs, as alliance revenue and its share of development costs associated with the collaboration as part of Research and development expenses. Reimbursements received from AstraZeneca for research and development expenses are recognized as reductions to Research and development costs. As part of the agreement, Merck made an upfront payment to AstraZeneca and also made payments over a multi-year period for certain license options. In addition, the agreement provides for contingent payments from Merck to AstraZeneca related to the successful achievement of sales-based and regulatory milestones. In the first quarter of 2022, Merck determined it was probable that sales of Lynparza in the future would trigger a $600 million sales-based milestone payment from Merck to AstraZeneca. Accordingly, Merck recorded a $600 million liability and a corresponding increase to the intangible asset related to Lynparza. Merck also recognized $250 million of cumulative amortization catch-up expense related to the recognition of this milestone in the first quarter of 2022. In the first nine months of 2022, Merck made a sales-based milestone payment to AstraZeneca (which had been previously accrued for) of $400 million. As of September 30, 2022, sales-based milestone payments accrued but not yet paid totaled $600 million. Potential future sales-based milestone payments of $2.1 billion have not yet been accrued as they are not deemed by the Company to be probable at this time. In the first nine months of 2022, Lynparza received regulatory approvals triggering capitalized milestone payments of $250 million from Merck to AstraZeneca. Potential future regulatory milestone payments of $1.2 billion remain under the agreement. The intangible asset balance related to Lynparza (which includes capitalized sales-based and regulatory milestone payments) was $1.5 billion at September 30, 2022 and is included in Other Intangibles, Net . The amount is being amortized over its estimated useful life through 2028 as supported by projected future cash flows, subject to impairment testing. Summarized financial information related to this collaboration is as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Alliance revenue - Lynparza $ 284 $ 246 $ 825 $ 721 Alliance revenue - Koselugo 10 6 43 20 Total alliance revenue $ 294 $ 252 $ 868 $ 741 Cost of sales (1) 64 42 425 125 Selling, general and administrative 45 44 135 127 Research and development 28 27 79 87 ($ in millions) September 30, 2022 December 31, 2021 Receivables from AstraZeneca included in Other current assets $ 290 $ 271 Payables to AstraZeneca included in Trade accounts payable and Accrued and other current liabilities (2) 12 415 Payables to AstraZeneca included in Other Noncurrent Liabilities (2) 600 — (1) Represents amortization of capitalized milestone payments. Amount in the first nine months of 2022 includes $250 million of cumulative amortization catch-up expense as noted above. (2) Includes accrued milestone payments. Eisai In 2018, Merck and Eisai Co., Ltd. (Eisai) announced a strategic collaboration for the worldwide co-development and co-commercialization of Lenvima (lenvatinib), an orally available tyrosine kinase inhibitor discovered by Eisai. Under the agreement, Merck and Eisai will develop and commercialize Lenvima jointly, both as monotherapy and in combination with Keytruda . Eisai records Lenvima product sales globally (Eisai is the principal on Lenvima sales transactions) and Merck and Eisai share applicable profits equally. Merck records its share of Lenvima product sales, net of cost of sales and commercialization costs, as alliance revenue. Expenses incurred during co-development are shared by the two companies in accordance with the collaboration agreement and reflected in Research and development expenses. Certain expenses incurred solely by Merck or Eisai are not shareable under the collaboration agreement, including costs incurred in excess of agreed upon caps and costs related to certain combination studies of Keytruda and Lenvima. Under the agreement, Merck made an upfront payment to Eisai and also made payments over a multi-year period for certain option rights (of which the final $125 million option payment was made in March 2021). In addition, the agreement provides for contingent payments from Merck to Eisai related to the successful achievement of sales-based and regulatory milestones. In the first nine months of 2022, Merck made sales-based milestone payments to Eisai (which had been previously accrued for) aggregating $600 million. Potential future sales-based milestone payments of $2.6 billion have not yet been accrued as they are not deemed by the Company to be probable at this time. In the first nine months of 2022, Lenvima received regulatory approvals triggering capitalized milestone payments of $50 million from Merck to Eisai. There are no regulatory milestone payments remaining under the agreement. The intangible asset balance related to Lenvima (which includes capitalized sales-based and regulatory milestone payments) was $867 million at September 30, 2022 and is included in Other Intangibles, Net . The amount is being amortized over its estimated useful life through 2026 as supported by projected future cash flows, subject to impairment testing. Summarized financial information related to this collaboration is as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Alliance revenue - Lenvima $ 202 $ 188 $ 660 $ 498 Cost of sales (1) 53 49 159 143 Selling, general and administrative 42 34 115 88 Research and development 24 43 128 165 ($ in millions) September 30, 2022 December 31, 2021 Receivables from Eisai included in Other current assets $ 202 $ 200 Payables to Eisai included in Accrued and other current liabilities (2) 1 625 (1) Represents amortization of capitalized milestone payments. (2) Amount as of December 31, 2021 includes accrued milestone payments. Bayer AG In 2014, the Company entered into a worldwide clinical development collaboration with Bayer AG (Bayer) to market and develop soluble guanylate cyclase (sGC) modulators including Bayer’s Adempas (riociguat). The two companies have implemented a joint development and commercialization strategy. The collaboration also includes development of Bayer’s Verquvo (vericiguat), which was approved in the U.S. in January 2021, in Japan in June 2021 and in the EU in July 2021. Under the agreement, Bayer commercializes Adempas in the Americas, while Merck commercializes in the rest of the world. For Verquvo, Merck commercializes in the U.S. and Bayer commercializes in the rest of the world. Both companies share in development costs and profits on sales. Merck records sales of Adempas and Verquvo in its marketing territories, as well as alliance revenue. Alliance revenue represents Merck’s share of profits from sales of Adempas and Verquvo in Bayer’s marketing territories, which are product sales net of cost of sales and commercialization costs. Cost of sales includes Bayer’s share of profits from sales in Merck’s marketing territories. In addition, the agreement provided for contingent payments from Merck to Bayer related to the successful achievement of sales-based milestones. In January 2022, Merck made the final $400 million sales-based milestone payment under this collaboration to Bayer. The intangible asset balances related to Adempas (which includes the acquired intangible asset balance, as well as capitalized sales-based milestone payments attributed to Adempas) and Verquvo (which reflects the portion of the final sales-based milestone payment that was attributed to Verquvo) were $597 million and $53 million, respectively, at September 30, 2022 and are included in Other Intangibles, Net . The assets are being amortized over their estimated useful lives (through 2027 for Adempas and through 2031 for Verquvo) as supported by projected future cash flows, subject to impairment testing. Summarized financial information related to this collaboration is as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Alliance revenue - Adempas/Verquvo $ 88 $ 100 $ 258 $ 248 Net sales of Adempas recorded by Merck 57 59 181 188 Net sales of Verquvo recorded by Merck 6 2 15 3 Total sales $ 151 $ 161 $ 454 $ 439 Cost of sales (1) 55 53 158 328 Selling, general and administrative 42 31 107 84 Research and development 18 16 52 36 ($ in millions) September 30, 2022 December 31, 2021 Receivables from Bayer included in Other current assets $ 144 $ 114 Payables to Bayer included in Accrued and other current liabilities (2) 75 472 (1) Includes amortization of intangible assets. Amount in the first nine months of 2021 includes $153 million of cumulative amortization catch-up expense. In addition, cost of sales includes Bayer’s share of profits from sales in Merck’s marketing territories. (2) Amount as of December 31, 2021 includes accrued milestone payment. Ridgeback Biotherapeutics LP In 2020, Merck and Ridgeback Biotherapeutics LP (Ridgeback), a closely held biotechnology company, entered into a collaboration agreement to develop Lagevrio (molnupiravir), an orally available antiviral candidate in clinical development for the treatment of patients with COVID-19. Merck gained exclusive worldwide rights to develop and commercialize Lagevrio and related molecules. Under the terms of the agreement, Ridgeback received an upfront payment and is eligible to receive future contingent payments dependent upon the achievement of certain developmental and regulatory approval milestones. The agreement also provides for Merck to reimburse Ridgeback for a portion of certain third-party contingent milestone payments and royalties on net sales, which is part of the profit sharing calculation. Merck is the principal on sales transactions, recognizing sales and related costs, with profit sharing amounts recorded within Cost of sales . Profits from the collaboration are split equally between the partners. Reimbursements from Ridgeback for its share of research and development costs (deducted from Ridgeback’s share of profits) are reflected as decreases to Research and development expenses. Lagevrio has received multiple authorizations or approvals worldwide and Merck has entered into advance purchase and supply agreements for Lagevrio in more than 40 markets. As of September 30, 2022, the Company has 0.8 million remaining courses to be supplied under these agreements. Summarized financial information related to this collaboration is as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Lagevrio sales $ 436 $ — $ 4,859 $ — Cost of sales (1) 234 4 2,580 56 Selling, general and administrative 41 6 105 13 Research and development 8 58 29 167 ($ in millions) September 30, 2022 December 31, 2021 Payables to Ridgeback included in Accrued and other current liabilities (2) $ 193 $ 283 (1) Includes royalty expense and amortization of capitalized milestone payments. (2) Includes accrued royalty and milestone payments. Bristol Myers Squibb Reblozyl (luspatercept-aamt) is a first-in-class erythroid maturation recombinant fusion protein obtained as part of Merck’s November 2021 acquisition of Acceleron Pharma Inc. that is being developed and commercialized through a global collaboration with Bristol Myers Squibb (BMS). Reblozyl is approved in the U.S., Europe, Canada and Australia for the treatment of anemia in certain rare blood disorders and is also being evaluated for additional indications for hematology therapies. BMS is the principal on sales transactions for Reblozyl; however, Merck co-promotes Reblozyl (and will co-promote all future products approved under this collaboration) in North America, which is reimbursed by BMS. Merck receives a 20% sales royalty from BMS which could increase to a maximum of 24% based on sales levels. This royalty will be reduced by 50% upon the earlier of patent expiry or generic entry on an indication-by-indication basis in each market. Additionally, Merck is eligible to receive future contingent sales-based milestone payments of up to $80 million. Merck recorded alliance revenue of $39 million (consisting of royalties) within Sales in the third quarter of 2022 related to this collaboration. Merck recorded alliance revenue of $124 million in the first nine months of 2022, which includes royalties of $104 million, as well as the receipt of a regulatory approval milestone payment of $20 million. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In 2019, Merck approved a global restructuring program (Restructuring Program) as part of a worldwide initiative focused on further optimizing the Company’s manufacturing and supply network, as well as reducing its global real estate footprint. This program is a continuation of the Company’s plant rationalization and builds on prior restructuring programs. The actions currently contemplated under the Restructuring Program are expected to be substantially completed by the end of 2023, with the cumulative pretax costs to be incurred by the Company to implement the program estimated to be approximately $3.5 billion. The Company estimates that approximately 70% of the cumulative pretax costs will result in cash outlays, primarily related to employee separation expense and facility shut-down costs. Approximately 30% of the cumulative pretax costs will be non-cash, relating primarily to the accelerated depreciation of facilities to be closed or divested. The Company recorded total pretax costs of $175 million and $168 million in the third quarter of 2022 and 2021, respectively, and $559 million and $630 million for the first nine months of 2022 and 2021, respectively, related to restructuring program activities. Since inception of the Restructuring Program through September 30, 2022, Merck has recorded total pretax accumulated costs of approximately $3.2 billion. For the full year of 2022, the Company expects to record charges of approximately $600 million related to the Restructuring Program. For segment reporting, restructuring charges are unallocated expenses. The following tables summarize the charges related to restructuring program activities by type of cost: Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 ($ in millions) Separation Accelerated Other Total Separation Accelerated Other Total Cost of sales $ — $ 16 $ 38 $ 54 $ — $ 51 $ 116 $ 167 Selling, general and administrative — 5 21 26 — 17 57 74 Research and development — — 1 1 — 29 1 30 Restructuring costs 65 — 29 94 197 — 91 288 $ 65 $ 21 $ 89 $ 175 $ 197 $ 97 $ 265 $ 559 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 ($ in millions) Separation Accelerated Other Total Separation Accelerated Other Total Cost of sales $ — $ 11 $ 37 $ 48 $ — $ 32 $ 81 $ 113 Selling, general and administrative — 4 1 5 — 8 1 9 Research and development — 7 1 8 — 20 1 21 Restructuring costs 17 — 90 107 310 — 177 487 $ 17 $ 22 $ 129 $ 168 $ 310 $ 60 $ 260 $ 630 Separation costs are associated with actual headcount reductions, as well as those headcount reductions which were probable and could be reasonably estimated. Accelerated depreciation costs primarily relate to manufacturing, research and administrative facilities and equipment to be sold or closed as part of the program. 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 have and 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. Other activity in 2022 and 2021 includes asset abandonment, facility shut-down 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 11) and share-based compensation. The following table summarizes the charges and spending relating to restructuring program activities for the nine months ended September 30, 2022: ($ in millions) Separation Accelerated Other Total Restructuring reserves January 1, 2022 $ 596 $ — $ 41 $ 637 Expense 197 97 265 559 (Payments) receipts, net (303) — (458) (761) Non-cash activity — (97) 183 86 Restructuring reserves September 30, 2022 (1) $ 490 $ — $ 31 $ 521 |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments Derivative Instruments and Hedging Activities The Company manages the impact of foreign exchange rate movements and interest rate movements on its earnings, cash flows and fair values of assets and liabilities through operational means and through the use of various financial instruments, including derivative instruments. A significant portion of the Company’s revenues and earnings in foreign affiliates is exposed to changes in foreign exchange rates. The objectives of and accounting related to the Company’s foreign currency risk management program, as well as its interest rate risk management activities are discussed below. Foreign Currency Risk Management The Company has established revenue hedging, balance sheet risk management and net investment hedging programs to protect against volatility of future foreign currency cash flows and changes in fair value caused by changes in foreign exchange rates. The objective of the revenue hedging program is to reduce the variability caused by changes in foreign exchange rates that would affect the U.S. dollar value of future cash flows derived from foreign currency denominated sales, primarily the euro, Japanese yen and Chinese renminbi. To achieve this objective, the Company will hedge a portion of its forecasted foreign currency denominated third-party and intercompany distributor entity sales (forecasted sales) that are expected to occur over its planning cycle, typically no more than two years into the future. The Company will layer in hedges over time, increasing the portion of forecasted sales hedged as it gets closer to the expected date of the forecasted sales. The portion of forecasted sales hedged is based on assessments of cost-benefit profiles that consider natural offsetting exposures, revenue and exchange rate volatilities and correlations, and the cost of hedging instruments. The Company manages its anticipated transaction exposure principally with purchased local currency put options, forward contracts and purchased collar options. The fair values of these derivative contracts are recorded as either assets (gain positions) or liabilities (loss positions) in the Condensed Consolidated Balance Sheet. Changes in the fair value of derivative contracts are recorded each period in either current earnings or Other comprehensive income (OCI), depending on whether the derivative is designated as part of a hedge transaction and, if so, the type of hedge transaction. For derivatives that are designated as cash flow hedges, the unrealized gains or losses on these contracts are recorded in Accumulated Other Comprehensive Loss ( AOCL) and reclassified into Sales when the hedged anticipated revenue is recognized. For those derivatives which are not designated as cash flow hedges, but serve as economic hedges of forecasted sales, unrealized gains or losses are recorded in Sales each period. The cash flows from both designated and non-designated contracts are reported as operating activities in the Condensed Consolidated Statement of Cash Flows. The Company does not enter into derivatives for trading or speculative purposes. The Company manages operating activities and net asset positions at each local subsidiary in order to mitigate the effects of exchange on monetary assets and liabilities. The Company also uses a balance sheet risk management program to mitigate the exposure of net monetary assets that are denominated in a currency other than a subsidiary’s functional currency from the effects of volatility in foreign exchange. In these instances, Merck principally utilizes forward exchange contracts to offset the effects of exchange on exposures denominated in developed country currencies, primarily the euro, Japanese yen, British pound, Canadian dollar and Swiss franc. For exposures in developing country currencies, including the Chinese renminbi, the Company will enter into forward contracts to offset the effects of exchange on exposures when it is deemed economical to do so based on a cost-benefit analysis that considers the magnitude of the exposure, the volatility of the exchange rate and the cost of the hedging instrument. The cash flows from these contracts are reported as operating activities in the Condensed Consolidated Statement of Cash Flows. Monetary assets and liabilities denominated in a currency other than the functional currency of a given subsidiary are remeasured at spot rates in effect on the balance sheet date with the effects of changes in spot rates reported in Other (income) expense, net . The forward contracts are not designated as hedges and are marked to market through Other (income) expense, net . Accordingly, fair value changes in the forward contracts help mitigate the changes in the value of the remeasured assets and liabilities attributable to changes in foreign currency exchange rates, except to the extent of the spot-forward differences. These differences are not significant due to the short-term nature of the contracts, which typically have average maturities at inception of less than one year. The Company also uses forward exchange contracts to hedge a portion of its net investment in foreign operations against movements in exchange rates. The forward contracts are designated as hedges of the net investment in a foreign operation. The unrealized gains or losses on these contracts are recorded in foreign currency translation adjustment within OCI and remain in AOCL until either the sale or complete or substantially complete liquidation of the subsidiary. The Company excludes certain portions of the change in fair value of its derivative instruments from the assessment of hedge effectiveness (excluded components). Changes in fair value of the excluded components are recognized in OCI . The Company recognizes in earnings the initial value of the excluded components on a straight-line basis over the life of the derivative instrument, rather than using the mark-to-market approach. The cash flows from these contracts are reported as investing activities in the Condensed Consolidated Statement of Cash Flows. Foreign exchange risk is also managed through the use of foreign currency debt. The Company’s senior unsecured euro-denominated notes have been designated as, and are effective as, economic hedges of the net investment in a foreign operation. Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on the euro-denominated debt instruments are included in foreign currency translation adjustment within OCI . The effects of the Company’s net investment hedges on OCI and the Consolidated Statement of Income are shown below: Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income (1) Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30, ($ in millions) 2022 2021 2022 2021 2022 2021 2022 2021 Net Investment Hedging Relationships Foreign exchange contracts $ (1) $ 1 $ (47) $ (27) $ — $ (4) $ (2) $ (12) Euro-denominated notes (250) (77) (431) (199) — — — — (1) No amounts were reclassified from AOCL into income related to the sale of a subsidiary. Interest Rate Risk Management The Company may use interest rate swap contracts on certain investing and borrowing transactions to manage its net exposure to interest rate changes and to reduce its overall cost of borrowing. The Company does not use leveraged swaps and, in general, does not leverage any of its investment activities that would put principal at risk. In February 2022, five interest rate swap contracts with a total notional amount of $1.25 billion matured. These swaps effectively converted the Company’s $1.25 billion, 2.35% fixed-rate notes due 2022 to variable rate debt. In September 2022, four interest rate swap contracts with a total notional amount of $1.0 billion matured. These swaps effectively converted the Company’s $1.0 billion, 2.40% fixed rate notes due 2022 to variable rate debt. The interest rate swap contracts were designated hedges of the fair value changes in the notes attributable to changes in the benchmark LIBOR swap rate. The fair value changes in the notes attributable to changes in the LIBOR swap rate were recorded in interest expense along with the offsetting fair value changes in the swap contracts. The cash flows from these contracts are reported as operating activities in the Condensed Consolidated Statement of Cash Flows. The Company is not currently a party to any interest rate swaps. The table below presents the location of amounts recorded in the Condensed Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Increase (Decrease) Included in the Carrying Amount ($ in millions) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Balance Sheet Line Item in which Hedged Item is Included Loans payable and current portion of long-term debt $ — $ 2,263 $ — $ 13 Presented in the table below is the fair value of derivatives on a gross basis segregated between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments: September 30, 2022 December 31, 2021 Fair Value of Derivative U.S. Dollar Fair Value of Derivative U.S. Dollar ($ in millions) Asset Liability Asset Liability Derivatives Designated as Hedging Instruments Balance Sheet Caption Interest rate swap contracts Other current assets $ — $ — $ — $ 14 $ — $ 2,250 Foreign exchange contracts Other current assets 826 — 7,250 271 — 6,778 Foreign exchange contracts Other Assets 85 — 1,408 43 — 1,551 Foreign exchange contracts Accrued and other current liabilities — 1 37 — 24 1,623 Foreign exchange contracts Other Noncurrent Liabilities — 1 93 — 1 43 $ 911 $ 2 $ 8,788 $ 328 $ 25 $ 12,245 Derivatives Not Designated as Hedging Instruments Balance Sheet Caption Foreign exchange contracts Other current assets $ 597 $ — $ 9,523 $ 221 $ — $ 10,073 Foreign exchange contracts Accrued and other current liabilities — 240 7,715 — 96 10,640 $ 597 $ 240 $ 17,238 $ 221 $ 96 $ 20,713 $ 1,508 $ 242 $ 26,026 $ 549 $ 121 $ 32,958 As noted above, the Company records its derivatives on a gross basis in the Condensed Consolidated Balance Sheet. The Company has master netting agreements with several of its financial institution counterparties (see Concentrations of Credit Risk below). The following table provides information on the Company’s derivative positions subject to these master netting arrangements as if they were presented on a net basis, allowing for the right of offset by counterparty and cash collateral exchanged per the master agreements and related credit support annexes: September 30, 2022 December 31, 2021 ($ in millions) Asset Liability Asset Liability Gross amounts recognized in the condensed consolidated balance sheet $ 1,508 $ 242 $ 549 $ 121 Gross amounts subject to offset in master netting arrangements not offset in the condensed consolidated balance sheet (217) (217) (110) (110) Cash collateral received (794) — (164) — Net amounts $ 497 $ 25 $ 275 $ 11 The table below provides information regarding the location and amount of pretax gains and losses of derivatives designated in fair value or cash flow hedging relationships: Three Months Ended September 30, Nine Months Ended September 30, ($ in millions) 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Financial Statement Line Items in which Effects of Fair Value or Cash Flow Hedges are Recorded Sales Other (income) expense, net (1) Other comprehensive income (loss) Sales Other (income) expense, net (1) Other comprehensive income (loss) $ 14,959 $ 13,154 $ 429 $ (450) $ (416) $ 38 $ 45,453 $ 35,183 $ 1,576 $ (1,007) $ (314) $ 1,595 (Gain) loss on fair value hedging relationships Interest rate swap contracts Hedged items — — 1 (9) — — — — (13) (29) — — Derivatives designated as hedging instruments — — — (1) — — — — 4 (1) — — Impact of cash flow hedging relationships Foreign exchange contracts Amount of gain recognized in OCI on derivatives — — — — 682 72 — — — — 1,233 193 Increase (decrease) in Sales as a result of AOCL reclassifications 253 (36) — — (253) 36 491 (219) — — (491) 219 Interest rate contracts Amount of gain recognized in Other (income) expense, net on derivatives — — (1) — — — — — (2) (2) — — Amount of loss recognized in OCI on derivatives — — — — (1) — — — — — (2) (2) (1) Interest expense is a component of Other (income) expense, net. The table below provides information regarding the income statement effects of derivatives not designated as hedging instruments: Amount of Derivative Pretax (Gain) Loss Recognized in Income Three Months Ended September 30, Nine Months Ended September 30, ($ in millions) 2022 2021 2022 2021 Derivatives Not Designated as Hedging Instruments Income Statement Caption Foreign exchange contracts (1) Other (income) expense, net $ (41) $ 18 $ (77) $ 234 Foreign exchange contracts (2) Sales (4) (4) (42) 6 (1) These derivative contracts primarily mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates. Amount in the first nine months of 2021 includes a loss on forward exchange contracts entered into in conjunction with the spin-off of Organon. (2) These derivative contracts serve as economic hedges of forecasted transactions. At September 30, 2022, the Company estimates $864 million of pretax net unrealized gains on derivatives maturing within the next 12 months that hedge foreign currency denominated sales over that same period will be reclassified from AOCL to Sales . The amount ultimately reclassified to Sales may differ as foreign exchange rates change. Realized gains and losses are ultimately determined by actual exchange rates at maturity. Investments in Debt and Equity Securities Information on investments in debt and equity securities is as follows: September 30, 2022 December 31, 2021 Amortized Gross Unrealized Fair Amortized Gross Unrealized Fair ($ in millions) Gains Losses Gains Losses U.S. government and agency securities $ 67 $ — $ — $ 67 $ 80 $ — $ — $ 80 Commercial paper 4 — — 4 — — — — Corporate notes and bonds 3 — — 3 4 — — 4 Foreign government bonds 2 — — 2 2 — — 2 Total debt securities $ 76 $ — $ — $ 76 $ 86 $ — $ — $ 86 Publicly traded equity securities (1) 1,334 1,647 Total debt and publicly traded equity securities $ 1,410 $ 1,733 (1) Unrealized net losses of $221 million and $415 million were recorded in Other (income) expense, net in the third quarter and first nine months of 2022, respectively, on equity securities still held at September 30, 2022. Unrealized net (gains) losses of $(90) million and $109 million were recorded in Other (income) expense, net in the third quarter and first nine months of 2021, respectively, on equity securities still held at September 30, 2021. At September 30, 2022 and September 30, 2021, the Company also had $705 million and $578 million, respectively, of equity investments without readily determinable fair values included in Other Assets . The Company records unrealized gains on these equity investments based on favorable observable price changes from transactions involving similar investments of the same investee and records unrealized losses based on unfavorable observable price changes, which are included in Other (income) expense, net . During the first nine months of 2022 , the Company recorded unrealized gains of $21 million and unrealized net losses of $12 million related to certain of these equity investments still held at September 30, 2022. During the first nine months of 2021 , the Company recorded unrealized gains of $104 million and unrealized losses of $1 million related to certain of these investments still held at September 30, 2021. Cumulative unrealized gains and cumulative unrealized losses based on observable price changes for investments in equity investments without readily determinable fair values still held at September 30, 2022 were $255 million and $19 million, respectively. At September 30, 2022 and September 30, 2021, the Company also had $655 million and $1.2 billion, respectively, recorded in Other Assets for equity securities held through ownership interests in investment funds. Losses (gains) recorded in Other (income) expense, net relating to these investment funds were $141 million and $(391) million for the third quarter of 2022 and 2021, respectively, and were $952 million and $(893) million for the first nine months of 2022 and 2021, respectively. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses a fair value hierarchy which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. There are three levels of inputs used to measure fair value with Level 1 having the highest priority and Level 3 having the lowest: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; Level 3 - Unobservable inputs that are supported by little or no market activity. Level 3 assets or liabilities are those whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques with significant unobservable inputs, as well as assets or liabilities for which the determination of fair value requires significant judgment or estimation. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Fair Value Measurements Using Fair Value Measurements Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total ($ in millions) September 30, 2022 December 31, 2021 Assets Investments Commercial paper $ — $ 4 $ — $ 4 $ — $ — $ — $ — Foreign government bonds — 2 — 2 — 2 — 2 Publicly traded equity securities 1,081 — — 1,081 368 — — 368 1,081 6 — 1,087 368 2 — 370 Other assets (1) U.S. government and agency securities 67 — — 67 80 — — 80 Corporate notes and bonds 3 — — 3 4 — — 4 Publicly traded equity securities 253 — — 253 1,279 — — 1,279 323 — — 323 1,363 — — 1,363 Derivative assets (2) Forward exchange contracts — 945 — 945 — 351 — 351 Purchased currency options — 563 — 563 — 184 — 184 Interest rate swaps — — — — — 14 — 14 — 1,508 — 1,508 — 549 — 549 Total assets $ 1,404 $ 1,514 $ — $ 2,918 $ 1,731 $ 551 $ — $ 2,282 Liabilities Other liabilities Contingent consideration $ — $ — $ 499 $ 499 $ — $ — $ 777 $ 777 Derivative liabilities (2) Forward exchange contracts — 242 — 242 — 120 — 120 Written currency options — — — — — 1 — 1 — 242 — 242 — 121 — 121 Total liabilities $ — $ 242 $ 499 $ 741 $ — $ 121 $ 777 $ 898 (1) Investments included in other assets are restricted as to use, including for the payment of benefits under employee benefit plans. (2) The fair value determination of derivatives includes the impact of the credit risk of counterparties to the derivatives and the Company’s own credit risk, the effects of which were not significant. As of September 30, 2022 and December 31, 2021, Cash and cash equivalents included $10.0 billion and $6.8 billion of cash equivalents, respectively (which would be considered Level 2 in the fair value hierarchy). Contingent Consideration Summarized information about the changes in the fair value of liabilities for contingent consideration associated with business combinations is as follows: ($ in millions) 2022 2021 Fair value January 1 $ 777 $ 841 Changes in estimated fair value (1) (156) 73 Payments (119) — Other (3) (12) Fair value September 30 (2) $ 499 $ 902 (1) Recorded in Cost of sales, Research and development expenses, and Other (income) expense, net . Includes cumulative translation adjustments. (2) At September 30, 2022, $358 million of the liabilities relate to the 2016 termination of the Sanofi Pasteur MSD joint venture. As part of the termination, Merck recorded a liability for contingent future royalty payments of 11.5% on net sales of all Merck products that were previously sold by the joint venture through December 31, 2024. The fair value of this liability is determined utilizing the estimated amount and timing of projected cash flows using a risk-adjusted discount rate to present value the cash flows. Balance at September 30, 2022 includes $139 million recorded as a current liability for amounts expected to be paid within the next 12 months. The payments of contingent consideration in 2022 relate to the Sanofi Pasteur MSD liabilities described above. Other Fair Value Measurements Some of the Company’s financial instruments, such as cash and cash equivalents, receivables and payables, are reflected in the balance sheet at carrying value, which approximates fair value due to their short-term nature. The estimated fair value of loans payable and long-term debt (including current portion) at September 30, 2022, was $25.9 billion compared with a carrying value of $30.4 billion and at December 31, 2021, was $35.7 billion compared with a carrying value of $33.1 billion. Fair value was estimated using recent observable market prices and would be considered Level 2 in the fair value hierarchy. Concentrations of Credit Risk On an ongoing basis, the Company monitors concentrations of credit risk associated with corporate and government issuers of securities and financial institutions with which it conducts business. Credit exposure limits are established to limit a concentration with any single issuer or institution. Cash and investments are placed in instruments that meet high credit quality standards as specified in the Company’s investment policy guidelines. The majority of the Company’s accounts receivable arise from product sales in the U.S., Europe and China and are primarily due from drug wholesalers and retailers, hospitals and government agencies. The Company monitors the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in their credit profile. The Company also continues to monitor global economic conditions, including the volatility associated with international sovereign economies, and associated impacts on the financial markets and its business. The Company has accounts receivable factoring agreements with financial institutions in certain countries to sell accounts receivable. The Company factored $2.3 billion and $2.8 billion of accounts receivable as of September 30, 2022 and December 31, 2021, respectively, under these factoring arrangements, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within operating activities in the Condensed Consolidated Statement of Cash Flows. In certain of these factoring arrangements, for ease of administration, the Company will collect customer payments related to the factored receivables, which it then remits to the financial institutions. As of September 30, 2022 and December 31, 2021, the Company had collected $55 million and $62 million, respectively, on behalf of the financial institutions, which is reflected as restricted cash in Other current assets and the related obligation to remit the cash within Accrued and other current liabilities . The Company remitted the cash to the financial institutions in October 2022 and January 2022, respectively. The net cash flows related to these collections are reported as financing activities in the Condensed Consolidated Statement of Cash Flows. The cost of factoring such accounts receivable was de minimis . Derivative financial instruments are executed under International Swaps and Derivatives Association master agreements. The master agreements with several of the Company’s financial institution counterparties also include credit support annexes. These annexes contain provisions that require collateral to be exchanged depending on the value of the derivative assets and liabilities, the Company’s credit rating, and the credit rating of the counterparty. Cash collateral received by the Company from various counterparties was $794 million and $164 million at September 30, 2022 and December 31, 2021, respectively. The obligation to return such collateral is recorded in Accrued and other current liabilities |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of: ($ in millions) September 30, 2022 December 31, 2021 Finished goods $ 1,683 $ 1,747 Raw materials and work in process 6,532 6,220 Supplies 227 196 Total (approximates current cost) 8,442 8,163 Decrease to LIFO cost (187) (16) $ 8,255 $ 8,147 Recognized as: Inventories $ 5,614 $ 5,953 Other assets 2,641 2,194 Amounts recognized as Other Assets are comprised almost entirely of raw materials and work in process inventories. At September 30, 2022 and December 31, 2021, these amounts included $2.2 billion and $1.9 billion, respectively, of inventories not expected to be sold within one year. In addition, these amounts included $417 million and $256 million at September 30, 2022 and December 31, 2021, respectively, of inventories produced in preparation for product launches. |
Other Intangibles
Other Intangibles | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangibles | Other Intangibles In the third quarter of 2022, the Company recorded $887 million of impairment charges within Research and development expenses related to intangible assets obtained in connection with the 2020 acquisition of ArQule, Inc. Of this amount, $807 million represents an in-process research and development (IPR&D) impairment charge related to nemtabrutinib (MK-1026), a novel, oral BTK inhibitor currently being evaluated for the treatment of B-cell malignancies. Following discussions with regulatory authorities in the third quarter, the development period for nemtabrutinib was extended, which constituted a triggering event that required the evaluation of the nemtabrutinib intangible asset for impairment. The Company estimated the current fair value of nemtabrutinib utilizing an income approach which calculates the present value of projected future cash flows. The market participant assumptions used to derive the forecasted cash flows were updated to reflect a delay in the anticipated launch date for nemtabrutinib, which resulted in lower cumulative revenue forecasts and a reduction in the estimated fair value. The revised estimated fair value of nemtabrutinib when compared with its related carrying value resulted in the IPR&D impairment charge noted above. The remaining IPR&D intangible asset related to nemtabrutinib is $1.2 billion. If the assumptions used to estimate the fair value of nemtabrutinib prove to be incorrect and the development of nemtabrutinib does not progress as anticipated thereby adversely affecting projected future cash flows, the Company may record an additional impairment charge in the future and such charge could be material. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is involved in various claims and legal proceedings of a nature considered normal to its business, including product liability, intellectual property, and commercial litigation, as well as certain additional matters including governmental and environmental matters. In the opinion of the Company, it is unlikely that the resolution of these matters will be material to the Company’s financial condition, results of operations or cash flows. Given the nature of the litigation discussed below and the complexities involved in these matters, the Company is unable to reasonably estimate a possible loss or range of possible loss for such matters until the Company knows, among other factors, (i) what claims, if any, will survive dispositive motion practice, (ii) the extent of the claims, including the size of any potential class, particularly when damages are not specified or are indeterminate, (iii) how the discovery process will affect the litigation, (iv) the settlement posture of the other parties to the litigation and (v) any other factors that may have a material effect on the litigation. The Company records accruals for contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available. For product liability claims, a portion of the overall accrual is actuarially determined and considers such factors as past experience, number of claims reported and estimates of claims incurred but not yet reported. Individually significant contingent losses are accrued when probable and reasonably estimable. Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable. The Company’s decision to obtain insurance coverage is dependent on market conditions, including cost and availability, existing at the time such decisions are made. The Company has evaluated its risks and has determined that the cost of obtaining product liability insurance outweighs the likely benefits of the coverage that is available and, as such, has no insurance for most product liabilities. Product Liability Litigation Fosamax As previously disclosed, Merck is a defendant in product liability lawsuits in the U.S. involving Fosamax (alendronate sodium) (Fosamax Litigation). As of September 30, 2022, approximately 3,450 cases are pending against Merck in either a federal multidistrict litigation (Femur Fracture MDL) or state court. Plaintiffs in the vast majority of these cases generally allege that they sustained femur fractures and/or other bone injuries (Femur Fractures) in association with the use of Fosamax. In March 2014, the Femur Fracture MDL court dismissed with prejudice approximately 650 cases on preemption grounds. Plaintiffs in approximately 515 of those cases appealed that decision to the U.S. Court of Appeals for the Third Circuit (Third Circuit). In March 2017, the Third Circuit issued a decision reversing the Femur Fracture MDL court’s preemption ruling and remanding the appealed cases back to the Femur Fracture MDL court. In May 2019, the U.S. Supreme Court decided that the Third Circuit had incorrectly concluded that the issue of preemption should be resolved by a jury, and accordingly vacated the judgment of the Third Circuit and remanded the proceedings back to the Third Circuit to address the issue in a manner consistent with the Supreme Court’s opinion. In November 2019, the Third Circuit remanded the cases back to the District Court in order to allow that court to determine in the first instance whether the plaintiffs’ state law claims are preempted by federal law under the standards described by the Supreme Court in its opinion. On March 23, 2022, the District Court granted Merck’s motion and ruled that plaintiffs’ failure to warn claims are preempted as a matter of law to the extent they assert that Merck should have added a warning or precaution regarding atypical femur fractures prior to September 2010. Plaintiffs have indicated that they do not intend to move forward with any other claims at this point and intend to appeal the District Court’s preemption ruling to the Third Circuit. Discovery is presently stayed in the Femur Fracture MDL. As part of the spin-off of Organon, Organon is required to indemnify Merck for all liabilities relating to, arising from, or resulting from the Fosamax Litigation. Januvia/Janumet As previously disclosed, Merck is a defendant in product liability lawsuits in the U.S. involving Januvia (sitagliptin) and/or Janumet (sitagliptin and metformin HCl). Most claims were filed in multidistrict litigation before the U.S. District Court for the Southern District of California (MDL). In March 2021, the MDL court issued an omnibus order granting defendants’ summary judgment motions based on preemption and failure to establish general causation, as well as granting defendants’ motions to exclude plaintiffs’ expert witnesses. The plaintiffs appealed that order. Since that time, more than half of these claims have been dismissed with prejudice as to Merck, and in October 2021, the U.S. Court of Appeals for the Ninth Circuit dismissed the appeal as to Merck and two of its codefendants. The MDL court’s judgment is now final and no longer appealable with respect to remaining claims. Outside of the MDL, the majority of claims were filed in coordinated proceedings before the Superior Court of California, County of Los Angeles (California State Court). On April 6, 2021, the court in California issued an omnibus order granting defendants’ summary judgment motions and also granting defendants’ motions to exclude plaintiffs’ expert witnesses. On May 31, 2022, the court entered judgment in favor of Merck as to all of the claims pending against Merck in that jurisdiction. In addition to the claims noted above, the Company has agreed to toll the statute of limitations for approximately 50 additional claims. The Company intends to continue defending against any remaining lawsuits. Gardasil/Gardasil 9 Merck is a defendant in product liability lawsuits in the U.S. involving Gardasil (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant) and Gardasil 9 (Human Papillomavirus 9-valent Vaccine, Recombinant). As of September 30, 2022, approximately 65 cases were filed and pending against Merck in either federal or state court. In these actions, plaintiffs allege, among other things, that they suffered various personal injuries after vaccination with Gardasil or Gardasil 9, with postural orthostatic tachycardia syndrome as a predominate alleged injury. In August 2022, the Judicial Panel on Multidistrict Litigation ordered that Gardasil/Gardasil 9 product liability cases pending in federal courts nationwide be transferred to Judge Robert J. Conrad in the Western District of North Carolina for coordinated pre-trial proceedings. There are fewer than 15 product liability cases pending outside the U.S., including one purported class action in Colombia. Governmental Proceedings As previously disclosed, from time to time, the Company’s subsidiaries in China receive inquiries regarding their operations from various Chinese governmental agencies. Some of these inquiries may be related to matters involving other multinational pharmaceutical companies, as well as Chinese entities doing business with such companies. The Company’s policy is to cooperate with these authorities and to provide responses as appropriate. As previously disclosed, from time to time, the Company receives inquiries and is the subject of preliminary investigation activities from competition and other governmental authorities in markets outside the U.S. These authorities may include regulators, administrative authorities, and law enforcement and other similar officials, and these preliminary investigation activities may include site visits, formal or informal requests or demands for documents or materials, inquiries or interviews and similar matters. Certain of these preliminary inquiries or activities may lead to the commencement of formal proceedings. Should those proceedings be determined adversely to the Company, monetary fines and/or remedial undertakings may be required. Commercial and Other Litigation Zetia Antitrust Litigation As previously disclosed, Merck, MSD, Schering Corporation, Schering-Plough Corporation, and MSP Singapore Company LLC (collectively, the Merck Defendants) are defendants in a number of lawsuits filed in 2018 on behalf of direct and indirect purchasers of Zetia (ezetimibe) alleging violations of federal and state antitrust laws, as well as other state statutory and common law causes of action. The cases were consolidated in a federal multidistrict litigation (the Zetia MDL) before Judge Rebecca Beach Smith in the Eastern District of Virginia. In November 2019, the direct purchaser plaintiffs and the indirect purchaser plaintiffs filed motions for class certification. In August 2020, the district court granted in part the direct purchasers’ motion for class certification and certified a class of 35 direct purchasers. In August 2021, the Fourth Circuit vacated the district court’s class certification order and remanded for further proceedings consistent with the court’s ruling. In September 2021, the direct purchaser plaintiffs filed a renewed motion for class certification. On January 25, 2022, the magistrate judge recommended that the district court deny the motion for class certification. On February 8, 2022, the direct purchaser plaintiffs filed objections to the recommendation. On April 13, 2022, the district court denied the direct purchaser plaintiffs’ renewed motion for class certification. In August 2021, the district court granted certification of a class of indirect purchasers. In 2020 and 2021, United Healthcare Services, Inc., Humana Inc., Centene Corporation and others, and Kaiser Foundation Health Plan, Inc. (collectively, the Insurer Plaintiffs), each filed a lawsuit in a jurisdiction outside of the Eastern District of Virginia against the Merck Defendants and others, making similar allegations as those made in the Zetia MDL, as well as additional allegations about Vytorin. These cases have been transferred to the Eastern District of Virginia to proceed with the Zetia MDL. On February 9, 2022, the Insurer Plaintiffs filed amended complaints. On March 2, 2022, the Merck Defendants, jointly with other defendants, moved to dismiss certain aspects of the Insurer Plaintiffs’ complaints, including any claims for Vytorin damages. That motion to dismiss the Vytorin-related claims is still pending. In April 2022, the direct purchaser plaintiffs moved for an order setting a deadline for direct purchasers of Zetia not currently parties to the case to file cases against defendants in order for those cases to be coordinated for trial with the existing direct purchaser plaintiffs and other MDL plaintiff groups. The court granted that motion, setting a deadline of June 30, 2022 for unnamed direct purchasers to file claims. On June 30, 2022, 23 new entities, many related, brought new complaints against defendants or otherwise sought to intervene. On September 2, 2022, the Magistrate Judge issued a Report and Recommendation denying the Merck Defendants’ and Glenmark Defendants’ motions for summary judgment. Defendants have objected to the Report and Recommendation, and are awaiting a final decision from Judge Smith. The court has scheduled trial for all plaintiffs other than the Insurer Plaintiffs for April 2023. 340B Program Litigation Merck has filed a complaint in the U.S. District Court for the District of Columbia to challenge the letter Merck received from the Health Resources and Services Administration (HRSA) in May 2022 regarding Merck’s 340B Program integrity initiative. HRSA’s letter to Merck asserts that Merck is in violation of the 340B statute. HRSA further claims that continued failure to provide the 340B price to covered entities using contract pharmacies may result in civil monetary penalties for each instance of alleged overcharging, in addition to repayment for any instance of overcharging. The letter is very similar to letters HRSA has sent to other manufacturers, which letters have been held to be unlawful by multiple federal courts. Merck disagrees with HRSA’s assertion. Merck remains committed to the 340B Program and to providing 340B discounts to eligible covered entities. Merck’s 340B Program integrity initiative is consistent with the requirements of the 340B statute and is intended to ensure the integrity and sustainability of the 340B statute by reducing prohibited duplicate discounts and diversion and putting patients back at the center of the program. Merck continues to offer all of the Company’s covered outpatient drugs to all 340B covered entities for purchase at or below the 340B ceiling price. On September 13, 2022, the court stayed the case pending the D.C. Circuit’s ruling in Novartis Pharmaceuticals Corp. v. Johnson and United Therapeutics Corp. v. Johnson . Patent Litigation From time to time, generic manufacturers of pharmaceutical products file abbreviated New Drug Applications (NDAs) with the FDA seeking to market generic forms of the Company’s products prior to the expiration of relevant patents owned by the Company. To protect its patent rights, the Company may file patent infringement lawsuits against such generic companies. Similar lawsuits defending the Company’s patent rights may exist in other countries. The Company intends to vigorously defend its patents, which it believes are valid, against infringement by companies attempting to market products prior to the expiration of such patents. As with any litigation, there can be no assurance of the outcomes, which, if adverse, could result in significantly shortened periods of exclusivity for these products and, with respect to products acquired through acquisitions accounted for as business combinations, potentially significant intangible asset impairment charges. Bridion — As previously disclosed, between January and November 2020, the Company received multiple Paragraph IV Certification Letters under the Hatch-Waxman Act notifying the Company that generic drug companies have filed applications to the FDA seeking pre-patent expiry approval to sell generic versions of Bridion (sugammadex) Injection. In March, April and December 2020, the Company filed patent infringement lawsuits in the U.S. District Courts for the District of New Jersey and the Northern District of West Virginia against those generic companies. All actions in the District of New Jersey have been consolidated. These lawsuits, which assert one or more patents covering sugammadex and methods of using sugammadex, automatically stay FDA approval of the generic applications until June 2023 or until adverse court decisions, if any, whichever may occur earlier. The West Virginia case was jointly dismissed with prejudice on August 8, 2022 in favor of proceeding in New Jersey. The remaining defendants in the New Jersey action have stipulated to infringement of the asserted claims and have stated they are withdrawing all remaining claims and defenses other than a defense seeking to shorten the patent term extension of the sugammadex patent to December 2022. In light of this, the U.S. District Court for the District of New Jersey cancelled the scheduled trial and scheduled a one The Company has settled with five generic companies providing that these generic companies can bring their generic versions of Bridion to the market in January 2026 (which may be delayed by any applicable pediatric exclusivity) or earlier under certain circumstances. The Company has agreed to stay the lawsuit filed against two generic companies, which in exchange agreed to be bound by a judgment on the merits of the consolidated action in the District of New Jersey. One of the generic companies in the consolidated action requested dismissal of the action against it and the Company did not oppose this request, which was subsequently granted by the court. The Company does not expect this company to bring its generic version of Bridion to the market before January 2026 or later, depending on any applicable pediatric exclusivity, unless the Company receives an adverse court decision. Januvia, Janumet, Janumet XR — As previously disclosed, the FDA has granted pediatric exclusivity with respect to Januvia , Janumet , and Janumet XR (sitagliptin and metformin HCl extended-release), which provides a further six months of exclusivity in the U.S. beyond the expiration of all patents listed in the FDA’s Orange Book. Adding this exclusivity to the term of the key patent protection extends exclusivity on these products to January 2023. However, Januvia , Janumet , and Janumet XR contain sitagliptin phosphate monohydrate and the Company has another patent covering certain phosphate salt and polymorphic forms of sitagliptin that expires in May 2027, including pediatric exclusivity (2027 salt/polymorph patent). In 2019, Par Pharmaceutical filed suit against the Company in the U.S. District Court for the District of New Jersey, seeking a declaratory judgment of invalidity of the 2027 salt/polymorph patent. In response, the Company filed a patent infringement lawsuit in the U.S. District Court for the District of Delaware against Par Pharmaceutical and additional companies that also indicated an intent to market generic versions of Januvia , Janumet , and Janumet XR following expiration of key patent protection, but prior to the expiration of the 2027 salt/polymorph patent, and a later granted patent owned by the Company covering the Janumet formulation where its term plus the pediatric exclusivity ends in 2029. The Company also filed a patent infringement lawsuit against Mylan in the Northern District of West Virginia. The Judicial Panel on Multidistrict Litigation entered an order transferring the Company’s lawsuit against Mylan to the U.S. District Court for the District of Delaware for coordinated and consolidated pretrial proceedings with the other cases pending in that district. Prior to the beginning of the scheduled October 2021 trial in the U.S. District Court for the District of Delaware on invalidity issues, the Company settled with all defendants scheduled to participate in that trial. In the Company’s case against Mylan, a bench trial was held in December 2021 in the U.S. District Court for the Northern District of West Virginia, and the closing arguments were held on April 13, 2022. On September 21, 2022, the District Court for the Northern District of West Virginia issued a decision in the Company’s favor, upholding all asserted patent claims. Mylan (now Viatris) has appealed to the U.S. Court of Appeals for the Federal Circuit. In total, the Company has settled with 22 generic companies providing that these generic companies can bring their generic versions of Januvia and Janumet to the market in May 2026 or earlier under certain circumstances, and their generic versions of Janumet XR to the market in July 2026 or earlier under certain circumstances. Additionally, in 2019, Mylan filed a petition for inter partes review (IPR) at the U.S. Patent and Trademark Office (USPTO) seeking invalidity of some, but not all, of the claims of the 2027 salt/polymorph patent. The USPTO instituted IPR proceedings in May 2020, finding a reasonable likelihood that the challenged claims are not valid. A trial was held in February 2021 and a final decision was rendered in May 2021, holding that all of the challenged claims were not invalid. Mylan appealed the USPTO’s decision to the U.S. Court of Appeals for the Federal Circuit, and a hearing was held on August 2, 2022. On September 29, 2022, the Court of Appeals for the Federal Circuit ruled in the Company’s favor, upholding the USPTO’s decision. In March 2021, the Company filed a patent infringement lawsuit in the U.S. District Court for the District of Delaware against Zydus Worldwide DMCC, Zydus Pharmaceuticals (USA) Inc., and Cadila Healthcare Ltd. (collectively, Zydus). In that lawsuit, the Company alleged infringement of the 2027 salt/polymorph patent based on the filing of Zydus’s application seeking approval of its sitagliptin tablets. While the U.S. District Court for the District of Delaware originally set a three-day bench trial in this matter beginning on October 31, 2022, the trial date has been moved to January 9, 2023. Generic companies have sought revocation of the Supplementary Protection Certificate (SPC) for Janumet in a number of European countries. In February 2022, a Finnish court referred certain questions to the Court of Justice of the European Union that could determine the validity of the Janumet SPCs in Europe. In June 2021, a German court decided that the SPC for Janumet is invalid, which decision the Company has appealed. The validity of the Janumet SPC was upheld in the Czech Republic in March 2022 in a first instance decision, which has been appealed. In June 2022, a Romanian court decided that the SPC for Janumet was invalid in a first instance decision. In August 2022, the validity of the SPC for Janumet was upheld in Sweden in a first instance decision, which decision has been appealed. MSD has filed injunction actions against generic companies in Belgium, Finland, France, Greece, Ireland and Portugal. In September 2022, the following decisions were issued: ex-parte preliminary injunctions were granted in Finland; a preliminary injunction was granted in France, and the validity of the SPC and the associated patent were held to be prima facie valid in these proceedings; and a temporary restraining order was granted in Greece. In October 2022, requests for ex parte preliminary injunctions were refused in Portugal. Other Litigation There are various other pending legal proceedings involving the Company, principally product liability and intellectual property lawsuits. While it is not feasible to predict the outcome of such proceedings, in the opinion of the Company, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to the Company’s financial condition, results of operations or cash flows either individually or in the aggregate. Legal Defense Reserves Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable. Some of the significant factors considered in the review of these legal defense reserves are as follows: the actual costs incurred by the Company; the development of the Company’s legal defense strategy and structure in light of the scope of its litigation; the number of cases being brought against the Company; the costs and outcomes of completed trials and the most current information regarding anticipated timing, progression, and related costs of pre-trial activities and trials in the associated litigation. The amount of legal defense reserves as of September 30, 2022 and December 31, 2021 of approximately $230 million represents the Company’s best estimate of the minimum amount of defense costs to be incurred in connection with its outstanding litigation; however, events such as additional trials and other events that could arise in the course of its litigation could affect the ultimate amount of legal defense costs to be incurred by the Company. The Company will continue to monitor its legal defense costs and review the adequacy of the associated reserves and may determine to increase the reserves at any time in the future if, based upon the factors set forth, it believes it would be appropriate to do so. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Equity | Equity Three Months Ended September 30, Common Stock Other Retained Accumulated Treasury Stock Non- Total ($ and shares in millions except per share amounts) Shares Par Value Shares Cost Balance at July 1, 2021 3,577 $ 1,788 $ 44,039 $ 48,777 $ (4,628) 1,044 $ (56,682) $ 94 $ 33,388 Net income attributable to Merck & Co., Inc. — — — 4,567 — — — — 4,567 Other comprehensive income, net of taxes — — — — 38 — — — 38 Cash dividends declared on common stock ($0.65 per share) — — — (1,653) — — — — (1,653) Treasury stock shares purchased — — — — — 8 (583) — (583) Share-based compensation plans and other — — 110 — — — 21 — 131 Net income attributable to noncontrolling interests — — — — — — — 4 4 Distributions attributable to noncontrolling interests — — — — — — — (29) (29) Balance at September 30, 2021 3,577 $ 1,788 $ 44,149 $ 51,691 $ (4,590) 1,052 $ (57,244) $ 69 $ 35,863 Balance at July 1, 2022 3,577 $ 1,788 $ 44,115 $ 58,437 $ (4,327) 1,044 $ (56,770) $ 75 $ 43,318 Net income attributable to Merck & Co., Inc. — — — 3,248 — — — — 3,248 Other comprehensive loss, net of taxes — — — — (416) — — — (416) Cash dividends declared on common stock ($0.69 per share) — — — (1,757) — — — — (1,757) Share-based compensation plans and other — — 128 — — — 12 — 140 Net income attributable to noncontrolling interests — — — — — — — 5 5 Distributions attributable to noncontrolling interests — — — — — — — (14) (14) Balance at September 30, 2022 3,577 $ 1,788 $ 44,243 $ 59,928 $ (4,743) 1,044 $ (56,758) $ 66 $ 44,524 Nine Months Ended September 30, Common Stock Other Retained Accumulated Treasury Stock Non- Total ($ and shares in millions except per share amounts) Shares Par Value Shares Cost Balance at January 1, 2021 3,577 $ 1,788 $ 39,588 $ 47,362 $ (6,634) 1,047 $ (56,787) $ 87 $ 25,404 Net income attributable to Merck & Co., Inc. — — — 9,291 — — — — 9,291 Other comprehensive income, net of taxes — — — — 1,595 — — — 1,595 Cash dividends declared on common stock ($1.95 per share) — — — (4,962) — — — — (4,962) Treasury stock shares purchased — — — — — 11 (822) — (822) Spin-off of Organon & Co. — — 4,643 — 449 — — (1) 5,091 Share-based compensation plans and other — — (82) — — (6) 365 — 283 Net income attributable to noncontrolling interests — — — — — — — 12 12 Distributions attributable to noncontrolling interests — — — — — — — (29) (29) Balance at September 30, 2021 3,577 $ 1,788 $ 44,149 $ 51,691 $ (4,590) 1,052 $ (57,244) $ 69 $ 35,863 Balance at January 1, 2022 3,577 $ 1,788 $ 44,238 $ 53,696 $ (4,429) 1,049 $ (57,109) $ 73 $ 38,257 Net income attributable to Merck & Co., Inc. — — — 11,502 — — — — 11,502 Other comprehensive loss, net of taxes — — — — (314) — — — (314) Cash dividends declared on common stock ($2.07 per share) — — — (5,270) — — — — (5,270) Share-based compensation plans and other — — 5 — — (5) 351 — 356 Net income attributable to noncontrolling interests — — — — — — — 6 6 Distributions attributable to noncontrolling interests — — — — — — — (13) (13) Balance at September 30, 2022 3,577 $ 1,788 $ 44,243 $ 59,928 $ (4,743) 1,044 $ (56,758) $ 66 $ 44,524 |
Pension and Other Postretiremen
