v3.25.4
Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Effect of Net Investment Hedges
The effects of the Company’s net investment hedges on OCI and the Consolidated Statement of Income are shown below:
Amount of Pretax Loss (Gain) Recognized in Other Comprehensive Income (1)
Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing
Years Ended December 31202520242023202520242023
Net Investment Hedging Relationships
Foreign exchange contracts$32 $(30)$— $(15)$(4)$1 
Euro-denominated notes591 (192)105 — — — 
(1)    No amounts were reclassified from AOCL into income related to the sale of a subsidiary.
Schedule of Interest Rate Derivatives
At December 31, 2025, the Company was a party to seven pay-floating, receive-fixed interest rate swap contracts designated as fair value hedges of a portion of fixed-rate notes as detailed in the table below.
Par Value of DebtNumber of Interest Rate Swaps HeldTotal Swap Notional Amount
4.50% notes due 2033
$1,500 6 $1,500 
5.00% notes due 2053
1,500 1 250 
Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position
The table below presents the location of amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges as of December 31:
Carrying Amount of Hedged Liabilities
Cumulative Amount of Fair Value Hedging Adjustment Increase Included in the Carrying Amount
2025202420252024
Balance Sheet Caption
Long-Term Debt $1,810 $1,509 $70 $17 
Schedule of 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 as of December 31:
  20252024
  Fair Value of
Derivative		U.S. Dollar
Notional		Fair Value of
Derivative		U.S. Dollar
Notional
 AssetLiabilityAssetLiability
Derivatives Designated as Hedging InstrumentsBalance Sheet Caption      
Interest rate swap contracts
Other Assets
$71 $— $1,750 $17 $— $1,500 
Foreign exchange contractsOther current assets113 — 6,430 323 — 8,662 
Foreign exchange contractsOther Assets32 — 1,793 66 — 2,125 
Foreign exchange contractsAccrued and other current liabilities— 131 4,726 — 1 162 
Foreign exchange contractsOther Noncurrent Liabilities— 1 13 — 1 16 
  $216 $132 $14,712 $406 $2 $12,465 
Derivatives Not Designated as Hedging InstrumentsBalance Sheet Caption      
Foreign exchange contractsOther current assets$107 $— $11,643 $323 $— $12,544 
Foreign exchange contractsAccrued and other current liabilities— 191 13,579 — 343 13,551 
Foreign exchange contractsOther Noncurrent Liabilities— 1 357 — — — 
  $107 $192 $25,579 $323 $343 $26,095 
  $323 $324 $40,291 $729 $345 $38,560 
Schedule of 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 as of December 31:
20252024
AssetLiabilityAssetLiability
Gross amounts recognized in the consolidated balance sheet$323 $324 $729 $345 
Gross amounts subject to offset in master netting arrangements not offset in the consolidated balance sheet(245)(245)(299)(299)
Cash collateral received
(1)— (165)— 
Net amounts$77 $79 $265 $46 
Schedule of Location and Pretax Gain or Loss Amounts for 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:
Years Ended December 31202520242023202520242023202520242023
Financial Statement Caption in which Effects of Fair Value or Cash Flow Hedges are RecordedSales
Other (income) expense, net (1)
Other comprehensive income (loss)
$65,011 $64,168 $60,115 $151 $(24)$466 $658 $216 $(393)
Loss (gain) on fair value hedging relationships:
Interest rate swap contracts
Hedged items— — — 53 (39)56 — — — 
Derivatives designated as hedging instruments— — — (54)39 (57)— — — 
Impact of cash flow hedging relationships:
Foreign exchange contracts
Amount of (loss) gain recognized in OCI on derivatives
— — — — — — (577)508 114 
(Decrease) increase in Sales as a result of AOCL reclassifications
(106)167 249 — — — 106 (167)(249)
Interest rate contracts
Amount of gain recognized in Other (income) expense, net on derivatives
— — — (1)(1)(1)— — — 
Amount of gain (loss) recognized in OCI on derivatives
— — — — — — 28 (1)13 
(1)    Interest expense is a component of Other (income) expense, net.
