v3.25.4
Segment Reporting
 12 Months Ended
Dec. 31, 2025
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
The Company’s operations are principally managed on a product basis and include two operating segments, Pharmaceutical and Animal Health, both of which are reportable segments.
The Pharmaceutical segment includes human health pharmaceutical and vaccine products. Human health pharmaceutical products consist of therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. The Company sells these human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies, and managed health care providers such as health maintenance organizations, pharmacy benefit managers and other institutions. Human health vaccine products consist of preventive pediatric, adolescent and adult vaccines. The Company sells these human health vaccines primarily to physicians, wholesalers, distributors and government entities. A large component of pediatric and adolescent vaccine sales are made to the U.S. Centers for Disease Control and Prevention Vaccines for Children program, which is funded by the U.S. government. Additionally, the Company sells vaccines to the Federal government for placement into vaccine stockpiles.
The Animal Health segment discovers, develops, manufactures and markets a wide range of veterinary pharmaceutical and vaccine products, as well as health management solutions and services, for the prevention, treatment and control of disease in all major livestock and companion animal species. The Company also offers an extensive suite of digitally connected identification, traceability and monitoring products. The Company sells its products to veterinarians, distributors, animal producers, farmers and pet owners.
Sales of the Company’s products were as follows:
Years Ended December 31202520242023
U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$18,829 $12,812 $31,641 $17,872 $11,610 $29,482 $15,114 $9,897 $25,011 
Keytruda Qlex
38 2 40 — — — — — — 
Alliance revenue - Lynparza (1)
683 767 1,450 626 685 1,311 607 592 1,199 
Alliance revenue - Lenvima (1)
737 316 1,053 705 305 1,010 657 303 960 
Welireg603 113 716 466 43 509 209 10 218 
Alliance revenue - Reblozyl (2)
432 93 525 303 68 371 168 43 212 
Vaccines
Gardasil/Gardasil 9
2,641 2,592 5,233 2,425 6,158 8,583 2,083 6,803 8,886 
ProQuad/M-M-R II/Varivax1,885 566 2,451 1,919 566 2,485 1,837 531 2,368 
Vaxneuvance459 366 825 461 347 808 561 103 665 
Capvaxive
730 29 759 96 1 97 — — — 
RotaTeq426 246 673 472 239 711 493 276 769 
Pneumovax 23
21 146 166 56 207 263 127 285 412 
Hospital Acute Care
Bridion1,631 209 1,841 1,401 363 1,764 1,156 686 1,842 
Prevymis475 503 978 371 414 785 264 341 605 
Zerbaxa186 126 312 146 106 252 119 100 218 
Dificid202 45 247 303 37 340 274 28 302 
Cardiometabolic and Respiratory
Winrevair
1,358 85 1,443 408 11 419 — — — 
Alliance revenue - Adempas/Verquvo (3)
421 49 470 388 27 415 350 16 367 
Adempas— 312 312 — 287 287 — 255 255 
Ohtuvayre
178 — 178 — — — — — — 
Virology
Lagevrio101 278 380 176 787 964 10 1,418 1,428 
Isentress/Isentress HD181 144 325 185 209 394 215 268 483 
Delstrigo
56 250 306 56 193 249 49 152 201 
Pifeltro
111 59 171 113 50 163 101 41 142 
Neuroscience
Belsomra82 104 186 72 150 222 81 150 231 
Immunology
Simponi— — — — 543 543 — 710 710 
Remicade— — — — 114 114 — 187 187 
Diabetes
Januvia999 605 1,604 469 865 1,334 1,151 1,039 2,189 
Janumet268 672 940 161 774 935 223 954 1,177 
Other pharmaceutical (4)
676 2,244 2,917 640 1,951 2,590 690 1,856 2,546 
Total Pharmaceutical segment sales34,409 23,733 58,142 30,290 27,110 57,400 26,539 27,044 53,583 
Animal Health:
Livestock807 3,089 3,896 732 2,729 3,462 700 2,637 3,337 
Companion Animal1,146 1,312 2,458 1,129 1,287 2,415 1,104 1,184 2,288 
Total Animal Health segment sales1,953 4,401 6,354 1,861 4,016 5,877 1,804 3,821 5,625 
Total segment sales36,362 28,134 64,496 32,151 31,126 63,277 28,343 30,865 59,208 
Other (5)
148 367 515 126 765 891 137 770 907 
 $36,510 $28,501 $65,011 $32,277 $31,891 $64,168 $28,480 $31,635 $60,115 
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 (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. Also reflects total alliance revenue for Koselugo of $436 million, $170 million, and $97 million in 2025, 2024 and 2023, respectively (see Note 4).