Pension and Other Postretirement Benefit Plans | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefit Plans | The Company has defined benefit pension plans covering eligible employees in the U.S. and in certain of its international subsidiaries. The net periodic benefit cost of such plans (including certain costs reported as part of discontinued operations in the first nine months of 2021) consisted of the following components: Three Months Ended Nine Months Ended 2022 2021 2022 2021 ($ in millions) U.S. International U.S. International U.S. International U.S. International Service cost $ 91 $ 66 $ 104 $ 75 $ 289 $ 213 $ 302 $ 254 Interest cost 123 35 102 33 330 110 305 92 Expected return on plan assets (182) (93) (188) (105) (576) (292) (568) (313) Amortization of unrecognized prior service credit (8) (3) (9) (3) (24) (10) (29) (12) Net loss amortization 10 24 75 32 122 73 218 110 Termination benefits 1 — 2 — 2 1 54 3 Curtailments 3 — (1) — 11 — 15 (27) Settlements 79 — 139 — 180 — 139 2 $ 117 $ 29 $ 224 $ 32 $ 334 $ 95 $ 436 $ 109 The Company provides medical benefits, principally to its eligible U.S. retirees and similar benefits to their dependents, through its other postretirement benefit plans. The net credit of such plans consisted of the following components: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Service cost $ 11 $ 11 $ 36 $ 37 Interest cost 11 12 34 34 Expected return on plan assets (21) (20) (64) (59) Amortization of unrecognized prior service credit (14) (16) (42) (48) Net gain amortization (11) (12) (32) (30) Termination benefits — — — 37 Curtailments — (1) (1) (29) $ (24) $ (26) $ (69) $ (58) Net periodic benefit cost (credit) for pension and other postretirement benefit plans in the first nine months of 2021 includes expenses for curtailments, settlements and termination benefits provided to certain employees in connection with the spin-off of Organon. In connection with restructuring actions (see Note 5), termination charges were recorded on pension plans related to expanded eligibility for certain employees e x iting Merck. Also, in connection with these restructuring activities, curtailments and settlements were recorded on certain pension plans. In addition, lump sum payments to U.S. pension plan participants triggered partial settlement charges in the third quarter and first nine months of 2022 and 2021. These partial settlements triggered remeasurements of some of the Company’s U.S. pension plans. The third quarter 2022 remeasurement, which was calculated using discount rates and asset values as of September 30, 2022, resulted in a net increase of $296 million to net pension liabilities and also resulted in a related adjustment to AOCL . Remeasurements during the first nine months of 2022 have resulted in a net increase of $131 million to net pension liabilities with related adjustments to AOCL. The components of net periodic benefit cost (credit) other than the service cost component are included in Other (income) expense, net (see Note 12), with the exception of certain amounts for termination benefits, curtailments and settlements, which are recorded in Restructuring costs if the event giving rise to the termination benefits, curtailment or settlement is related to restructuring actions or in Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests if related to the spin-off of Organon (each as noted above). |
Other (Income) Expense, Net
Other (Income) Expense, Net | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other (Income) Expense, Net | Other (Income) Expense, Net Other (income) expense, net, consisted of: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Interest income $ (40) $ (7) $ (62) $ (27) Interest expense 244 196 727 597 Exchange losses 96 46 220 202 Loss (income) from investments in equity securities, net (1) 371 (683) 1,361 (1,535) Net periodic defined benefit plan (credit) cost other than service cost (60) 40 (208) (159) Other, net (182) (42) (462) (85) $ 429 $ (450) $ 1,576 $ (1,007) (1) Includes net realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds. Unrealized gains and losses from investments that are directly owned are determined at the end of the reporting period, while gains and losses from ownership interests in investment funds are accounted for on a one quarter lag. Interest paid for the nine months ended September 30, 2022 and 2021 was $660 million and $570 million, respectively. |
Taxes on Income
Taxes on Income | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Taxes on Income | Taxes on Income The effective income tax rates from continuing operations were 9.2% and 13.2% for the third quarter of 2022 and 2021, respectively, and 11.0% and 14.4% for the first nine months of 2022 and 2021, respectively. The effective income tax rates from continuing operations reflect the beneficial impact of foreign earnings. The effective income tax rates from continuing operations in the third quarter and first nine months of 2022 also include the favorable impact of net unrealized losses from investments in equity securities and intangible asset impairment charges, which were taxed at the U.S. tax rate. The effective income tax rate from continuing operations in the first nine months of 2021 reflects the unfavorable effect of a charge for the acquisition of Pandion for which no tax benefit was recognized, as well as a net tax benefit of $207 million related to the settlement of certain federal income tax matters as discussed below. In the first quarter of 2021, the Internal Revenue Service (IRS) concluded its examinations of Merck’s 2015-2016 U.S. federal income tax returns. As a result, the Company was required to make a payment of $190 million (of which $172 million related to continuing operations and $18 million related to discontinued operations). The Company’s reserves for unrecognized tax benefits for the years under examination exceeded the adjustments relating to this examination period and therefore the Company recorded a $236 million net tax benefit in the first nine months of 2021 (of which $207 million related to continuing operations and $29 million related to discontinued operations). This net benefit reflects reductions in reserves for unrecognized tax benefits and other related liabilities for tax positions relating to the years that were under examination. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The calculations of earnings per share are as follows: Three Months Ended Nine Months Ended ($ and shares in millions except per share amounts) 2022 2021 2022 2021 Net Income from Continuing Operations Attributable to Merck & Co., Inc. $ 3,248 $ 4,567 $ 11,502 $ 8,525 Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests — — — 766 Net Income Attributable to Merck & Co., Inc. $ 3,248 $ 4,567 $ 11,502 $ 9,291 Average common shares outstanding 2,533 2,530 2,531 2,531 Common shares issuable (1) 9 6 9 8 Average common shares outstanding assuming dilution 2,542 2,536 2,540 2,539 Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders: Income from Continuing Operations $ 1.28 $ 1.81 $ 4.55 $ 3.37 Income from Discontinued Operations — — — 0.30 Net Income $ 1.28 $ 1.81 $ 4.55 $ 3.67 Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders: Income from Continuing Operations $ 1.28 $ 1.80 $ 4.53 $ 3.36 Income from Discontinued Operations — — — 0.30 Net Income $ 1.28 $ 1.80 $ 4.53 $ 3.66 (1) Issuable primarily under share-based compensation plans. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Changes in each component of other comprehensive income (loss) are as follows: Three Months Ended September 30, ($ in millions) Derivatives Employee Foreign Currency Accumulated Other Balance July 1, 2021, net of taxes $ (26) $ (3,028) $ (1,574) $ (4,628) Other comprehensive income (loss) before reclassification adjustments, pretax 72 (24) (96) (48) Tax (16) 16 12 12 Other comprehensive income (loss) before reclassification adjustments, net of taxes 56 (8) (84) (36) Reclassification adjustments, pretax 36 (1) 68 (2) — 104 Tax (8) (22) — (30) Reclassification adjustments, net of taxes 28 46 — 74 Other comprehensive income (loss), net of taxes 84 38 (84) 38 Balance September 30, 2021, net of taxes $ 58 $ (2,990) $ (1,658) $ (4,590) Balance July 1, 2022, net of taxes $ 390 $ (2,465) $ (2,252) $ (4,327) Other comprehensive income (loss) before reclassification adjustments, pretax 682 (294) (618) (230) Tax (143) 62 50 (31) Other comprehensive income (loss) before reclassification adjustments, net of taxes 539 (232) (568) (261) Reclassification adjustments, pretax (254) (1) 77 (2) — (177) Tax 53 (31) — 22 Reclassification adjustments, net of taxes (201) 46 — (155) Other comprehensive income (loss), net of taxes 338 (186) (568) (416) Balance September 30, 2022, net of taxes $ 728 $ (2,651) $ (2,820) $ (4,743) Nine Months Ended September 30, ($ in millions) Derivatives Employee Foreign Currency Accumulated Other Balance January 1, 2021, net of taxes $ (266) $ (4,540) $ (1,828) $ (6,634) Other comprehensive income (loss) before reclassification adjustments, pretax 193 1,739 (167) 1,765 Tax (41) (385) (84) (510) Other comprehensive income (loss) before reclassification adjustments, net of taxes 152 1,354 (251) 1,255 Reclassification adjustments, pretax 218 (1) 210 (2) — 428 Tax (46) (42) — (88) Reclassification adjustments, net of taxes 172 168 — 340 Other comprehensive income (loss), net of taxes 324 1,522 (251) 1,595 Spin-off of Organon (see Note 2) — 28 421 449 Balance September 30, 2021, net of taxes $ 58 $ (2,990) $ (1,658) $ (4,590) Balance January 1, 2022, net of taxes $ 144 $ (2,743) $ (1,830) $ (4,429) Other comprehensive income (loss) before reclassification adjustments, pretax 1,233 (125) (1,001) 107 Tax (259) 25 11 (223) Other comprehensive income (loss) before reclassification adjustments, net of taxes 974 (100) (990) (116) Reclassification adjustments, pretax (493) (1) 266 (2) — (227) Tax 103 (74) — 29 Reclassification adjustments, net of taxes (390) 192 — (198) Other comprehensive income (loss), net of taxes 584 92 (990) (314) Balance September 30, 2022, net of taxes $ 728 $ (2,651) $ (2,820) $ (4,743) (1) Primarily relates to foreign currency cash flow hedges that were reclassified from AOCL to Sales . (2) Includes net amortization of prior service cost and actuarial gains and losses included in net periodic benefit cost (see Note 11). |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company’s operations are principally managed on a product basis and include two operating segments, which are the Pharmaceutical and Animal Health segments, 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, physician 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 and animal producers. Sales of the Company’s products were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 ($ in millions) U.S. Int’l Total U.S. Int’l Total U.S. Int’l Total U.S. Int’l Total Pharmaceutical: Oncology Keytruda $ 3,331 $ 2,095 $ 5,426 $ 2,580 $ 1,954 $ 4,534 $ 9,307 $ 6,180 $ 15,487 $ 7,108 $ 5,501 $ 12,609 Alliance revenue-Lynparza (1) 144 140 284 129 117 246 427 397 825 371 350 721 Alliance revenue-Lenvima (1) 142 60 202 114 74 188 426 235 660 287 211 498 Alliance revenue-Reblozyl (2) 32 7 39 — — — 87 37 124 — — — Vaccines Gardasil/Gardasil 9 957 1,337 2,294 839 1,154 1,993 1,803 3,624 5,428 1,605 2,539 4,144 ProQuad/M-M-R II /Varivax 532 136 668 537 125 661 1,337 379 1,716 1,255 371 1,626 RotaTeq 154 102 256 135 92 227 427 218 644 364 229 593 Pneumovax 23 68 63 131 181 97 277 280 177 457 354 247 600 Vaqta 27 36 64 32 16 48 72 62 134 80 58 138 Hospital Acute Care Bridion 233 190 423 181 188 369 665 579 1,244 545 551 1,096 Prevymis 49 64 114 39 57 96 136 174 310 111 159 270 Dificid 72 6 77 52 2 54 184 12 196 108 7 115 Primaxin — 63 63 — 69 70 1 185 185 — 194 194 Noxafil 13 49 62 19 45 64 39 141 180 48 149 197 Invanz 2 48 50 (2) 55 53 4 144 148 (2) 159 157 Cancidas 1 42 43 1 56 56 5 133 138 4 164 168 Zerbaxa 24 19 43 (1) (1) (2) 64 55 120 (5) (6) (11) Cardiovascular Alliance revenue-Adempas/Verquvo (3) 85 3 88 73 27 100 244 14 258 222 26 248 Adempas — 57 57 — 59 59 — 181 181 — 188 188 Virology Lagevrio — 436 436 — — — 1,523 3,336 4,859 — — — Isentress/Isentress HD 68 93 161 77 112 189 196 270 466 222 368 590 Neuroscience Belsomra 20 42 62 23 58 81 60 139 199 56 183 238 Immunology Simponi — 173 173 — 203 203 — 540 540 — 619 619 Remicade — 49 49 — 73 73 — 163 163 — 233 233 Diabetes Januvia 332 385 717 365 487 852 958 1,294 2,252 997 1,448 2,445 Janumet 90 327 417 86 401 487 258 1,089 1,347 244 1,205 1,449 Other pharmaceutical (4) 244 321 564 210 306 518 616 949 1,565 637 950 1,589 Total Pharmaceutical segment sales 6,620 6,343 12,963 5,670 5,826 11,496 19,119 20,707 39,826 14,611 16,103 30,714 Animal Health: Livestock 186 643 829 190 675 864 521 1,965 2,486 508 1,996 2,503 Companion Animals 289 253 542 277 276 553 904 929 1,834 855 948 1,804 Total Animal Health segment sales 475 896 1,371 467 951 1,417 1,425 2,894 4,320 1,363 2,944 4,307 Total segment sales 7,095 7,239 14,334 6,137 6,777 12,913 20,544 23,601 44,146 15,974 19,047 35,021 Other (5) 227 398 625 139 101 241 383 925 1,307 192 (30) 162 $ 7,322 $ 7,637 $ 14,959 $ 6,276 $ 6,878 $ 13,154 $ 20,927 $ 24,526 $ 45,453 $ 16,166 $ 19,017 $ 35,183 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 4). (2) Alliance revenue for Reblozyl represents royalties and, for the year-to-date period, a payment received related to the achievement of a regulatory milestone (see Note 4). (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 4). (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, as well as revenue from third-party manufacturing arrangements (including sales to Organon). Other for the nine months ended September 30, 2022 and 2021 also includes $156 million and $191 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 $3.1 billion for the three months ended September 30, 2022 and 2021, respectively, and $9.1 billion for both the nine months ended September 30, 2022 and 2021. Consolidated sales by geographic area where derived are as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 United States $ 7,322 $ 6,276 $ 20,927 $ 16,166 Europe, Middle East and Africa 3,286 3,342 11,228 9,912 China 1,442 1,307 3,957 3,004 Japan 673 638 2,776 1,929 Asia Pacific (other than China and Japan) 854 613 2,792 1,782 Latin America 684 599 1,933 1,631 Other 698 379 1,840 759 $ 14,959 $ 13,154 $ 45,453 $ 35,183 A reconciliation of segment profits to Income from Continuing Operations Before Taxes is as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Segment profits: Pharmaceutical segment $ 9,590 $ 8,606 $ 28,263 $ 22,450 Animal Health segment 515 505 1,672 1,629 Total segment profits 10,105 9,111 29,935 24,079 Other profits 377 141 831 29 Unallocated: Interest income 40 7 62 27 Interest expense (244) (196) (727) (597) Amortization (460) (360) (1,623) (1,231) Depreciation (448) (358) (1,257) (1,031) Research and development (4,277) (2,312) (9,374) (8,775) Restructuring costs (94) (107) (288) (487) Other unallocated, net (1,416) (660) (4,628) (2,044) $ 3,583 $ 5,266 $ 12,931 $ 9,970 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 in Merck Research Laboratories, the Company’s research and development division that focuses on human health-related activities, or general and administrative expenses, 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 purchase accounting adjustments are not allocated to segments. Other profits are primarily comprised of miscellaneous corporate profits, as well as operating profits related to third-party manufacturing arrangements. Other unallocated, net, includes expenses from corporate and manufacturing cost centers, goodwill and other 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. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying unaudited condensed consolidated financial statements of Merck & Co., Inc. (Merck or the Company) have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by accounting principles generally accepted in the United States (U.S.) (GAAP) for complete consolidated financial statements are not included herein. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Merck’s Form 10-K filed on February 25, 2022. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. In the Company’s opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. |
Recently Adopted Accounting Standards and Recently Issued Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards In August 2020, the Financial Accounting Standards Board (FASB) issued amended guidance on the accounting for convertible instruments and contracts in an entity’s own equity. The guidance removes the separation model for convertible debt instruments and preferred stock, amends requirements for conversion options to be classified in equity as well as amends diluted earnings per share (EPS) calculations for certain convertible debt instruments. The Company adopted the new guidance on January 1, 2022 using a modified retrospective approach. There was no impact to the Company’s consolidated financial statements upon adoption. In November 2021, the FASB issued new guidance to increase the transparency of transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The guidance requires annual disclosures of such transactions to include the nature of the transactions and the significant terms and conditions, the accounting treatment and the impact to a company’s financial statements. The Company adopted the new guidance on January 1, 2022 on a prospective basis. There was no material impact to the Company’s consolidated financial statements upon adoption. In March 2020, the FASB issued optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and subsequently issued clarifying amendments. The guidance provides optional expedients and exceptions for accounting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The Company adopted the optional guidance on July 1, 2022 on a prospective basis. There was no material impact to the Company’s consolidated financial statements upon adoption. Recently Issued Accounting Standards Not Yet Adopted In October 2021, the FASB issued amended guidance that requires acquiring entities to recognize and measure contract assets and liabilities in a business combination in accordance with existing revenue recognition guidance. The amended guidance is effective for interim and annual periods in 2023 and is to be applied prospectively. Early adoption is permitted on a retrospective basis to the beginning of the fiscal year of adoption. The adoption of this guidance will not have an impact on the Company’s consolidated financial statements for prior acquisitions; however, the impact in future periods will be dependent upon the contract assets and contract liabilities acquired in future business combinations. |
Legal Costs | Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable. |
Spin-Off of Organon & Co. (Tabl
Spin-Off of Organon & Co. (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | Details of Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests are as follows: Nine Months Ended September 30, ($ in millions) 2021 (1) Sales $ 2,512 Costs, Expenses and Other Cost of sales 789 Selling, general and administrative 877 Research and development 103 Restructuring costs 1 Other (income) expense, net (15) 1,755 Income from discontinued operations before taxes 757 Income tax benefit (12) Income from discontinued operations, net of taxes 769 Less: Income of discontinued operations attributable to noncontrolling interests 3 $ 766 (1) Reflects amounts through the June 2, 2021 spin-off date. |
Collaborative Arrangements (Tab
Collaborative Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Collaborative Arrangements [Abstract] | |
Collaboration Arrangements | Summarized financial information related to this collaboration is as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Alliance revenue - Lynparza $ 284 $ 246 $ 825 $ 721 Alliance revenue - Koselugo 10 6 43 20 Total alliance revenue $ 294 $ 252 $ 868 $ 741 Cost of sales (1) 64 42 425 125 Selling, general and administrative 45 44 135 127 Research and development 28 27 79 87 ($ in millions) September 30, 2022 December 31, 2021 Receivables from AstraZeneca included in Other current assets $ 290 $ 271 Payables to AstraZeneca included in Trade accounts payable and Accrued and other current liabilities (2) 12 415 Payables to AstraZeneca included in Other Noncurrent Liabilities (2) 600 — (1) Represents amortization of capitalized milestone payments. Amount in the first nine months of 2022 includes $250 million of cumulative amortization catch-up expense as noted above. (2) Includes accrued milestone payments. Summarized financial information related to this collaboration is as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Alliance revenue - Lenvima $ 202 $ 188 $ 660 $ 498 Cost of sales (1) 53 49 159 143 Selling, general and administrative 42 34 115 88 Research and development 24 43 128 165 ($ in millions) September 30, 2022 December 31, 2021 Receivables from Eisai included in Other current assets $ 202 $ 200 Payables to Eisai included in Accrued and other current liabilities (2) 1 625 (1) Represents amortization of capitalized milestone payments. (2) Amount as of December 31, 2021 includes accrued milestone payments. Summarized financial information related to this collaboration is as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Alliance revenue - Adempas/Verquvo $ 88 $ 100 $ 258 $ 248 Net sales of Adempas recorded by Merck 57 59 181 188 Net sales of Verquvo recorded by Merck 6 2 15 3 Total sales $ 151 $ 161 $ 454 $ 439 Cost of sales (1) 55 53 158 328 Selling, general and administrative 42 31 107 84 Research and development 18 16 52 36 ($ in millions) September 30, 2022 December 31, 2021 Receivables from Bayer included in Other current assets $ 144 $ 114 Payables to Bayer included in Accrued and other current liabilities (2) 75 472 (1) Includes amortization of intangible assets. Amount in the first nine months of 2021 includes $153 million of cumulative amortization catch-up expense. In addition, cost of sales includes Bayer’s share of profits from sales in Merck’s marketing territories. (2) Amount as of December 31, 2021 includes accrued milestone payment. Summarized financial information related to this collaboration is as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Lagevrio sales $ 436 $ — $ 4,859 $ — Cost of sales (1) 234 4 2,580 56 Selling, general and administrative 41 6 105 13 Research and development 8 58 29 167 ($ in millions) September 30, 2022 December 31, 2021 Payables to Ridgeback included in Accrued and other current liabilities (2) $ 193 $ 283 (1) Includes royalty expense and amortization of capitalized milestone payments. (2) Includes accrued royalty and milestone payments. |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Charges Related to Restructuring Program Activities by Type of Cost | The following tables summarize the charges related to restructuring program activities by type of cost: Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 ($ in millions) Separation Accelerated Other Total Separation Accelerated Other Total Cost of sales $ — $ 16 $ 38 $ 54 $ — $ 51 $ 116 $ 167 Selling, general and administrative — 5 21 26 — 17 57 74 Research and development — — 1 1 — 29 1 30 Restructuring costs 65 — 29 94 197 — 91 288 $ 65 $ 21 $ 89 $ 175 $ 197 $ 97 $ 265 $ 559 Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 ($ in millions) Separation Accelerated Other Total Separation Accelerated Other Total Cost of sales $ — $ 11 $ 37 $ 48 $ — $ 32 $ 81 $ 113 Selling, general and administrative — 4 1 5 — 8 1 9 Research and development — 7 1 8 — 20 1 21 Restructuring costs 17 — 90 107 310 — 177 487 $ 17 $ 22 $ 129 $ 168 $ 310 $ 60 $ 260 $ 630 |
Charges and Spending Relating to Restructuring Activities by Program | The following table summarizes the charges and spending relating to restructuring program activities for the nine months ended September 30, 2022: ($ in millions) Separation Accelerated Other Total Restructuring reserves January 1, 2022 $ 596 $ — $ 41 $ 637 Expense 197 97 265 559 (Payments) receipts, net (303) — (458) (761) Non-cash activity — (97) 183 86 Restructuring reserves September 30, 2022 (1) $ 490 $ — $ 31 $ 521 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Effect of Net Investment Hedges on OCI and the Consolidated Statement of Income | The effects of the Company’s net investment hedges on OCI and the Consolidated Statement of Income are shown below: Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income (1) Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30, ($ in millions) 2022 2021 2022 2021 2022 2021 2022 2021 Net Investment Hedging Relationships Foreign exchange contracts $ (1) $ 1 $ (47) $ (27) $ — $ (4) $ (2) $ (12) Euro-denominated notes (250) (77) (431) (199) — — — — (1) No amounts were reclassified from AOCL into income related to the sale of a subsidiary. |