Schedule of Income Statement Effects of Derivatives Not Designated as Hedging Instruments
The table below provides information regarding the income statement effects of derivatives not designated as hedging instruments:
Amount of Derivative Pretax (Gain) Loss Recognized in Income
Years Ended December 31202520242023
Derivatives Not Designated as Hedging InstrumentsIncome Statement Caption
Foreign exchange contracts (1)
Other (income) expense, net$(196)$251 $(6)
Foreign exchange contracts (2)
Sales21 (28)5 
(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.
(2)     These derivative contracts serve as economic hedges of forecasted transactions.
Schedule of Information on Investments in Debt and Equity Securities
Information on investments in debt and equity securities at December 31 is as follows:
 
 20252024
 Amortized
Cost		Gross UnrealizedFair
Value		Amortized
Cost		Gross UnrealizedFair
Value
GainsLossesGainsLosses
U.S. government and agency securities$100 $— $— $100 $188 $— $— $188 
Foreign government bonds
1 — — 1 — — — — 
Commercial paper— — — — 348 — — 348 
Total debt securities$101 $— $— $101 $536 $— $— $536 
Publicly traded equity securities (1)
1,392 920 
Total debt and publicly traded equity securities$1,493 $1,456 
(1)    Unrealized net gains of $474 million were recorded in Other (income) expense, net in 2025 on equity securities still held at December 31, 2025. Unrealized net losses of $30 million were recorded in Other (income) expense, net in 2024 on equity securities still held at December 31, 2024.
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Financial assets and liabilities measured at fair value on a recurring basis at December 31 are summarized below:
 Fair Value Measurements UsingFair Value Measurements Using
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
  20252024
Assets
Investments
Foreign government bonds
$— $1 $— $1 $— $— $— $— 
Commercial paper— — — — — 348 — 348 
U.S. government and agency securities— — — — — 99 — 99 
Publicly traded equity securities955 — — 955 463 — — 463 
 955 1 — 956 463 447 — 910 
Other assets (1)
U.S. government and agency securities100 — — 100 89 — — 89 
Publicly traded equity securities (2)
437 — — 437 457 — — 457 
537 — — 537 546 — — 546 
Derivative assets (3)
Forward exchange contracts— 168 — 168 — 499 — 499 
Purchased currency options— 84 — 84 — 213 — 213 
Interest rate swaps— 71 — 71 — 17 — 17 
 — 323 — 323 — 729 — 729 
Total assets$1,492 $324 $— $1,816 $1,009 $1,176 $— $2,185 
Liabilities
Other liabilities
Contingent consideration$— $— $— $— $— $— $193 $193 
Derivative liabilities (3)
Forward exchange contracts— 293 — 293 — 338 — 338 
Written currency options— 31 — 31 — 7 — 7 
— 324 — 324 — 345 — 345 
Total liabilities$— $324 $— $324 $— $345 $193 $538 
(1)    Investments included in other assets are restricted as to use, including for the payment of benefits under employee benefit plans.
(2)    Balance at December 31, 2024 includes securities with an aggregate fair value of $81 million, which were subject to a contractual sale restriction that expired in April 2025.
(3)    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.
Schedule of Summarized 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:
20252024
Fair value January 1$193 $354 
Changes in estimated fair value (1)
(52)(10)
Payments (2)
(141)(151)
Fair value December 31
$— $193 
(1)    Recorded in Cost of sales, Research and development expenses, and Other (income) expense, net. Includes cumulative translation adjustments. Amount in 2025 includes the reversal of $45 million for a Zerbaxa (ceftolozane and tazobactam) sales-based milestone as it was determined that payment was not probable.
(2)    Amount in both periods reflects payments related to the 2016 termination of the Sanofi Pasteur MSD joint venture. Amount in 2025 also includes a $25 million payment related to the achievement of a sales-based milestone for Zerbaxa and amount in 2024 also includes a $25 million payment related to the first commercial sale of Lyfnua (gefapixant) in the European Union.