v3.25.3
Fair value measurement
 9 Months Ended
Sep. 30, 2025
Fair Value Disclosures [Abstract]  
Fair value measurement Fair value measurement
To estimate the fair values of our financial assets and liabilities, we use valuation approaches within a hierarchy that maximize the use of observable inputs and minimize the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing an asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into three levels based on the sources of inputs as follows:
Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access
Level 2—Valuations for which all significant inputs are observable either directly or indirectly—other than Level 1 inputs
Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement
The availability of observable inputs can vary among different types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement.
The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions):
Quoted prices
in active markets 
for identical assets
(Level 1)		Significant
other observable
inputs
(Level 2)		Significant
unobservable
inputs
(Level 3)
Fair value measurement as of September 30, 2025, using:Total
Assets:
Available-for-sale securities:
U.S. Treasury bills$— $998 $— $998 
Money market mutual funds7,581 — — 7,581 
Other short-term interest-bearing securities— 129 — 129 
Equity securities6,819 — — 6,819 
Derivatives:
Foreign currency forward contracts— 93 — 93 
Cross-currency swap contracts— 48 — 48 
Interest rate swap contracts— 1 — 1 
Total assets$14,400 $1,269 $— $15,669 
Liabilities:
Derivatives:
Foreign currency forward contracts$— $261 $— $261 
Cross-currency swap contracts— 337 — 337 
Interest rate swap contracts— 306 — 306 
Contingent consideration obligations
— — 95 95 
Total liabilities$— $904 $95 $999 
Quoted prices
in active markets 
for identical assets
(Level 1)		Significant
other observable
inputs
(Level 2)		Significant
unobservable
inputs
(Level 3)
Fair value measurement as of December 31, 2024, using:Total
Assets:
Available-for-sale securities:
U.S. Treasury bills$— $997 $— $997 
Money market mutual funds10,354 — — 10,354 
Other short-term interest-bearing securities— 135 — 135 
Equity securities4,188 — — 4,188 
Derivatives:
Foreign currency forward contracts— 420 — 420 
Total assets$14,542 $1,552 $— $16,094 
Liabilities:
Derivatives:
Foreign currency forward contracts$— $8 $— $8 
Cross-currency swap contracts— 483 — 483 
Interest rate swap contracts— 531 — 531 
Contingent consideration obligations
— — 106 106 
Total liabilities$— $1,022 $106 $1,128 

Interest-bearing and equity securities
The fair values of our U.S. Treasury bills are determined by utilizing third-party pricing services, which obtain pricing data from active market makers and brokers. The fair values of our money market mutual funds and equity investments in publicly traded securities, including our equity investments in BeOne and Neumora, as of September 30, 2025 and December 31, 2024, are based on quoted market prices in active markets, with no valuation adjustment.
Derivatives
All of our foreign currency forward contracts, cross-currency swap contracts and interest rate swap contracts are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that uses an income-based industry-standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs, as applicable, include foreign currency exchange rates, SOFR, swap rates, obligor credit default swap rates and cross-currency basis swap spreads. Certain inputs, when applicable, are at commonly quoted intervals. See Note 12, Derivative instruments.
Summary of the fair values of other financial instruments
Cash equivalents
The fair values of cash equivalents approximate their carrying values due to the short-term nature of such financial instruments.
Borrowings
We estimate the fair values of our fixed-rate debt by using Level 2 inputs. As of September 30, 2025 and December 31, 2024, the aggregate fair values of our fixed-rate debt were $51.2 billion and $54.9 billion, respectively, and the carrying values of our fixed-rate debt were $52.8 billion and $58.3 billion, respectively. The estimate of the fair value of our term loan approximates its carrying value as of September 30, 2025 and December 31, 2024, as this debt instrument bears interest at a floating rate.
During the nine months ended September 30, 2025 and 2024, there were no transfers of assets or liabilities between fair value measurement levels. Except with respect to the partial impairments of the Otezla intangible asset in the first and third quarters of 2025 as discussed in Note 8, Goodwill and other intangible assets, there were no material remeasurements of the fair values of assets and liabilities that are not measured at fair value on a recurring basis.