Amounts Recorded on Balance Sheet Related to Fair Value Hedges | The table below presents the location of amounts recorded in the Condensed Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Increase (Decrease) Included in the Carrying Amount ($ in millions) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Balance Sheet Line Item in which Hedged Item is Included Loans payable and current portion of long-term debt $ — $ 2,263 $ — $ 13 |
Fair Value of Derivatives on a Gross Basis Segregated between those Derivatives that are Designated as Hedging Instruments and those that are Not Designated as Hedging Instruments | Presented in the table below is the fair value of derivatives on a gross basis segregated between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments: September 30, 2022 December 31, 2021 Fair Value of Derivative U.S. Dollar Fair Value of Derivative U.S. Dollar ($ in millions) Asset Liability Asset Liability Derivatives Designated as Hedging Instruments Balance Sheet Caption Interest rate swap contracts Other current assets $ — $ — $ — $ 14 $ — $ 2,250 Foreign exchange contracts Other current assets 826 — 7,250 271 — 6,778 Foreign exchange contracts Other Assets 85 — 1,408 43 — 1,551 Foreign exchange contracts Accrued and other current liabilities — 1 37 — 24 1,623 Foreign exchange contracts Other Noncurrent Liabilities — 1 93 — 1 43 $ 911 $ 2 $ 8,788 $ 328 $ 25 $ 12,245 Derivatives Not Designated as Hedging Instruments Balance Sheet Caption Foreign exchange contracts Other current assets $ 597 $ — $ 9,523 $ 221 $ — $ 10,073 Foreign exchange contracts Accrued and other current liabilities — 240 7,715 — 96 10,640 $ 597 $ 240 $ 17,238 $ 221 $ 96 $ 20,713 $ 1,508 $ 242 $ 26,026 $ 549 $ 121 $ 32,958 |
Information on Derivative Positions Subject to Master Netting Arrangements as if they were Presented on a Net Basis | The following table provides information on the Company’s derivative positions subject to these master netting arrangements as if they were presented on a net basis, allowing for the right of offset by counterparty and cash collateral exchanged per the master agreements and related credit support annexes: September 30, 2022 December 31, 2021 ($ in millions) Asset Liability Asset Liability Gross amounts recognized in the condensed consolidated balance sheet $ 1,508 $ 242 $ 549 $ 121 Gross amounts subject to offset in master netting arrangements not offset in the condensed consolidated balance sheet (217) (217) (110) (110) Cash collateral received (794) — (164) — Net amounts $ 497 $ 25 $ 275 $ 11 |
Location and Amount of Pretax Gains and Losses of Derivatives | The table below provides information regarding the location and amount of pretax gains and losses of derivatives designated in fair value or cash flow hedging relationships: Three Months Ended September 30, Nine Months Ended September 30, ($ in millions) 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Financial Statement Line Items in which Effects of Fair Value or Cash Flow Hedges are Recorded Sales Other (income) expense, net (1) Other comprehensive income (loss) Sales Other (income) expense, net (1) Other comprehensive income (loss) $ 14,959 $ 13,154 $ 429 $ (450) $ (416) $ 38 $ 45,453 $ 35,183 $ 1,576 $ (1,007) $ (314) $ 1,595 (Gain) loss on fair value hedging relationships Interest rate swap contracts Hedged items — — 1 (9) — — — — (13) (29) — — Derivatives designated as hedging instruments — — — (1) — — — — 4 (1) — — Impact of cash flow hedging relationships Foreign exchange contracts Amount of gain recognized in OCI on derivatives — — — — 682 72 — — — — 1,233 193 Increase (decrease) in Sales as a result of AOCL reclassifications 253 (36) — — (253) 36 491 (219) — — (491) 219 Interest rate contracts Amount of gain recognized in Other (income) expense, net on derivatives — — (1) — — — — — (2) (2) — — Amount of loss recognized in OCI on derivatives — — — — (1) — — — — — (2) (2) (1) Interest expense is a component of Other (income) expense, net. |
Income Statement Effects of Derivatives Not Designated as Hedging Instruments | The table below provides information regarding the income statement effects of derivatives not designated as hedging instruments: Amount of Derivative Pretax (Gain) Loss Recognized in Income Three Months Ended September 30, Nine Months Ended September 30, ($ in millions) 2022 2021 2022 2021 Derivatives Not Designated as Hedging Instruments Income Statement Caption Foreign exchange contracts (1) Other (income) expense, net $ (41) $ 18 $ (77) $ 234 Foreign exchange contracts (2) Sales (4) (4) (42) 6 (1) These derivative contracts primarily mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates. Amount in the first nine months of 2021 includes a loss on forward exchange contracts entered into in conjunction with the spin-off of Organon. (2) These derivative contracts serve as economic hedges of forecasted transactions. |
Information on Investments in Debt and Equity Securities | Information on investments in debt and equity securities is as follows: September 30, 2022 December 31, 2021 Amortized Gross Unrealized Fair Amortized Gross Unrealized Fair ($ in millions) Gains Losses Gains Losses U.S. government and agency securities $ 67 $ — $ — $ 67 $ 80 $ — $ — $ 80 Commercial paper 4 — — 4 — — — — Corporate notes and bonds 3 — — 3 4 — — 4 Foreign government bonds 2 — — 2 2 — — 2 Total debt securities $ 76 $ — $ — $ 76 $ 86 $ — $ — $ 86 Publicly traded equity securities (1) 1,334 1,647 Total debt and publicly traded equity securities $ 1,410 $ 1,733 (1) Unrealized net losses of $221 million and $415 million were recorded in Other (income) expense, net in the third quarter and first nine months of 2022, respectively, on equity securities still held at September 30, 2022. Unrealized net (gains) losses of $(90) million and $109 million were recorded in Other (income) expense, net in the third quarter and first nine months of 2021, respectively, on equity securities still held at September 30, 2021. |
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Fair Value Measurements Using Fair Value Measurements Using Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total ($ in millions) September 30, 2022 December 31, 2021 Assets Investments Commercial paper $ — $ 4 $ — $ 4 $ — $ — $ — $ — Foreign government bonds — 2 — 2 — 2 — 2 Publicly traded equity securities 1,081 — — 1,081 368 — — 368 1,081 6 — 1,087 368 2 — 370 Other assets (1) U.S. government and agency securities 67 — — 67 80 — — 80 Corporate notes and bonds 3 — — 3 4 — — 4 Publicly traded equity securities 253 — — 253 1,279 — — 1,279 323 — — 323 1,363 — — 1,363 Derivative assets (2) Forward exchange contracts — 945 — 945 — 351 — 351 Purchased currency options — 563 — 563 — 184 — 184 Interest rate swaps — — — — — 14 — 14 — 1,508 — 1,508 — 549 — 549 Total assets $ 1,404 $ 1,514 $ — $ 2,918 $ 1,731 $ 551 $ — $ 2,282 Liabilities Other liabilities Contingent consideration $ — $ — $ 499 $ 499 $ — $ — $ 777 $ 777 Derivative liabilities (2) Forward exchange contracts — 242 — 242 — 120 — 120 Written currency options — — — — — 1 — 1 — 242 — 242 — 121 — 121 Total liabilities $ — $ 242 $ 499 $ 741 $ — $ 121 $ 777 $ 898 (1) Investments included in other assets are restricted as to use, including for the payment of benefits under employee benefit plans. (2) The fair value determination of derivatives includes the impact of the credit risk of counterparties to the derivatives and the Company’s own credit risk, the effects of which were not significant. |
Information About the Changes in Liabilities for Contingent Consideration | Summarized information about the changes in the fair value of liabilities for contingent consideration associated with business combinations is as follows: ($ in millions) 2022 2021 Fair value January 1 $ 777 $ 841 Changes in estimated fair value (1) (156) 73 Payments (119) — Other (3) (12) Fair value September 30 (2) $ 499 $ 902 (1) Recorded in Cost of sales, Research and development expenses, and Other (income) expense, net . Includes cumulative translation adjustments. (2) At September 30, 2022, $358 million of the liabilities relate to the 2016 termination of the Sanofi Pasteur MSD joint venture. As part of the termination, Merck recorded a liability for contingent future royalty payments of 11.5% on net sales of all Merck products that were previously sold by the joint venture through December 31, 2024. The fair value of this liability is determined utilizing the estimated amount and timing of projected cash flows using a risk-adjusted discount rate to present value the cash flows. Balance at September 30, 2022 includes $139 million recorded as a current liability for amounts expected to be paid within the next 12 months. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of: ($ in millions) September 30, 2022 December 31, 2021 Finished goods $ 1,683 $ 1,747 Raw materials and work in process 6,532 6,220 Supplies 227 196 Total (approximates current cost) 8,442 8,163 Decrease to LIFO cost (187) (16) $ 8,255 $ 8,147 Recognized as: Inventories $ 5,614 $ 5,953 Other assets 2,641 2,194 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Equity | Three Months Ended September 30, Common Stock Other Retained Accumulated Treasury Stock Non- Total ($ and shares in millions except per share amounts) Shares Par Value Shares Cost Balance at July 1, 2021 3,577 $ 1,788 $ 44,039 $ 48,777 $ (4,628) 1,044 $ (56,682) $ 94 $ 33,388 Net income attributable to Merck & Co., Inc. — — — 4,567 — — — — 4,567 Other comprehensive income, net of taxes — — — — 38 — — — 38 Cash dividends declared on common stock ($0.65 per share) — — — (1,653) — — — — (1,653) Treasury stock shares purchased — — — — — 8 (583) — (583) Share-based compensation plans and other — — 110 — — — 21 — 131 Net income attributable to noncontrolling interests — — — — — — — 4 4 Distributions attributable to noncontrolling interests — — — — — — — (29) (29) Balance at September 30, 2021 3,577 $ 1,788 $ 44,149 $ 51,691 $ (4,590) 1,052 $ (57,244) $ 69 $ 35,863 Balance at July 1, 2022 3,577 $ 1,788 $ 44,115 $ 58,437 $ (4,327) 1,044 $ (56,770) $ 75 $ 43,318 Net income attributable to Merck & Co., Inc. — — — 3,248 — — — — 3,248 Other comprehensive loss, net of taxes — — — — (416) — — — (416) Cash dividends declared on common stock ($0.69 per share) — — — (1,757) — — — — (1,757) Share-based compensation plans and other — — 128 — — — 12 — 140 Net income attributable to noncontrolling interests — — — — — — — 5 5 Distributions attributable to noncontrolling interests — — — — — — — (14) (14) Balance at September 30, 2022 3,577 $ 1,788 $ 44,243 $ 59,928 $ (4,743) 1,044 $ (56,758) $ 66 $ 44,524 Nine Months Ended September 30, Common Stock Other Retained Accumulated Treasury Stock Non- Total ($ and shares in millions except per share amounts) Shares Par Value Shares Cost Balance at January 1, 2021 3,577 $ 1,788 $ 39,588 $ 47,362 $ (6,634) 1,047 $ (56,787) $ 87 $ 25,404 Net income attributable to Merck & Co., Inc. — — — 9,291 — — — — 9,291 Other comprehensive income, net of taxes — — — — 1,595 — — — 1,595 Cash dividends declared on common stock ($1.95 per share) — — — (4,962) — — — — (4,962) Treasury stock shares purchased — — — — — 11 (822) — (822) Spin-off of Organon & Co. — — 4,643 — 449 — — (1) 5,091 Share-based compensation plans and other — — (82) — — (6) 365 — 283 Net income attributable to noncontrolling interests — — — — — — — 12 12 Distributions attributable to noncontrolling interests — — — — — — — (29) (29) Balance at September 30, 2021 3,577 $ 1,788 $ 44,149 $ 51,691 $ (4,590) 1,052 $ (57,244) $ 69 $ 35,863 Balance at January 1, 2022 3,577 $ 1,788 $ 44,238 $ 53,696 $ (4,429) 1,049 $ (57,109) $ 73 $ 38,257 Net income attributable to Merck & Co., Inc. — — — 11,502 — — — — 11,502 Other comprehensive loss, net of taxes — — — — (314) — — — (314) Cash dividends declared on common stock ($2.07 per share) — — — (5,270) — — — — (5,270) Share-based compensation plans and other — — 5 — — (5) 351 — 356 Net income attributable to noncontrolling interests — — — — — — — 6 6 Distributions attributable to noncontrolling interests — — — — — — — (13) (13) Balance at September 30, 2022 3,577 $ 1,788 $ 44,243 $ 59,928 $ (4,743) 1,044 $ (56,758) $ 66 $ 44,524 |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Net Benefit Costs | The Company has defined benefit pension plans covering eligible employees in the U.S. and in certain of its international subsidiaries. The net periodic benefit cost of such plans (including certain costs reported as part of discontinued operations in the first nine months of 2021) consisted of the following components: Three Months Ended Nine Months Ended 2022 2021 2022 2021 ($ in millions) U.S. International U.S. International U.S. International U.S. International Service cost $ 91 $ 66 $ 104 $ 75 $ 289 $ 213 $ 302 $ 254 Interest cost 123 35 102 33 330 110 305 92 Expected return on plan assets (182) (93) (188) (105) (576) (292) (568) (313) Amortization of unrecognized prior service credit (8) (3) (9) (3) (24) (10) (29) (12) Net loss amortization 10 24 75 32 122 73 218 110 Termination benefits 1 — 2 — 2 1 54 3 Curtailments 3 — (1) — 11 — 15 (27) Settlements 79 — 139 — 180 — 139 2 $ 117 $ 29 $ 224 $ 32 $ 334 $ 95 $ 436 $ 109 |
Other Postretirement Benefit Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Net Benefit Costs | The Company provides medical benefits, principally to its eligible U.S. retirees and similar benefits to their dependents, through its other postretirement benefit plans. The net credit of such plans consisted of the following components: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Service cost $ 11 $ 11 $ 36 $ 37 Interest cost 11 12 34 34 Expected return on plan assets (21) (20) (64) (59) Amortization of unrecognized prior service credit (14) (16) (42) (48) Net gain amortization (11) (12) (32) (30) Termination benefits — — — 37 Curtailments — (1) (1) (29) $ (24) $ (26) $ (69) $ (58) |
Other (Income) Expense, Net (Ta
Other (Income) Expense, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other (Income) Expense, Net | Other (income) expense, net, consisted of: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Interest income $ (40) $ (7) $ (62) $ (27) Interest expense 244 196 727 597 Exchange losses 96 46 220 202 Loss (income) from investments in equity securities, net (1) 371 (683) 1,361 (1,535) Net periodic defined benefit plan (credit) cost other than service cost (60) 40 (208) (159) Other, net (182) (42) (462) (85) $ 429 $ (450) $ 1,576 $ (1,007) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Calculations of Earnings Per Share | The calculations of earnings per share are as follows: Three Months Ended Nine Months Ended ($ and shares in millions except per share amounts) 2022 2021 2022 2021 Net Income from Continuing Operations Attributable to Merck & Co., Inc. $ 3,248 $ 4,567 $ 11,502 $ 8,525 Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests — — — 766 Net Income Attributable to Merck & Co., Inc. $ 3,248 $ 4,567 $ 11,502 $ 9,291 Average common shares outstanding 2,533 2,530 2,531 2,531 Common shares issuable (1) 9 6 9 8 Average common shares outstanding assuming dilution 2,542 2,536 2,540 2,539 Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders: Income from Continuing Operations $ 1.28 $ 1.81 $ 4.55 $ 3.37 Income from Discontinued Operations — — — 0.30 Net Income $ 1.28 $ 1.81 $ 4.55 $ 3.67 Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders: Income from Continuing Operations $ 1.28 $ 1.80 $ 4.53 $ 3.36 Income from Discontinued Operations — — — 0.30 Net Income $ 1.28 $ 1.80 $ 4.53 $ 3.66 (1) Issuable primarily under share-based compensation plans. |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Changes in AOCI by Component | Changes in each component of other comprehensive income (loss) are as follows: Three Months Ended September 30, ($ in millions) Derivatives Employee Foreign Currency Accumulated Other Balance July 1, 2021, net of taxes $ (26) $ (3,028) $ (1,574) $ (4,628) Other comprehensive income (loss) before reclassification adjustments, pretax 72 (24) (96) (48) Tax (16) 16 12 12 Other comprehensive income (loss) before reclassification adjustments, net of taxes 56 (8) (84) (36) Reclassification adjustments, pretax 36 (1) 68 (2) — 104 Tax (8) (22) — (30) Reclassification adjustments, net of taxes 28 46 — 74 Other comprehensive income (loss), net of taxes 84 38 (84) 38 Balance September 30, 2021, net of taxes $ 58 $ (2,990) $ (1,658) $ (4,590) Balance July 1, 2022, net of taxes $ 390 $ (2,465) $ (2,252) $ (4,327) Other comprehensive income (loss) before reclassification adjustments, pretax 682 (294) (618) (230) Tax (143) 62 50 (31) Other comprehensive income (loss) before reclassification adjustments, net of taxes 539 (232) (568) (261) Reclassification adjustments, pretax (254) (1) 77 (2) — (177) Tax 53 (31) — 22 Reclassification adjustments, net of taxes (201) 46 — (155) Other comprehensive income (loss), net of taxes 338 (186) (568) (416) Balance September 30, 2022, net of taxes $ 728 $ (2,651) $ (2,820) $ (4,743) Nine Months Ended September 30, ($ in millions) Derivatives Employee Foreign Currency Accumulated Other Balance January 1, 2021, net of taxes $ (266) $ (4,540) $ (1,828) $ (6,634) Other comprehensive income (loss) before reclassification adjustments, pretax 193 1,739 (167) 1,765 Tax (41) (385) (84) (510) Other comprehensive income (loss) before reclassification adjustments, net of taxes 152 1,354 (251) 1,255 Reclassification adjustments, pretax 218 (1) 210 (2) — 428 Tax (46) (42) — (88) Reclassification adjustments, net of taxes 172 168 — 340 Other comprehensive income (loss), net of taxes 324 1,522 (251) 1,595 Spin-off of Organon (see Note 2) — 28 421 449 Balance September 30, 2021, net of taxes $ 58 $ (2,990) $ (1,658) $ (4,590) Balance January 1, 2022, net of taxes $ 144 $ (2,743) $ (1,830) $ (4,429) Other comprehensive income (loss) before reclassification adjustments, pretax 1,233 (125) (1,001) 107 Tax (259) 25 11 (223) Other comprehensive income (loss) before reclassification adjustments, net of taxes 974 (100) (990) (116) Reclassification adjustments, pretax (493) (1) 266 (2) — (227) Tax 103 (74) — 29 Reclassification adjustments, net of taxes (390) 192 — (198) Other comprehensive income (loss), net of taxes 584 92 (990) (314) Balance September 30, 2022, net of taxes $ 728 $ (2,651) $ (2,820) $ (4,743) (1) Primarily relates to foreign currency cash flow hedges that were reclassified from AOCL to Sales . (2) Includes net amortization of prior service cost and actuarial gains and losses included in net periodic benefit cost (see Note 11). |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Sales from Products | Sales of the Company’s products were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 ($ in millions) U.S. Int’l Total U.S. Int’l Total U.S. Int’l Total U.S. Int’l Total Pharmaceutical: Oncology Keytruda $ 3,331 $ 2,095 $ 5,426 $ 2,580 $ 1,954 $ 4,534 $ 9,307 $ 6,180 $ 15,487 $ 7,108 $ 5,501 $ 12,609 Alliance revenue-Lynparza (1) 144 140 284 129 117 246 427 397 825 371 350 721 Alliance revenue-Lenvima (1) 142 60 202 114 74 188 426 235 660 287 211 498 Alliance revenue-Reblozyl (2) 32 7 39 — — — 87 37 124 — — — Vaccines Gardasil/Gardasil 9 957 1,337 2,294 839 1,154 1,993 1,803 3,624 5,428 1,605 2,539 4,144 ProQuad/M-M-R II /Varivax 532 136 668 537 125 661 1,337 379 1,716 1,255 371 1,626 RotaTeq 154 102 256 135 92 227 427 218 644 364 229 593 Pneumovax 23 68 63 131 181 97 277 280 177 457 354 247 600 Vaqta 27 36 64 32 16 48 72 62 134 80 58 138 Hospital Acute Care Bridion 233 190 423 181 188 369 665 579 1,244 545 551 1,096 Prevymis 49 64 114 39 57 96 136 174 310 111 159 270 Dificid 72 6 77 52 2 54 184 12 196 108 7 115 Primaxin — 63 63 — 69 70 1 185 185 — 194 194 Noxafil 13 49 62 19 45 64 39 141 180 48 149 197 Invanz 2 48 50 (2) 55 53 4 144 148 (2) 159 157 Cancidas 1 42 43 1 56 56 5 133 138 4 164 168 Zerbaxa 24 19 43 (1) (1) (2) 64 55 120 (5) (6) (11) Cardiovascular Alliance revenue-Adempas/Verquvo (3) 85 3 88 73 27 100 244 14 258 222 26 248 Adempas — 57 57 — 59 59 — 181 181 — 188 188 Virology Lagevrio — 436 436 — — — 1,523 3,336 4,859 — — — Isentress/Isentress HD 68 93 161 77 112 189 196 270 466 222 368 590 Neuroscience Belsomra 20 42 62 23 58 81 60 139 199 56 183 238 Immunology Simponi — 173 173 — 203 203 — 540 540 — 619 619 Remicade — 49 49 — 73 73 — 163 163 — 233 233 Diabetes Januvia 332 385 717 365 487 852 958 1,294 2,252 997 1,448 2,445 Janumet 90 327 417 86 401 487 258 1,089 1,347 244 1,205 1,449 Other pharmaceutical (4) 244 321 564 210 306 518 616 949 1,565 637 950 1,589 Total Pharmaceutical segment sales 6,620 6,343 12,963 5,670 5,826 11,496 19,119 20,707 39,826 14,611 16,103 30,714 Animal Health: Livestock 186 643 829 190 675 864 521 1,965 2,486 508 1,996 2,503 Companion Animals 289 253 542 277 276 553 904 929 1,834 855 948 1,804 Total Animal Health segment sales 475 896 1,371 467 951 1,417 1,425 2,894 4,320 1,363 2,944 4,307 Total segment sales 7,095 7,239 14,334 6,137 6,777 12,913 20,544 23,601 44,146 15,974 19,047 35,021 Other (5) 227 398 625 139 101 241 383 925 1,307 192 (30) 162 $ 7,322 $ 7,637 $ 14,959 $ 6,276 $ 6,878 $ 13,154 $ 20,927 $ 24,526 $ 45,453 $ 16,166 $ 19,017 $ 35,183 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 4). (2) Alliance revenue for Reblozyl represents royalties and, for the year-to-date period, a payment received related to the achievement of a regulatory milestone (see Note 4). (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 4). (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, as well as revenue from third-party manufacturing arrangements (including sales to Organon). Other for the nine months ended September 30, 2022 and 2021 also includes $156 million and $191 million, respectively, related to upfront and milestone payments received by Merck for out-licensing arrangements . |
Consolidated Sales by Geographic Area | Consolidated sales by geographic area where derived are as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 United States $ 7,322 $ 6,276 $ 20,927 $ 16,166 Europe, Middle East and Africa 3,286 3,342 11,228 9,912 China 1,442 1,307 3,957 3,004 Japan 673 638 2,776 1,929 Asia Pacific (other than China and Japan) 854 613 2,792 1,782 Latin America 684 599 1,933 1,631 Other 698 379 1,840 759 $ 14,959 $ 13,154 $ 45,453 $ 35,183 |