(5)    Other is primarily comprised of miscellaneous corporate revenue, including revenue hedging activities which (decreased) increased sales by $(127) million, $195 million and $244 million in 2025, 2024 and 2023, respectively, as well as revenue from third-party manufacturing arrangements (including sales to Organon & Co.). Other for 2025, 2024 and 2023 also includes $138 million, $106 million and $118 million, respectively, related to upfront and milestone payments received by Merck for out-licensing arrangements.
Consolidated sales by geographic area where derived are as follows:
Years Ended December 31202520242023
United States$36,510 $32,277 $28,480 
Europe, Middle East and Africa14,580 14,041 13,254 
Latin America3,410 3,459 3,086 
Asia Pacific (other than Japan and China)
2,983 3,058 3,225 
Japan2,711 3,280 3,164 
China1,939 5,494 6,802 
Other2,878 2,559 2,104 
 $65,011 $64,168 $60,115 
A reconciliation of segment profits to Income Before Taxes is as follows:
Years Ended December 31202520242023
Pharma-ceutical
Animal Health
Total
Pharma-ceutical
Animal Health
Total
Pharma-ceutical
Animal Health
Total
Segment sales
$58,142 $6,354 $64,496 $57,400 $5,877 $63,277 $53,583 $5,625 $59,208 
Less segment costs: (1)
Cost of sales
6,679 2,649 6,828 2,469 8,849 2,498 
Selling, general and administrative
5,874 1,125 6,128 1,084 5,903 1,038 
Research and development (2)
— 448 — 385 — 353 
Other segment items (3)
(165)1 (89)1 (49)(1)
Total segment profits45,754 2,131 47,885 44,533 1,938 46,471 38,880 1,737 40,617 
Other profits251 492 474 
Unallocated:
Interest income343 415 365 
Interest expense(1,357)(1,271)(1,146)
Amortization(2,793)(2,395)(2,044)
Depreciation(2,758)(1,843)(1,625)
Research and development(14,987)(17,350)(30,008)
Restructuring costs(889)(309)(599)
Charge for Zetia antitrust litigation settlements— — (573)
Other unallocated, net(4,628)(4,274)(3,572)
$21,067 $19,936 $1,889 
(1)    The significant expense categories and amounts align with the segment level information that is regularly provided to the chief operating decision maker.
(2)    Human health-related research and development expenses incurred by Merck Research Laboratories are not allocated to segment profits as noted below.
(3)    Includes equity (income) loss from affiliates and other miscellaneous non-operating expenses.

Pharmaceutical segment profits consist of segment sales less standard costs, as well as selling, general and administrative expenses directly incurred by the segment. Animal Health segment profits consist of segment sales, less all cost of sales, as well as selling, general and administrative expenses and research and development costs directly incurred by the segment. The chief operating decision maker (Merck’s Chief Executive Officer) uses segment profit for the purpose of evaluating performance, allocating resources, informing incentive compensation targets and setting strategic Company goals during the planning and forecasting process. On a quarterly basis, the CEO considers forecast-to-actual variances in segment profit when assessing performance of the segments and making decisions about allocating resources to the segments. For internal management reporting presented to the chief operating decision maker, Merck does not allocate the remaining cost of sales not included in segment profits as described above, research and development expenses incurred by Merck Research Laboratories, the Company’s research and development division that focuses on human health-related activities, or general and administrative expenses not directly incurred by the segments, nor the cost of financing these activities. Separate divisions maintain responsibility for monitoring and managing these costs, including depreciation related to fixed assets utilized by these divisions and, therefore, they are not included in segment profits. In addition, costs related to restructuring activities, as well as the amortization of intangible assets and the recognition of fair value step-up of inventories are not allocated to segments.
Other profits are primarily comprised of miscellaneous corporate profits, as well as operating profits (losses) related to third-party manufacturing arrangements.
Other unallocated, net, includes expenses from corporate and manufacturing cost centers, intangible asset impairment charges, gains or losses on sales of businesses, expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration, and other miscellaneous income or expense items.
Equity income from affiliates and depreciation included in segment profits is as follows:
PharmaceuticalAnimal HealthTotal
Year Ended December 31, 2025
Equity income from affiliates$190 $— $190 
Depreciation5 282 287 
Year Ended December 31, 2024
Equity income from affiliates$144 $— $144 
Depreciation5 256 261 
Year Ended December 31, 2023
Equity income from affiliates
$111 $— $111 
Depreciation5 198 203 
Property, plant and equipment, net, by geographic area where located is as follows:
December 31202520242023
United States$15,021 $14,724 $13,915 
Europe, Middle East and Africa8,856 7,548 7,562 
Asia Pacific (other than China and Japan)898 982 1,022 
China218 202 193 
Japan144 143 133 
Latin America128 133 222 
Other51 47 4 
 $25,316 $23,779 $23,051 
The Company does not disaggregate assets on a products and services basis for internal management reporting and, therefore, such information is not presented.