Reconciliation of Segment Profits to Income before Taxes | A reconciliation of segment profits to Income from Continuing Operations Before Taxes is as follows: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Segment profits: Pharmaceutical segment $ 9,590 $ 8,606 $ 28,263 $ 22,450 Animal Health segment 515 505 1,672 1,629 Total segment profits 10,105 9,111 29,935 24,079 Other profits 377 141 831 29 Unallocated: Interest income 40 7 62 27 Interest expense (244) (196) (727) (597) Amortization (460) (360) (1,623) (1,231) Depreciation (448) (358) (1,257) (1,031) Research and development (4,277) (2,312) (9,374) (8,775) Restructuring costs (94) (107) (288) (487) Other unallocated, net (1,416) (660) (4,628) (2,044) $ 3,583 $ 5,266 $ 12,931 $ 9,970 |
Spin-Off of Organon & Co. - Nar
Spin-Off of Organon & Co. - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jun. 02, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Consideration received | $ 9,000 | |||||
Disposal group, other expense | $ 556 | |||||
Organon & Co. | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Stock conversion ratio | 0.1 | |||||
Revenue from related party | $ 100 | $ 0 | $ 293 | 0 | ||
Related party amount in cost of sales | 104 | $ 0 | 312 | $ 0 | ||
Due from related parties, current | 567 | 567 | $ 964 | |||
Due to related parties, current | $ 333 | $ 333 | $ 400 | |||
Minimum | Transition services agreement | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Period of continuing involvement after disposal | 25 months | |||||
Minimum | Manufacturing and supply agreements | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Period of continuing involvement after disposal | 4 years | |||||
Maximum | Transition services agreement | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Period of continuing involvement after disposal | 31 months | |||||
Maximum | Manufacturing and supply agreements | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Period of continuing involvement after disposal | 10 years | |||||
Organon & Co. | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Face amount of debt | $ 9,500 |
Spin-Off of Organon & Co. - Inc
Spin-Off of Organon & Co. - Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Sales | $ 2,512 | |||
Costs, Expenses and Other | ||||
Cost of sales | 789 | |||
Selling, general and administrative | 877 | |||
Research and development | 103 | |||
Restructuring costs | 1 | |||
Other (income) expense, net | (15) | |||
Operating expenses | 1,755 | |||
Income from discontinued operations before taxes | 757 | |||
Income tax benefit | (12) | |||
Income from discontinued operations, net of taxes | 769 | |||
Less: Income of discontinued operations attributable to noncontrolling interests | 3 | |||
Income from discontinued operations, net of taxes and amounts attributable to noncontrolling interests | $ 0 | $ 0 | $ 0 | $ 766 |
Acquisitions, Research Collab_2
Acquisitions, Research Collaborations and License Agreements (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Oct. 31, 2022 USD ($) | Aug. 31, 2022 USD ($) | Jul. 31, 2022 USD ($) | May 31, 2022 USD ($) | Apr. 30, 2021 USD ($) | Jan. 31, 2021 USD ($) research_program collaboration_target | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Business Acquisition [Line Items] | |||||||||||
Upfront and milestone payments | $ 250 | $ 250 | |||||||||
Research and development | $ 4,399 | $ 2,445 | $ 9,773 | $ 9,177 | |||||||
Subsequent Event | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Compensation earned | $ 50 | ||||||||||
Additional funding by others, percentage of development costs | 50% | ||||||||||
Additional funding by others, development costs subject to funding | $ 375 | ||||||||||
Pandion Therapeutics | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Research and development | 1,700 | ||||||||||
Consideration transferred, asset acquisition | $ 1,900 | ||||||||||
Asset acquisition costs | 147 | ||||||||||
Net assets | $ 156 | ||||||||||
Orna Therapeutics | Subsequent Event | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Amount paid for investment | $ 100 | ||||||||||
Orna Therapeutics | Licensing Agreements | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Upfront and milestone payments | $ 150 | ||||||||||
Orna Therapeutics | Licensing Agreements | Development Milestones | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent milestone payments collaborative arrangement | 440 | ||||||||||
Orna Therapeutics | Licensing Agreements | Regulatory Milestones | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent milestone payments collaborative arrangement | 675 | ||||||||||
Orna Therapeutics | Licensing Agreements | Sales-Based Milestones | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent milestone payments collaborative arrangement | $ 2,400 | ||||||||||
Orion Corporation | Licensing Agreements | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Upfront and milestone payments | $ 290 | ||||||||||
Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. | Licensing Agreements | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Upfront and milestone payments | 35 | $ 30 | |||||||||
Milestone payments to be made to a collaborative partner | 30 | ||||||||||
Milestone payment to be made to a collaborative partner | 25 | ||||||||||
Research and development payments to be made to a collaborative partner (up to) | 101 | ||||||||||
Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. | Licensing Agreements | Development Milestones | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent milestone payments collaborative arrangement | 82 | 90 | |||||||||
Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. | Licensing Agreements | Regulatory Milestones | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent milestone payments collaborative arrangement | 334 | ||||||||||
Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. | Licensing Agreements | Sales-Based Milestones | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent milestone payments collaborative arrangement | $ 485 | 780 | |||||||||
Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. | Licensing Agreements | First Commercial Sale Milestones | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent milestone payments collaborative arrangement | $ 290 | ||||||||||
Artiva Biotherapeutics, Inc. | Licensing Agreements | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Upfront and milestone payments | $ 30 | ||||||||||
Upfront and milestone payments to be made | $ 15 | ||||||||||
Number of research programs | research_program | 3 | ||||||||||
Number of collaboration targets | collaboration_target | 3 | ||||||||||
Artiva Biotherapeutics, Inc. | Licensing Agreements | Minimum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Royalty rate | 7% | ||||||||||
Artiva Biotherapeutics, Inc. | Licensing Agreements | Maximum | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Royalty rate | 14% | ||||||||||
Artiva Biotherapeutics, Inc. | Licensing Agreements | Development Milestones | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent milestone payments collaborative arrangement | $ 217.5 | ||||||||||
Artiva Biotherapeutics, Inc. | Licensing Agreements | Regulatory Milestones | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent milestone payments collaborative arrangement | 570 | ||||||||||
Artiva Biotherapeutics, Inc. | Licensing Agreements | Sales-Based Milestones | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent milestone payments collaborative arrangement | $ 1,050 | ||||||||||
COVID-19 | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Charges related to program discontinuation | $ 207 |
Collaborative Arrangements - Na
Collaborative Arrangements - Narrative (Details) course in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jan. 31, 2022 USD ($) | Mar. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) course | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) market course | Sep. 30, 2021 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Amortization | $ 1,623 | $ 1,231 | |||||
Number of markets (more than) | market | 40 | ||||||
Remaining minimum courses committed (in courses) | course | 0.8 | 0.8 | |||||
Sales | $ 14,959 | $ 13,154 | $ 45,453 | 35,183 | |||
Operating Segments | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Sales | 14,334 | 12,913 | 44,146 | 35,021 | |||
Operating Segments | Pharmaceutical | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Sales | 12,963 | 11,496 | 39,826 | 30,714 | |||
Lynparza | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Amortization | $ 250 | ||||||
Lynparza | Other Noncurrent Assets | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Finite-lived intangible assets | 1,500 | 1,500 | |||||
Lenvima | Operating Segments | Pharmaceutical | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Sales | 202 | 188 | 660 | 498 | |||
Lenvima | Other Noncurrent Assets | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Finite-lived intangible assets | 867 | 867 | |||||
Verquvo | Other Intangible Assets | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Finite-lived intangible assets | 53 | 53 | |||||
Adempas | Operating Segments | Pharmaceutical | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Sales | 57 | 59 | 181 | 188 | |||
Adempas | Other Intangible Assets | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Finite-lived intangible assets | 597 | 597 | |||||
Alliance Revenue - Reblozyl | Operating Segments | Pharmaceutical | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Sales | 39 | $ 0 | 124 | $ 0 | |||
AstraZeneca | Sales-Based Milestones | Lynparza | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Probable contingent payments | 600 | ||||||
Liabilities | $ 600 | ||||||
Milestone payments accrued but not yet paid | 600 | 600 | |||||
AstraZeneca | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | Lynparza | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Sales-based milestone payments | 400 | ||||||
Potential future sales-based milestone payments | 2,100 | 2,100 | |||||
Capitalized milestone payment | 250 | ||||||
Potential future regulatory milestone payments | 1,200 | 1,200 | |||||
Eisai | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
License option payment related to collaborative arrangement | $ 125 | ||||||
Eisai | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | Lenvima | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Sales-based milestone payments | 600 | ||||||
Potential future sales-based milestone payments | $ 2,600 | 2,600 | |||||
Capitalized milestone payment | $ 50 | ||||||
Bayer AG | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Sales-based milestone payments | $ 400 | ||||||
Bristol Myers Squibb | Licensing Agreements | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Royalty rate, deduction | 0.50 | ||||||
Royalties | $ 104 | ||||||
Bristol Myers Squibb | Licensing Agreements | Sales-Based Milestones | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Contingent milestone payments collaborative arrangement | 80 | ||||||
Bristol Myers Squibb | Licensing Agreements | Regulatory Milestones | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Contingent milestone payments collaborative arrangement | $ 20 | ||||||
Bristol Myers Squibb | Licensing Agreements | Minimum | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Royalty rate | 20% | ||||||
Bristol Myers Squibb | Licensing Agreements | Maximum | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Royalty rate | 24% |
Collaborative Arrangements - Fi
Collaborative Arrangements - Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Sales | $ 14,959 | $ 13,154 | $ 45,453 | $ 35,183 | |
Cost of sales | 3,934 | 3,450 | 13,530 | 9,752 | |
Selling, general and administrative | 2,520 | 2,336 | 7,355 | 6,804 | |
Research and development | 4,399 | 2,445 | 9,773 | 9,177 | |
Payables included in Accrued and other liabilities | 22,998 | 22,998 | $ 23,872 | ||
Other current assets | AstraZeneca | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Receivables included in Other current assets | 290 | 290 | 271 | ||
Other current assets | Eisai | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Receivables included in Other current assets | 202 | 202 | 200 | ||
Other current assets | Bayer AG | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Receivables included in Other current assets | 144 | 144 | 114 | ||
Accounts Payable and Accrued Liabilities | AstraZeneca | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payables included in Accrued and other liabilities | 12 | 12 | 415 | ||
Accounts Payable and Accrued Liabilities | Eisai | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payables included in Accrued and other liabilities | 1 | 1 | 625 | ||
Accounts Payable and Accrued Liabilities | Bayer AG | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payables included in Accrued and other liabilities | 75 | 75 | 472 | ||
Accounts Payable and Accrued Liabilities | Ridgeback Biotherapeutics LP | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payables included in Accrued and other liabilities | 193 | 193 | 283 | ||
Other Noncurrent Liabilities | AstraZeneca | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payables included in Other Noncurrent Liabilities | 600 | 600 | $ 0 | ||
Revenue | AstraZeneca | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Alliance revenue - profit sharing | 294 | 252 | 868 | 741 | |
Revenue | AstraZeneca | Collaborative Arrangement | Alliance revenue - Lynparza | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Alliance revenue - profit sharing | 284 | 246 | 825 | 721 | |
Revenue | AstraZeneca | Collaborative Arrangement | Alliance revenue - Koselugo | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Alliance revenue - profit sharing | 10 | 6 | 43 | 20 | |
Revenue | Eisai | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Alliance revenue - profit sharing | 202 | 188 | 660 | 498 | |
Revenue | Bayer AG | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Alliance revenue - profit sharing | 88 | 100 | 258 | 248 | |
Sales | 151 | 161 | 454 | 439 | |
Revenue | Bayer AG | Collaborative Arrangement | Adempas | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Net sales by Merck | 57 | 59 | 181 | 188 | |
Revenue | Bayer AG | Collaborative Arrangement | Verquvo | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Net sales by Merck | 6 | 2 | 15 | 3 | |
Revenue | Ridgeback Biotherapeutics LP | Collaborative Arrangement | Lagevrio | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Sales | 436 | 0 | 4,859 | 0 | |
Cost of sales | AstraZeneca | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Cost of sales | 64 | 42 | 425 | 125 | |
Amortization of intangible assets | 250 | ||||
Cost of sales | Eisai | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Cost of sales | 53 | 49 | 159 | 143 | |
Cost of sales | Bayer AG | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Cost of sales | 55 | 53 | 158 | 328 | |
Amortization of intangible assets | 153 | ||||
Cost of sales | Ridgeback Biotherapeutics LP | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Cost of sales | 234 | 4 | 2,580 | 56 | |
Selling, general and administrative | AstraZeneca | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Selling, general and administrative | 45 | 44 | 135 | 127 | |
Selling, general and administrative | Eisai | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Selling, general and administrative | 42 | 34 | 115 | 88 | |
Selling, general and administrative | Bayer AG | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Selling, general and administrative | 42 | 31 | 107 | 84 | |
Selling, general and administrative | Ridgeback Biotherapeutics LP | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Selling, general and administrative | 41 | 6 | 105 | 13 | |
Research and development | AstraZeneca | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Research and development | 28 | 27 | 79 | 87 | |
Research and development | Eisai | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Research and development | 24 | 43 | 128 | 165 | |
Research and development | Bayer AG | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Research and development | 18 | 16 | 52 | 36 | |
Research and development | Ridgeback Biotherapeutics LP | Collaborative Arrangement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Research and development | $ 8 | $ 58 | $ 29 | $ 167 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | |||||
Expected restructuring and related cost | $ 3,500 | $ 3,500 | |||
Estimate of cumulative pre tax costs that will result in cash outlays | 70% | ||||
Estimate of cumulative pre tax costs that will be noncash | 30% | ||||
Total pretax restructuring costs | 175 | $ 168 | $ 559 | $ 630 | |
Cumulative costs since program inception | $ 3,200 | $ 3,200 | |||
Forecast | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected restructuring and related cost | $ 600 |
Restructuring - Charges Activit
Restructuring - Charges Activities by Type of Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | $ 175 | $ 168 | $ 559 | $ 630 |
Separation Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 65 | 17 | 197 | 310 |
Accelerated Depreciation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 21 | 22 | 97 | 60 |
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 89 | 129 | 265 | 260 |
Cost of sales | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 54 | 48 | 167 | 113 |
Cost of sales | Separation Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 0 | 0 | 0 | 0 |
Cost of sales | Accelerated Depreciation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 16 | 11 | 51 | 32 |
Cost of sales | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 38 | 37 | 116 | 81 |
Selling, general and administrative | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 26 | 5 | 74 | 9 |
Selling, general and administrative | Separation Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 0 | 0 | 0 | 0 |
Selling, general and administrative | Accelerated Depreciation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 5 | 4 | 17 | 8 |
Selling, general and administrative | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 21 | 1 | 57 | 1 |
Research and development | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 1 | 8 | 30 | 21 |
Research and development | Separation Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 0 | 0 | 0 | 0 |
Research and development | Accelerated Depreciation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 0 | 7 | 29 | 20 |
Research and development | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 1 | 1 | 1 | 1 |
Restructuring costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 94 | 107 | 288 | 487 |
Restructuring costs | Separation Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 65 | 17 | 197 | 310 |
Restructuring costs | Accelerated Depreciation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | 0 | 0 | 0 | 0 |
Restructuring costs | Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total pretax restructuring costs | $ 29 | $ 90 | $ 91 | $ 177 |
Restructuring - Activities by P
Restructuring - Activities by Program (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve, beginning balance | $ 637 | |||
Expense | $ 175 | $ 168 | 559 | $ 630 |
(Payments) receipts, net | (761) | |||
Non-cash activity | 86 | |||
Restructuring reserve, ending balance | 521 | 521 | ||
Separation Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve, beginning balance | 596 | |||
Expense | 65 | 17 | 197 | 310 |
(Payments) receipts, net | (303) | |||
Non-cash activity | 0 | |||
Restructuring reserve, ending balance | 490 | 490 | ||
Accelerated Depreciation | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve, beginning balance | 0 | |||
Expense | 21 | 22 | 97 | 60 |
(Payments) receipts, net | 0 | |||
Non-cash activity | (97) | |||
Restructuring reserve, ending balance | 0 | 0 | ||
Other | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve, beginning balance | 41 | |||
Expense | 89 | $ 129 | 265 | $ 260 |
(Payments) receipts, net | (458) | |||
Non-cash activity | 183 | |||
Restructuring reserve, ending balance | $ 31 | $ 31 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 USD ($) interest_rate_swap | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) interest_rate_swap | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Feb. 28, 2022 USD ($) interest_rate_swap | |
Derivative [Line Items] | ||||||
Total swap notional amount | $ 26,026,000,000 | $ 26,026,000,000 | $ 32,958,000,000 | |||
Pretax net unrealized gains on derivatives maturing within next 12 months estimated to be reclassified from AOCI to sales | 864,000,000 | |||||
Equity investments without readily determinable fair values | 705,000,000 | $ 578,000,000 | 705,000,000 | $ 578,000,000 | ||
Unrealized gains recognized on investments in equity securities without readily determinable fair value | 21,000,000 | 104,000,000 | ||||
Unrealized losses recognized on investments in equity securities without readily determinable fair values | 12,000,000 | 1,000,000 | ||||
Cumulative unrealized gains on investments | 255,000,000 | 255,000,000 | ||||
Cumulative unrealized losses on investments | 19,000,000 | 19,000,000 | ||||
Equity securities, noncurrent | 655,000,000 | 1,200,000,000 | 655,000,000 | 1,200,000,000 | ||
Loss (income) from investments in equity securities, net | 371,000,000 | (683,000,000) | 1,361,000,000 | (1,535,000,000) | ||
Fair value of loans payable and long-term debt, including current portion | 25,900,000,000 | 25,900,000,000 | 35,700,000,000 | |||
Debt, carrying amount | 30,400,000,000 | 30,400,000,000 | 33,100,000,000 | |||
Factored accounts receivable | 2,300,000,000 | 2,800,000,000 | ||||
Restricted cash | 55,000,000 | 55,000,000 | 62,000,000 | |||
Cash collateral received from counterparties | 794,000,000 | 794,000,000 | 164,000,000 | |||
2.40% Notes Due 2022 | ||||||
Derivative [Line Items] | ||||||
Face amount of debt | 1,000,000,000 | 1,000,000,000 | ||||
Equity Funds | ||||||
Derivative [Line Items] | ||||||
Loss (income) from investments in equity securities, net | 141,000,000 | $ (391,000,000) | 952,000,000 | $ (893,000,000) | ||
Level 2 | ||||||
Derivative [Line Items] | ||||||
Cash equivalents | $ 10,000,000,000 | $ 10,000,000,000 | 6,800,000,000 | |||
2.35% Notes Due 2022 | ||||||
Derivative [Line Items] | ||||||
Face amount of debt | $ 1,250,000,000 | |||||
Stated interest rate | 2.35% | |||||
2.40% Notes Due 2022 | ||||||
Derivative [Line Items] | ||||||
Stated interest rate | 2.40% | 2.40% | ||||
Interest rate swap contracts | ||||||
Derivative [Line Items] | ||||||
Number of interest rate swaps held (in interest rate swaps) | interest_rate_swap | 4 | 4 | 5 | |||
Interest rate swap contracts | 2.35% Notes Due 2022 | ||||||
Derivative [Line Items] | ||||||
Total swap notional amount | $ 1,250,000,000 | |||||
Interest rate swap contracts | 2.40% Notes Due 2022 | ||||||
Derivative [Line Items] | ||||||
Total swap notional amount | $ 1,000,000,000 | $ 1,000,000,000 | ||||
Derivatives Designated as Hedging Instruments | ||||||
Derivative [Line Items] | ||||||
Total swap notional amount | 8,788,000,000 | 8,788,000,000 | 12,245,000,000 | |||
Derivatives Not Designated as Hedging Instruments | ||||||
Derivative [Line Items] | ||||||
Total swap notional amount | $ 17,238,000,000 | $ 17,238,000,000 | $ 20,713,000,000 | |||
Maximum | Derivatives Designated as Hedging Instruments | ||||||
Derivative [Line Items] | ||||||
Maximum average period of maturities of contracts in years (less than) | 2 years | |||||
Maximum | Derivatives Not Designated as Hedging Instruments | ||||||
Derivative [Line Items] | ||||||
Maximum average period of maturities of contracts in years (less than) | 1 year |
Financial Instruments - Effect
Financial Instruments - Effect of Net Investment Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income | $ (1) | $ 1 | $ (47) | $ (27) |
Foreign exchange contracts | Other (income) expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing | 0 | (4) | (2) | (12) |
Euro-denominated notes | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income | (250) | (77) | (431) | (199) |
Euro-denominated notes | Other (income) expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing | $ 0 | $ 0 | $ 0 | $ 0 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value Hedges (Details) - Loans payable and current portion of long-term debt - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Carrying Amount of Hedged Liabilities | $ 0 | $ 2,263 |
Cumulative Amount of Fair Value Hedging Adjustment Increase (Decrease) Included in the Carrying Amount | $ 0 | $ 13 |
Financial Instruments - Fair _2
Financial Instruments - Fair Value of Derivatives Segregated between those Derivatives that are Designated as Hedging Instruments and those that are Not Designated as Hedging Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Fair Value of Derivative, Asset | $ 1,508 | $ 549 |
Fair Value of Derivative, Liability | 242 | 121 |
U.S Dollar Notional Amount | 26,026 | 32,958 |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Derivative, Asset | 911 | 328 |
Fair Value of Derivative, Liability | 2 | 25 |
U.S Dollar Notional Amount | 8,788 | 12,245 |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Derivative, Asset | 597 | 221 |
Fair Value of Derivative, Liability | 240 | 96 |
U.S Dollar Notional Amount | 17,238 | 20,713 |
Interest Rate Contract | Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Derivative, Asset | $ 0 | $ 14 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other current assets | Other current assets |
Interest Rate Contract | Derivatives Designated as Hedging Instruments | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
U.S Dollar Notional Amount | $ 0 | $ 2,250 |
Foreign exchange contracts | Derivatives Designated as Hedging Instruments | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Derivative, Asset | $ 826 | $ 271 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other current assets | Other current assets |
U.S Dollar Notional Amount | $ 7,250 | $ 6,778 |
Foreign exchange contracts | Derivatives Designated as Hedging Instruments | Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Derivative, Asset | $ 85 | $ 43 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets |
U.S Dollar Notional Amount | $ 1,408 | $ 1,551 |
Foreign exchange contracts | Derivatives Designated as Hedging Instruments | Accrued and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Derivative, Liability | $ 1 | $ 24 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accrued and other current liabilities | Accrued and other current liabilities |
U.S Dollar Notional Amount | $ 37 | $ 1,623 |
Foreign exchange contracts | Derivatives Designated as Hedging Instruments | Other Noncurrent Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Derivative, Liability | $ 1 | $ 1 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Noncurrent Liabilities | Other Noncurrent Liabilities |
U.S Dollar Notional Amount | $ 93 | $ 43 |
Foreign exchange contracts | Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Derivative, Asset | $ 597 | $ 221 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other current assets | Other current assets |
Fair Value of Derivative, Liability | $ 240 | $ 96 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accrued and other current liabilities | Accrued and other current liabilities |
Foreign exchange contracts | Derivatives Not Designated as Hedging Instruments | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
U.S Dollar Notional Amount | $ 9,523 | $ 10,073 |
Foreign exchange contracts | Derivatives Not Designated as Hedging Instruments | Accrued and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
U.S Dollar Notional Amount | $ 7,715 | $ 10,640 |
Financial Instruments - Informa
Financial Instruments - Information on Derivative Positions Subject to Master Netting Arrangements as if they were Presented on a Net Basis (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross amounts recognized in the consolidated balance sheet, asset | $ 1,508 | $ 549 |
Gross amount subject to offset in master netting arrangements not offset in the condensed balance sheet, asset | (217) | (110) |
Cash collateral received, asset | (794) | (164) |
Net amounts, asset | 497 | 275 |
Gross amounts recognized in the consolidated balance sheet, liability | 242 | 121 |
Gross amount subject to offset in master netting arrangements not offset in the condensed balance sheet, liability | (217) | (110) |
Cash collateral received, liability | 0 | 0 |
Net amounts, liability | $ 25 | $ 11 |
Financial Instruments - Locatio
Financial Instruments - Location and Amount of Pretax (Gains) Losses of Derivatives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Sales | $ 14,959 | $ 13,154 | $ 45,453 | $ 35,183 |
Other (income) expense, net | 429 | (450) | 1,576 | (1,007) |
Other comprehensive income (loss) | $ (416) | $ 38 | $ (314) | $ 1,595 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other (income) expense, net | Other (income) expense, net | Other (income) expense, net | Other (income) expense, net |
Interest rate swap contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in OCI on derivatives | $ (1) | $ 0 | $ (2) | $ (2) |
Amount of gain recognized in Other (income) expense, net on derivatives | (1) | 0 | (2) | (2) |
Interest rate swap contracts | Other (income) expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedged items | 1 | (9) | (13) | (29) |
Derivatives designated as hedging instruments | 0 | (1) | 4 | (1) |
Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in OCI on derivatives | 682 | 72 | 1,233 | 193 |
Increase (decrease) in Sales as a result of AOCL reclassifications | (253) | 36 | (491) | 219 |
Foreign exchange contracts | Reclassification out of Accumulated Other Comprehensive Income | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Sales | $ 253 | $ (36) | $ 491 | $ (219) |
Financial Instruments - Income
Financial Instruments - Income Statement Effects on Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Currency Swap | Other (income) expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Derivative Pretax (Gain) Loss Recognized in Income | $ (41) | $ 18 | $ (77) | $ 234 |
Foreign Exchange Future | Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Derivative Pretax (Gain) Loss Recognized in Income | $ (4) | $ (4) | $ (42) | $ 6 |
Financial Instruments - Infor_2
Financial Instruments - Information on Available-for-sale Investments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Debt Securities, Available-for-sale [Line Items] | |||||
Debt securities, amortized cost | $ 76 | $ 76 | $ 86 | ||
Debt securities, unrealized gains | 0 | 0 | 0 | ||
Debt securities, unrealized losses | 0 | 0 | 0 | ||
Debt securities, fair value | 76 | 76 | 86 | ||
Publicly traded equity securities, fair value | 1,334 | 1,334 | 1,647 | ||
Total debt and publicly traded equity securities, fair value | 1,410 | 1,410 | 1,733 | ||
Unrealized net (gains) losses | 221 | $ (90) | 415 | $ 109 | |
U.S. government and agency securities | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Debt securities, amortized cost | 67 | 67 | 80 | ||
Debt securities, unrealized gains | 0 | 0 | 0 | ||
Debt securities, unrealized losses | 0 | 0 | 0 | ||
Debt securities, fair value | 67 | 67 | 80 | ||
Commercial paper | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Debt securities, amortized cost | 4 | 4 | 0 | ||
Debt securities, unrealized gains | 0 | 0 | 0 | ||
Debt securities, unrealized losses | 0 | 0 | 0 | ||
Debt securities, fair value | 4 | 4 | 0 | ||
Corporate notes and bonds | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Debt securities, amortized cost | 3 | 3 | 4 | ||
Debt securities, unrealized gains | 0 | 0 | 0 | ||
Debt securities, unrealized losses | 0 | 0 | 0 | ||
Debt securities, fair value | 3 | 3 | 4 | ||
Foreign government bonds | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Debt securities, amortized cost | 2 | 2 | 2 | ||
Debt securities, unrealized gains | 0 | 0 | 0 | ||
Debt securities, unrealized losses | 0 | 0 | 0 | ||
Debt securities, fair value | $ 2 | $ 2 | $ 2 |
Financial Instruments - Financi
Financial Instruments - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||||
Investments | $ 76 | $ 86 | ||
Publicly traded equity securities | 1,334 | 1,647 | ||
Derivative assets | 1,508 | 549 | ||
Liabilities | ||||
Contingent consideration | 499 | 777 | $ 902 | $ 841 |
Derivative liabilities | 242 | 121 | ||
Commercial paper | ||||
Assets | ||||
Investments | 4 | 0 | ||
Foreign government bonds | ||||
Assets | ||||
Investments | 2 | 2 | ||
U.S. government and agency securities | ||||
Assets | ||||
Investments | 67 | 80 | ||
Corporate notes and bonds | ||||
Assets | ||||
Investments | 3 | 4 | ||
Fair Value, Measurements, Recurring | ||||
Assets | ||||
Investments | 1,087 | 370 | ||
Other assets | 323 | 1,363 | ||
Derivative assets | 1,508 | 549 | ||
Total assets | 2,918 | 2,282 | ||
Liabilities | ||||
Contingent consideration | 499 | 777 | ||
Derivative liabilities | 242 | 121 | ||
Total liabilities | 741 | 898 | ||
Fair Value, Measurements, Recurring | Foreign exchange contracts | ||||
Assets | ||||
Derivative assets | 945 | 351 | ||
Liabilities | ||||
Derivative liabilities | 242 | 120 | ||
Fair Value, Measurements, Recurring | Interest rate swaps | ||||
Assets | ||||
Derivative assets | 0 | 14 | ||
Fair Value, Measurements, Recurring | Currency options | ||||
Assets | ||||
Derivative assets | 563 | 184 | ||
Liabilities | ||||
Derivative liabilities | 0 | 1 | ||
Fair Value, Measurements, Recurring | Level 1 | ||||
Assets | ||||
Investments | 1,081 | 368 | ||
Other assets | 323 | 1,363 | ||
Derivative assets | 0 | 0 | ||
Total assets | 1,404 | 1,731 | ||
Liabilities | ||||
Contingent consideration | 0 | 0 | ||
Derivative liabilities | 0 | 0 | ||
Total liabilities | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 1 | Foreign exchange contracts | ||||
Assets | ||||
Derivative assets | 0 | 0 | ||
Liabilities | ||||
Derivative liabilities | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 1 | Interest rate swaps | ||||
Assets | ||||
Derivative assets | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 1 | Currency options | ||||
Assets | ||||
Derivative assets | 0 | 0 | ||
Liabilities | ||||
Derivative liabilities | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 2 | ||||
Assets | ||||
Investments | 6 | 2 | ||
Other assets | 0 | 0 | ||
Derivative assets | 1,508 | 549 | ||
Total assets | 1,514 | 551 | ||
Liabilities | ||||
Contingent consideration | 0 | 0 | ||
Derivative liabilities | 242 | 121 | ||
Total liabilities | 242 | 121 | ||
Fair Value, Measurements, Recurring | Level 2 | Foreign exchange contracts | ||||
Assets | ||||
Derivative assets | 945 | 351 | ||
Liabilities | ||||
Derivative liabilities | 242 | 120 | ||
Fair Value, Measurements, Recurring | Level 2 | Interest rate swaps | ||||
Assets | ||||
Derivative assets | 0 | 14 | ||
Fair Value, Measurements, Recurring | Level 2 | Currency options | ||||
Assets | ||||
Derivative assets | 563 | 184 | ||
Liabilities | ||||
Derivative liabilities | 0 | 1 | ||
Fair Value, Measurements, Recurring | Level 3 | ||||
Assets | ||||
Investments | 0 | 0 | ||
Other assets | 0 | 0 | ||
Derivative assets | 0 | 0 | ||
Total assets | 0 | 0 | ||
Liabilities | ||||
Contingent consideration | 499 | 777 | ||
Derivative liabilities | 0 | 0 | ||
Total liabilities | 499 | 777 | ||
Fair Value, Measurements, Recurring | Level 3 | Foreign exchange contracts | ||||
Assets | ||||
Derivative assets | 0 | 0 | ||
Liabilities | ||||
Derivative liabilities | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 3 | Interest rate swaps | ||||
Assets | ||||
Derivative assets | 0 | 0 | ||
Fair Value, Measurements, Recurring | Level 3 | Currency options | ||||
Assets | ||||
Derivative assets | 0 | 0 | ||
Liabilities | ||||
Derivative liabilities | 0 | 0 | ||
Fair Value, Measurements, Recurring | Commercial paper | ||||
Assets | ||||
Investments | 4 | 0 | ||
Fair Value, Measurements, Recurring | Commercial paper | Level 1 | ||||
Assets | ||||
Investments | 0 | 0 | ||
Fair Value, Measurements, Recurring | Commercial paper | Level 2 | ||||
Assets | ||||
Investments | 4 | 0 | ||
Fair Value, Measurements, Recurring | Commercial paper | Level 3 | ||||
Assets | ||||
Investments | 0 | 0 | ||
Fair Value, Measurements, Recurring | Foreign government bonds | ||||
Assets | ||||
Investments | 2 | 2 | ||
Fair Value, Measurements, Recurring | Foreign government bonds | Level 1 | ||||
Assets | ||||
Investments | 0 | 0 | ||
Fair Value, Measurements, Recurring | Foreign government bonds | Level 2 | ||||
Assets | ||||
Investments | 2 | 2 | ||
Fair Value, Measurements, Recurring | Foreign government bonds | Level 3 | ||||
Assets | ||||
Investments | 0 | 0 | ||
Fair Value, Measurements, Recurring | Publicly traded equity securities | ||||
Assets | ||||
Publicly traded equity securities | 1,081 | 368 | ||
Other assets | 253 | 1,279 | ||
Fair Value, Measurements, Recurring | Publicly traded equity securities | Level 1 | ||||
Assets | ||||
Publicly traded equity securities | 1,081 | 368 | ||
Other assets | 253 | 1,279 | ||
Fair Value, Measurements, Recurring | Publicly traded equity securities | Level 2 | ||||
Assets | ||||
Publicly traded equity securities | 0 | 0 | ||
Other assets | 0 | 0 | ||
Fair Value, Measurements, Recurring | Publicly traded equity securities | Level 3 | ||||
Assets | ||||
Publicly traded equity securities | 0 | 0 | ||
Other assets | 0 | 0 | ||
Fair Value, Measurements, Recurring | U.S. government and agency securities | ||||
Assets | ||||
Other assets | 67 | 80 | ||
Fair Value, Measurements, Recurring | U.S. government and agency securities | Level 1 | ||||
Assets | ||||
Other assets | 67 | 80 | ||
Fair Value, Measurements, Recurring | U.S. government and agency securities | Level 2 | ||||
Assets | ||||
Other assets | 0 | 0 | ||
Fair Value, Measurements, Recurring | U.S. government and agency securities | Level 3 | ||||
Assets | ||||
Other assets | 0 | 0 | ||
Fair Value, Measurements, Recurring | Corporate notes and bonds | ||||
Assets | ||||
Other assets | 3 | 4 | ||
Fair Value, Measurements, Recurring | Corporate notes and bonds | Level 1 | ||||
Assets | ||||
Other assets | 3 | 4 | ||
Fair Value, Measurements, Recurring | Corporate notes and bonds | Level 2 | ||||
Assets | ||||
Other assets | 0 | 0 | ||
Fair Value, Measurements, Recurring | Corporate notes and bonds | Level 3 | ||||
Assets | ||||
Other assets | $ 0 | $ 0 |
Financial Instruments - Infor_3
Financial Instruments - Information About Changes in Liabilities for Contingent Consideration (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning balance | $ 777 | $ 841 |
Changes in estimated fair value | (156) | 73 |
Payments | (119) | 0 |
Other | (3) | (12) |
Fair value, ending balance | 499 | 902 |
Contingent consideration | 499 | $ 902 |
Current liability | 139 | |
Sanofi Pasteur | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, ending balance | 358 | |
Contingent consideration | $ 358 | |
Contingent consideration, measurement input, discount rate | 0.115 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 1,683 | $ 1,747 |
Raw materials and work in process | 6,532 | 6,220 |
Supplies | 227 | 196 |
Total (approximates current cost) | 8,442 | 8,163 |
Decrease to LIFO cost | (187) | (16) |
Total current and noncurrent inventories | 8,255 | 8,147 |
Recognized as: | ||
Inventories | 5,614 | 5,953 |
Other assets | $ 2,641 | $ 2,194 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory [Line Items] | ||
Inventories classified in Other assets | $ 2,641 | $ 2,194 |
Inventories Not Expected to be Sold Within One Year | ||
Inventory [Line Items] | ||
Inventories classified in Other assets | 2,200 | 1,900 |
Inventories Produced in Preparation for Product Launches | ||
Inventory [Line Items] | ||
Inventories classified in Other assets | $ 417 | $ 256 |
Other Intangibles (Details)
Other Intangibles (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Indefinite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 21,368 | $ 22,933 |
In Process Research and Development | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Impairment charge | 887 | |
nemtabrutinib | In Process Research and Development | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Impairment charge | 807 | |
Intangible assets | $ 1,200 |
Contingencies (Details)
Contingencies (Details) $ in Millions | 1 Months Ended | 9 Months Ended | |||||
Jan. 09, 2023 | Dec. 19, 2022 | Jun. 30, 2022 claim | Mar. 31, 2014 case | Sep. 30, 2022 USD ($) case claim | Dec. 31, 2021 USD ($) | Aug. 31, 2020 claim | |
Legal Defense Costs | |||||||
Loss Contingencies [Line Items] | |||||||
Legal defense costs reserve | $ | $ 230 | $ 230 | |||||
Zetia antitrust litigation | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, pending claims | claim | 35 | ||||||
Zetia antitrust litigation | Pending Litigation | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, new claims filed | claim | 23 | ||||||
Patent Infringement Lawsuit Against Zydus | Pending Litigation | Forecast | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, recovery from third party, bench trial period | 3 days | ||||||
Fosamax | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, pending claims | 3,450 | ||||||
Fosamax | Femur Fracture Litigation | Federal | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, claims dismissed | 650 | ||||||
Loss contingency, claims on appeal | 515 | ||||||
Januvia | Cases Company Agreed To Toll Statute Of Limitations | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, pending claims | claim | 50 | ||||||
Gardasil/Gardasil 9 | U.S. | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, pending claims | 65 | ||||||
Gardasil/Gardasil 9 | Non-US | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, pending claims | 15 | ||||||
Gardasil/Gardasil 9 | COLOMBIA | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, pending claims | 1 | ||||||
Bridion | Patents | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, claims settled | 5 | ||||||
Bridion | Patents | Pending Litigation | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, pending claims | 2 | ||||||
Bridion | Patents | Pending Litigation | Forecast | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, trial period | 1 day | ||||||
Januvia and Janumet | Patents | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, claims settled | 22 |
Equity - Rollforward Reconcilia
Equity - Rollforward Reconciliations (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common stock, beginning balance (in shares) | 3,577,103,522 | |||
Treasury stock, beginning balance (in shares) | 1,049,499,023 | |||
Equity, beginning balance | $ 43,318 | $ 33,388 | $ 38,257 | $ 25,404 |
Net income attributable to Merck & Co., Inc. | 3,248 | 4,567 | 11,502 | 9,291 |
Other comprehensive income (loss), net of taxes | (416) | 38 | (314) | 1,595 |
Cash dividends declared on common stock | (1,757) | (1,653) | (5,270) | (4,962) |
Treasury stock shares purchased | (583) | (822) | ||
Spin-off of Organon & Co. | 5,091 | |||
Share-based compensation plans and other | 140 | 131 | 356 | 283 |
Net income attributable to noncontrolling interests | 5 | 4 | 6 | 12 |
Distributions attributable to noncontrolling interests | $ (14) | (29) | $ (13) | (29) |
Common stock, ending balance (in shares) | 3,577,103,522 | 3,577,103,522 | ||
Treasury stock, ending balance (in shares) | 1,043,697,097 | 1,043,697,097 | ||
Equity, ending balance | $ 44,524 | $ 35,863 | $ 44,524 | $ 35,863 |
Cash dividends declared on common stock (in dollars per share) | $ 0.69 | $ 0.65 | $ 2.07 | $ 1.95 |
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common stock, beginning balance (in shares) | 3,577,000,000 | 3,577,000,000 | 3,577,000,000 | 3,577,000,000 |
Equity, beginning balance | $ 1,788 | $ 1,788 | $ 1,788 | $ 1,788 |
Common stock, ending balance (in shares) | 3,577,000,000 | 3,577,000,000 | 3,577,000,000 | 3,577,000,000 |
Equity, ending balance | $ 1,788 | $ 1,788 | $ 1,788 | $ 1,788 |
Other Paid-In Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Equity, beginning balance | 44,115 | 44,039 | 44,238 | 39,588 |
Spin-off of Organon & Co. | 4,643 | |||
Share-based compensation plans and other | 128 | 110 | 5 | (82) |
Equity, ending balance | 44,243 | 44,149 | 44,243 | 44,149 |
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Equity, beginning balance | 58,437 | 48,777 | 53,696 | 47,362 |
Net income attributable to Merck & Co., Inc. | 3,248 | 4,567 | 11,502 | 9,291 |
Cash dividends declared on common stock | (1,757) | (1,653) | (5,270) | (4,962) |
Equity, ending balance | 59,928 | 51,691 | 59,928 | 51,691 |
Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Equity, beginning balance | (4,327) | (4,628) | (4,429) | (6,634) |
Other comprehensive income (loss), net of taxes | (416) | 38 | (314) | 1,595 |
Spin-off of Organon & Co. | 449 | |||
Equity, ending balance | $ (4,743) | $ (4,590) | $ (4,743) | $ (4,590) |
Treasury Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Treasury stock, beginning balance (in shares) | 1,044,000,000 | 1,044,000,000 | 1,049,000,000 | 1,047,000,000 |
Equity, beginning balance | $ (56,770) | $ (56,682) | $ (57,109) | $ (56,787) |
Treasury stock shares purchased (in shares) | 8,000,000 | 11,000,000 | ||
Treasury stock shares purchased | $ (583) | $ (822) | ||
Share-based compensation plans and other (in shares) | (5,000,000) | (6,000,000) | ||
Share-based compensation plans and other | $ 12 | $ 21 | $ 351 | $ 365 |
Treasury stock, ending balance (in shares) | 1,044,000,000 | 1,052,000,000 | 1,044,000,000 | 1,052,000,000 |
Equity, ending balance | $ (56,758) | $ (57,244) | $ (56,758) | $ (57,244) |
Non- controlling Interests | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Equity, beginning balance | 75 | 94 | 73 | 87 |
Spin-off of Organon & Co. | (1) | |||
Net income attributable to noncontrolling interests | 5 | 4 | 6 | 12 |
Distributions attributable to noncontrolling interests | (14) | (29) | (13) | (29) |
Equity, ending balance | $ 66 | $ 69 | $ 66 | $ 69 |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefit Plans - Net Benefit Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Other Postretirement Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 11 | $ 11 | $ 36 | $ 37 |
Interest cost | 11 | 12 | 34 | 34 |
Expected return on plan assets | (21) | (20) | (64) | (59) |
Amortization of unrecognized prior service credit | (14) | (16) | (42) | (48) |
Net loss amortization | (11) | (12) | (32) | (30) |
Termination benefits | 0 | 0 | 0 | 37 |
Curtailments | 0 | (1) | (1) | (29) |
Net periodic benefit cost | (24) | (26) | (69) | (58) |
U.S. | Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 91 | 104 | 289 | 302 |
Interest cost | 123 | 102 | 330 | 305 |
Expected return on plan assets | (182) | (188) | (576) | (568) |
Amortization of unrecognized prior service credit | (8) | (9) | (24) | (29) |
Net loss amortization | 10 | 75 | 122 | 218 |
Termination benefits | 1 | 2 | 2 | 54 |
Curtailments | 3 | (1) | 11 | 15 |
Settlements | 79 | 139 | 180 | 139 |
Net periodic benefit cost | 117 | 224 | 334 | 436 |
International | Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 66 | 75 | 213 | 254 |
Interest cost | 35 | 33 | 110 | 92 |
Expected return on plan assets | (93) | (105) | (292) | (313) |
Amortization of unrecognized prior service credit | (3) | (3) | (10) | (12) |
Net loss amortization | 24 | 32 | 73 | 110 |
Termination benefits | 0 | 0 | 1 | 3 |
Curtailments | 0 | 0 | 0 | (27) |
Settlements | 0 | 0 | 0 | 2 |
Net periodic benefit cost | $ 29 | $ 32 | $ 95 | $ 109 |
Pension and Other Postretirem_4
Pension and Other Postretirement Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Retirement Benefits [Abstract] | ||
Increase to pension liabilities due to remeasurement | $ 296 | $ 131 |
Other (Income) Expense, Net - S
Other (Income) Expense, Net - Schedule of Other (Income) Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Component of Other Income / Expense of Nonoperating [Line Items] | ||||
Interest income | $ (40) | $ (7) | $ (62) | $ (27) |
Interest expense | 244 | 196 | 727 | 597 |
Exchange losses | 96 | 46 | 220 | 202 |
Loss (income) from investments in equity securities, net | 371 | (683) | 1,361 | (1,535) |
Net periodic defined benefit plan (credit) cost other than service cost | (60) | 40 | (208) | (159) |
Other, net | (182) | (42) | (462) | (85) |
Other (income) expense, net | 429 | (450) | 1,576 | (1,007) |
Unrealized net (gains) losses | $ 221 | $ (90) | $ 415 | $ 109 |
Other (Income) Expense, Net - N
Other (Income) Expense, Net - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Other Income and Expenses [Abstract] | ||
Interest paid | $ 660 | $ 570 |
Taxes on Income (Details)
Taxes on Income (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Examination [Line Items] | |||||
Effective income tax rate | 9.20% | 13.20% | 11% | 14.40% | |
Tax benefit resulting from acquisition | $ 0 | $ 0 | |||
Internal Revenue Service (IRS) | Domestic Tax Authority | |||||
Income Tax Examination [Line Items] | |||||
Tax benefit recognized related to settlement | 236,000,000 | ||||
Income taxes paid | $ 190,000,000 | ||||
Internal Revenue Service (IRS) | Domestic Tax Authority | Continuing Operations | |||||
Income Tax Examination [Line Items] | |||||
Tax benefit recognized related to settlement | 207,000,000 | ||||
Income taxes paid | 172,000,000 | ||||
Internal Revenue Service (IRS) | Domestic Tax Authority | Discontinued Operations | |||||
Income Tax Examination [Line Items] | |||||
Tax benefit recognized related to settlement | $ 29,000,000 | ||||
Income taxes paid | $ 18,000,000 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculations of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net Income from Continuing Operations Attributable to Merck & Co., Inc. | $ 3,248 | $ 4,567 | $ 11,502 | $ 8,525 |
Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests | 0 | 0 | 0 | 766 |
Net income attributable to Merck & Co., Inc., basic | 3,248 | 4,567 | 11,502 | 9,291 |
Net income attributable to Merck & Co., Inc., diluted | $ 3,248 | $ 4,567 | $ 11,502 | $ 9,291 |
Average common shares outstanding (in shares) | 2,533 | 2,530 | 2,531 | 2,531 |
Common shares issuable (in shares) | 9 | 6 | 9 | 8 |
Average common shares outstanding assuming dilution (in shares) | 2,542 | 2,536 | 2,540 | 2,539 |
Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders: | ||||
Income from Continuing Operations (in dollars per share) | $ 1.28 | $ 1.81 | $ 4.55 | $ 3.37 |
Income from Discontinued Operations (in dollars per share) | 0 | 0 | 0 | 0.30 |
Net Income (in dollars per share) | 1.28 | 1.81 | 4.55 | 3.67 |
Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders: | ||||
Income from Continuing Operations (in dollars per share) | 1.28 | 1.80 | 4.53 | 3.36 |
Income from Discontinued Operations (in dollars per share) | 0 | 0 | 0 | 0.30 |
Net Income (in dollars per share) | $ 1.28 | $ 1.80 | $ 4.53 | $ 3.66 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Antidilutive shares (in shares) | 2 | 8 | 5 | 10 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Equity, beginning balance | $ 43,318 | $ 33,388 | $ 38,257 | $ 25,404 |
Other comprehensive income (loss) before reclassification adjustments, pretax | (230) | (48) | 107 | 1,765 |
Tax | (31) | 12 | (223) | (510) |
Other comprehensive income (loss) before reclassification adjustments, net of taxes | (261) | (36) | (116) | 1,255 |
Reclassification adjustments, pretax | (177) | 104 | (227) | 428 |
Tax | 22 | (30) | 29 | (88) |
Reclassification adjustments, net of taxes | (155) | 74 | (198) | 340 |
Other comprehensive income (loss), net of taxes | (416) | 38 | (314) | 1,595 |
Spin-off of Organon & Co. | 5,091 | |||
Equity, ending balance | 44,524 | 35,863 | 44,524 | 35,863 |
Derivatives | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Equity, beginning balance | 390 | (26) | 144 | (266) |
Other comprehensive income (loss) before reclassification adjustments, pretax | 682 | 72 | 1,233 | 193 |
Tax | (143) | (16) | (259) | (41) |
Other comprehensive income (loss) before reclassification adjustments, net of taxes | 539 | 56 | 974 | 152 |
Reclassification adjustments, pretax | (254) | 36 | (493) | 218 |
Tax | 53 | (8) | 103 | (46) |
Reclassification adjustments, net of taxes | (201) | 28 | (390) | 172 |
Other comprehensive income (loss), net of taxes | 338 | 84 | 584 | 324 |
Spin-off of Organon & Co. | 0 | |||
Equity, ending balance | 728 | 58 | 728 | 58 |
Employee Benefit Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Equity, beginning balance | (2,465) | (3,028) | (2,743) | (4,540) |
Other comprehensive income (loss) before reclassification adjustments, pretax | (294) | (24) | (125) | 1,739 |
Tax | 62 | 16 | 25 | (385) |
Other comprehensive income (loss) before reclassification adjustments, net of taxes | (232) | (8) | (100) | 1,354 |
Reclassification adjustments, pretax | 77 | 68 | 266 | 210 |
Tax | (31) | (22) | (74) | (42) |
Reclassification adjustments, net of taxes | 46 | 46 | 192 | 168 |
Other comprehensive income (loss), net of taxes | (186) | 38 | 92 | 1,522 |
Spin-off of Organon & Co. | 28 | |||
Equity, ending balance | (2,651) | (2,990) | (2,651) | (2,990) |
Foreign Currency Translation Adjustment | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Equity, beginning balance | (2,252) | (1,574) | (1,830) | (1,828) |
Other comprehensive income (loss) before reclassification adjustments, pretax | (618) | (96) | (1,001) | (167) |
Tax | 50 | 12 | 11 | (84) |
Other comprehensive income (loss) before reclassification adjustments, net of taxes | (568) | (84) | (990) | (251) |
Reclassification adjustments, pretax | 0 | 0 | 0 | 0 |
Tax | 0 | 0 | 0 | 0 |
Reclassification adjustments, net of taxes | 0 | 0 | 0 | 0 |
Other comprehensive income (loss), net of taxes | (568) | (84) | (990) | (251) |
Spin-off of Organon & Co. | 421 | |||
Equity, ending balance | (2,820) | (1,658) | (2,820) | (1,658) |
Accumulated Other Comprehensive Loss | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Equity, beginning balance | (4,327) | (4,628) | (4,429) | (6,634) |
Spin-off of Organon & Co. | 449 | |||
Equity, ending balance | $ (4,743) | $ (4,590) | $ (4,743) | $ (4,590) |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) $ in Billions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | segment | 2 | |||
Sales discounts | $ | $ 3.3 | $ 3.1 | $ 9.1 | $ 9.1 |
Segment Reporting - Sales from
Segment Reporting - Sales from Products (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 14,959 | $ 13,154 | $ 45,453 | $ 35,183 |
Revenue related to the sale of the marketing rights | 156 | 191 | ||
U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 7,322 | 6,276 | 20,927 | 16,166 |
Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 7,637 | 6,878 | 24,526 | 19,017 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 14,334 | 12,913 | 44,146 | 35,021 |
Operating Segments | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 7,095 | 6,137 | 20,544 | 15,974 |
Operating Segments | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 7,239 | 6,777 | 23,601 | 19,047 |
Corporate, Non-Segment | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 625 | 241 | 1,307 | 162 |
Corporate, Non-Segment | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 227 | 139 | 383 | 192 |
Corporate, Non-Segment | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 398 | 101 | 925 | (30) |
Pharmaceutical | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 12,963 | 11,496 | 39,826 | 30,714 |
Pharmaceutical | Operating Segments | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 6,620 | 5,670 | 19,119 | 14,611 |
Pharmaceutical | Operating Segments | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 6,343 | 5,826 | 20,707 | 16,103 |
Pharmaceutical | Operating Segments | Keytruda | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 5,426 | 4,534 | 15,487 | 12,609 |
Pharmaceutical | Operating Segments | Keytruda | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 3,331 | 2,580 | 9,307 | 7,108 |
Pharmaceutical | Operating Segments | Keytruda | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2,095 | 1,954 | 6,180 | 5,501 |
Pharmaceutical | Operating Segments | Alliance revenue - Lynparza | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 284 | 246 | 825 | 721 |
Pharmaceutical | Operating Segments | Alliance revenue - Lynparza | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 144 | 129 | 427 | 371 |
Pharmaceutical | Operating Segments | Alliance revenue - Lynparza | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 140 | 117 | 397 | 350 |
Pharmaceutical | Operating Segments | Alliance revenue - Lenvima | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 202 | 188 | 660 | 498 |
Pharmaceutical | Operating Segments | Alliance revenue - Lenvima | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 142 | 114 | 426 | 287 |
Pharmaceutical | Operating Segments | Alliance revenue - Lenvima | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 60 | 74 | 235 | 211 |
Pharmaceutical | Operating Segments | Alliance Revenue - Reblozyl | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 39 | 0 | 124 | 0 |
Pharmaceutical | Operating Segments | Alliance Revenue - Reblozyl | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 32 | 0 | 87 | 0 |
Pharmaceutical | Operating Segments | Alliance Revenue - Reblozyl | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 7 | 0 | 37 | 0 |
Pharmaceutical | Operating Segments | Gardasil/Gardasil 9 | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2,294 | 1,993 | 5,428 | 4,144 |
Pharmaceutical | Operating Segments | Gardasil/Gardasil 9 | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 957 | 839 | 1,803 | 1,605 |
Pharmaceutical | Operating Segments | Gardasil/Gardasil 9 | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,337 | 1,154 | 3,624 | 2,539 |
Pharmaceutical | Operating Segments | ProQuad/M-M-R II/Varivax | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 668 | 661 | 1,716 | 1,626 |
Pharmaceutical | Operating Segments | ProQuad/M-M-R II/Varivax | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 532 | 537 | 1,337 | 1,255 |
Pharmaceutical | Operating Segments | ProQuad/M-M-R II/Varivax | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 136 | 125 | 379 | 371 |
Pharmaceutical | Operating Segments | RotaTeq | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 256 | 227 | 644 | 593 |
Pharmaceutical | Operating Segments | RotaTeq | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 154 | 135 | 427 | 364 |
Pharmaceutical | Operating Segments | RotaTeq | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 102 | 92 | 218 | 229 |
Pharmaceutical | Operating Segments | Pneumovax 23 | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 131 | 277 | 457 | 600 |
Pharmaceutical | Operating Segments | Pneumovax 23 | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 68 | 181 | 280 | 354 |
Pharmaceutical | Operating Segments | Pneumovax 23 | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 63 | 97 | 177 | 247 |
Pharmaceutical | Operating Segments | Vaqta | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 64 | 48 | 134 | 138 |
Pharmaceutical | Operating Segments | Vaqta | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 27 | 32 | 72 | 80 |
Pharmaceutical | Operating Segments | Vaqta | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 36 | 16 | 62 | 58 |
Pharmaceutical | Operating Segments | Bridion | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 423 | 369 | 1,244 | 1,096 |
Pharmaceutical | Operating Segments | Bridion | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 233 | 181 | 665 | 545 |
Pharmaceutical | Operating Segments | Bridion | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 190 | 188 | 579 | 551 |
Pharmaceutical | Operating Segments | Prevymis | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 114 | 96 | 310 | 270 |
Pharmaceutical | Operating Segments | Prevymis | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 49 | 39 | 136 | 111 |
Pharmaceutical | Operating Segments | Prevymis | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 64 | 57 | 174 | 159 |
Pharmaceutical | Operating Segments | Dificid | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 77 | 54 | 196 | 115 |
Pharmaceutical | Operating Segments | Dificid | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 72 | 52 | 184 | 108 |
Pharmaceutical | Operating Segments | Dificid | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 6 | 2 | 12 | 7 |
Pharmaceutical | Operating Segments | Primaxin | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 63 | 70 | 185 | 194 |
Pharmaceutical | Operating Segments | Primaxin | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 0 | 1 | 0 |
Pharmaceutical | Operating Segments | Primaxin | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 63 | 69 | 185 | 194 |
Pharmaceutical | Operating Segments | Noxafil | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 62 | 64 | 180 | 197 |
Pharmaceutical | Operating Segments | Noxafil | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 13 | 19 | 39 | 48 |
Pharmaceutical | Operating Segments | Noxafil | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 49 | 45 | 141 | 149 |
Pharmaceutical | Operating Segments | Invanz | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 50 | 53 | 148 | 157 |
Pharmaceutical | Operating Segments | Invanz | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2 | (2) | 4 | (2) |
Pharmaceutical | Operating Segments | Invanz | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 48 | 55 | 144 | 159 |
Pharmaceutical | Operating Segments | Cancidas | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 43 | 56 | 138 | 168 |
Pharmaceutical | Operating Segments | Cancidas | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1 | 1 | 5 | 4 |
Pharmaceutical | Operating Segments | Cancidas | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 42 | 56 | 133 | 164 |
Pharmaceutical | Operating Segments | Zerbaxa | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 43 | (2) | 120 | (11) |
Pharmaceutical | Operating Segments | Zerbaxa | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 24 | (1) | 64 | (5) |
Pharmaceutical | Operating Segments | Zerbaxa | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 19 | (1) | 55 | (6) |
Pharmaceutical | Operating Segments | Alliance revenue - Adempas/Verquvo | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 88 | 100 | 258 | 248 |
Pharmaceutical | Operating Segments | Alliance revenue - Adempas/Verquvo | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 85 | 73 | 244 | 222 |
Pharmaceutical | Operating Segments | Alliance revenue - Adempas/Verquvo | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 3 | 27 | 14 | 26 |
Pharmaceutical | Operating Segments | Adempas | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 57 | 59 | 181 | 188 |
Pharmaceutical | Operating Segments | Adempas | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Pharmaceutical | Operating Segments | Adempas | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 57 | 59 | 181 | 188 |
Pharmaceutical | Operating Segments | Lagevrio | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 436 | 0 | 4,859 | 0 |
Pharmaceutical | Operating Segments | Lagevrio | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 0 | 1,523 | 0 |
Pharmaceutical | Operating Segments | Lagevrio | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 436 | 0 | 3,336 | 0 |
Pharmaceutical | Operating Segments | Isentress/Isentress HD | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 161 | 189 | 466 | 590 |
Pharmaceutical | Operating Segments | Isentress/Isentress HD | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 68 | 77 | 196 | 222 |
Pharmaceutical | Operating Segments | Isentress/Isentress HD | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 93 | 112 | 270 | 368 |
Pharmaceutical | Operating Segments | Belsomra | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 62 | 81 | 199 | 238 |
Pharmaceutical | Operating Segments | Belsomra | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 20 | 23 | 60 | 56 |
Pharmaceutical | Operating Segments | Belsomra | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 42 | 58 | 139 | 183 |
Pharmaceutical | Operating Segments | Simponi | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 173 | 203 | 540 | 619 |
Pharmaceutical | Operating Segments | Simponi | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Pharmaceutical | Operating Segments | Simponi | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 173 | 203 | 540 | 619 |
Pharmaceutical | Operating Segments | Remicade | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 49 | 73 | 163 | 233 |
Pharmaceutical | Operating Segments | Remicade | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Pharmaceutical | Operating Segments | Remicade | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 49 | 73 | 163 | 233 |
Pharmaceutical | Operating Segments | Januvia | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 717 | 852 | 2,252 | 2,445 |
Pharmaceutical | Operating Segments | Januvia | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 332 | 365 | 958 | 997 |
Pharmaceutical | Operating Segments | Januvia | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 385 | 487 | 1,294 | 1,448 |
Pharmaceutical | Operating Segments | Janumet | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 417 | 487 | 1,347 | 1,449 |
Pharmaceutical | Operating Segments | Janumet | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 90 | 86 | 258 | 244 |
Pharmaceutical | Operating Segments | Janumet | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 327 | 401 | 1,089 | 1,205 |
Pharmaceutical | Operating Segments | Other pharmaceutical | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 564 | 518 | 1,565 | 1,589 |
Pharmaceutical | Operating Segments | Other pharmaceutical | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 244 | 210 | 616 | 637 |
Pharmaceutical | Operating Segments | Other pharmaceutical | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 321 | 306 | 949 | 950 |
Animal Health | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,371 | 1,417 | 4,320 | 4,307 |
Animal Health | Operating Segments | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 475 | 467 | 1,425 | 1,363 |
Animal Health | Operating Segments | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 896 | 951 | 2,894 | 2,944 |
Animal Health | Operating Segments | Livestock | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 829 | 864 | 2,486 | 2,503 |
Animal Health | Operating Segments | Livestock | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 186 | 190 | 521 | 508 |
Animal Health | Operating Segments | Livestock | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 643 | 675 | 1,965 | 1,996 |
Animal Health | Operating Segments | Companion Animals | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 542 | 553 | 1,834 | 1,804 |
Animal Health | Operating Segments | Companion Animals | U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 289 | 277 | 904 | 855 |
Animal Health | Operating Segments | Companion Animals | Int’l | ||||
Segment Reporting Information [Line Items] | ||||
Sales | $ 253 | $ 276 | $ 929 | $ 948 |
Segment Reporting - Consolidate
Segment Reporting - Consolidated Sales by Geographic Area (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue from External Customer [Line Items] | ||||
Sales | $ 14,959 | $ 13,154 | $ 45,453 | $ 35,183 |
United States | ||||
Revenue from External Customer [Line Items] | ||||
Sales | 7,322 | 6,276 | 20,927 | 16,166 |
Europe, Middle East and Africa | ||||
Revenue from External Customer [Line Items] | ||||
Sales | 3,286 | 3,342 | 11,228 | 9,912 |
China | ||||
Revenue from External Customer [Line Items] | ||||
Sales | 1,442 | 1,307 | 3,957 | 3,004 |
Japan | ||||
Revenue from External Customer [Line Items] | ||||
Sales | 673 | 638 | 2,776 | 1,929 |
Asia Pacific (other than China and Japan) | ||||
Revenue from External Customer [Line Items] | ||||
Sales | 854 | 613 | 2,792 | 1,782 |
Latin America | ||||
Revenue from External Customer [Line Items] | ||||
Sales | 684 | 599 | 1,933 | 1,631 |
Other | ||||
Revenue from External Customer [Line Items] | ||||
Sales | $ 698 | $ 379 | $ 1,840 | $ 759 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Profits to Income before Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Profits | $ 3,583 | $ 5,266 | $ 12,931 | $ 9,970 |
Interest income | 40 | 7 | 62 | 27 |
Interest expense | (244) | (196) | (727) | (597) |
Amortization | (1,623) | (1,231) | ||
Depreciation | (1,394) | (1,148) | ||
Research and development | (4,399) | (2,445) | (9,773) | (9,177) |
Restructuring costs | (94) | (107) | (288) | (487) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Profits | 10,105 | 9,111 | 29,935 | 24,079 |
Operating Segments | Pharmaceutical segment | ||||
Segment Reporting Information [Line Items] | ||||
Profits | 9,590 | 8,606 | 28,263 | 22,450 |
Operating Segments | Animal Health segment | ||||
Segment Reporting Information [Line Items] | ||||
Profits | 515 | 505 | 1,672 | 1,629 |
Corporate, Non-Segment | ||||
Segment Reporting Information [Line Items] | ||||
Profits | 377 | 141 | 831 | 29 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Interest income | 40 | 7 | 62 | 27 |
Interest expense | (244) | (196) | (727) | (597) |
Amortization | (460) | (360) | (1,623) | (1,231) |
Depreciation | (448) | (358) | (1,257) | (1,031) |
Research and development | (4,277) | (2,312) | (9,374) | (8,775) |
Restructuring costs | (94) | (107) | (288) | (487) |
Other unallocated, net | $ (1,416) | $ (660) | $ (4,628) | $ (2,044) |