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Segment Reporting
 9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
The Company’s operations are principally managed on a products basis and include three operating segments, which are the Pharmaceutical, Animal Health and Healthcare Services segments. The Pharmaceutical and Animal Health segments are the only 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, primarily administered at physician offices. 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.
The Healthcare Services segment provided services and solutions that focus on engagement, health analytics and clinical services to improve the value of care delivered to patients. The Company has been in the process of divesting the businesses in the Healthcare Services segment. The remaining businesses were divested during the first quarter of 2020.
Sales of the Company’s products were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
 ($ in millions)U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$2,157 $1,559 $3,715 $1,743 $1,327 $3,070 $6,106 $4,281 $10,387 $4,525 $3,448 $7,973 
Alliance revenue - Lynparza (1)
107 89 196 71 53 123 297 223 519 186 126 313 
Alliance revenue - Lenvima (1)
82 60 142 65 44 109 270 152 421 169 112 280 
Emend8 31 39 42 56 98 18 96 115 173 163 336 
Vaccines
Gardasil/Gardasil 9
579 608 1,187 761 558 1,320 1,209 1,732 2,941 1,579 1,464 3,044 
ProQuad/M-M-R II/Varivax
437 139 576 482 141 623 1,033 356 1,390 1,325 469 1,794 
Pneumovax 23
276 99 375 179 58 237 478 270 748 428 164 592 
RotaTeq114 96 210 102 78 180 355 246 601 360 203 564 
Vaqta32 19 51 36 26 62 79 60 139 103 65 167 
Hospital Acute Care
Bridion162 157 320 133 151 284 412 431 843 381 437 817 
Noxafil13 66 79 77 100 177 27 220 247 268 291 560 
Prevymis32 46 77 22 23 45 87 113 200 60 55 115 
Primaxin1 73 74 2 75 77 2 187 189 2 204 207 
Invanz1 50 51 (1)58 57 7 152 159 30 176 206 
Cancidas1 49 50 — 62 62 2 147 148 5 187 191 
Cubicin11 28 39 14 38 52 36 80 116 78 129 207 
Zerbaxa20 23 43 20 15 35 57 54 112 45 43 88 
Immunology
Simponi— 209 209 — 203 203 — 615 615 — 625 625 
Remicade— 82 82 — 101 101 — 242 242 — 322 322 
Neuroscience
Belsomra18 63 81 23 57 80 67 177 244 68 155 223 
Virology
Isentress/Isentress HD
92 113 205 102 149 250 243 403 646 304 449 752 
Zepatier6 22 28 24 59 83 38 83 122 96 208 304 
Cardiovascular
Zetia(1)103 103 5 142 147 (4)389 384 11 432 443 
Vytorin3 44 47 5 52 57 9 130 139 11 219 231 
Atozet— 111 111 — 97 97 — 348 348 — 283 283 
Alliance revenue - Adempas (2)
78 5 83 48 2 50 200 16 216 137 7 144 
Adempas— 55 55 — 57 57 — 167 167 — 158 158 
Diabetes
Januvia342 479 821 367 440 807 1,110 1,339 2,449 1,223 1,317 2,539 
Janumet105 400 506 129 375 503 361 1,138 1,499 462 1,105 1,567 
Women’s Health
Implanon/Nexplanon137 52 189 136 62 199 374 142 515 421 160 581 
NuvaRing24 34 58 202 39 241 85 98 184 593 107 700 
Diversified Brands
Singulair4 78 82 11 140 152 14 324 338 24 479 503 
Cozaar/Hyzaar5 86 91 6 110 116 17 275 292 16 313 329 
Arcoxia— 68 68 — 72 72 — 204 204 — 221 221 
Nasonex— 41 41 4 55 58 9 152 161 2 224 226 
Follistim AQ20 31 50 27 35 62 60 76 136 80 102 182 
Other pharmaceutical (3)
352 834 1,186 343 804 1,149 1,144 2,334 3,478 1,037 2,394 3,431 
Total Pharmaceutical segment sales
5,218 6,102 11,320 5,180 5,914 11,095 14,202 17,452 31,654 14,202 17,016 31,218 
Animal Health:
Livestock164 594 758 144 582 726 448 1,697 2,145 406 1,601 2,007 
Companion Animals234 228 462 193 203 396 676 714 1,390 560 704 1,264 
Total Animal Health segment sales
398 822 1,220 337 785 1,122 1,124 2,411 3,535 966 2,305 3,271 
Other segment sales (4)
— — — 46 — 46 23 — 23 133 1 133 
Total segment sales5,616 6,924 12,540 5,563 6,699 12,263 15,349 19,863 35,212 15,301 19,322 34,622 
Other (5)
9 2 11 10 125 134 47 221 267 19 330 350 
 $5,625 $6,926 $12,551 $5,573 $6,824 $12,397 $15,396 $20,084 $35,479 $15,320 $19,652 $34,972 
U.S. plus international may not equal total due to rounding.
(1)    Alliance revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs (see Note 3).
(2)    Alliance revenue represents Merck’s share of profits from sales in Bayer’s marketing territories, which are product sales net of cost of sales and commercialization costs (see Note 3).
(3)    Other pharmaceutical primarily reflects sales of other human health pharmaceutical products, including products within the franchises not listed separately.
(4)    Represents sales for the Healthcare Services segment. All the businesses in the Healthcare Services segment were divested as of March 31, 2020.
(5)    Other is primarily comprised of miscellaneous corporate revenues, including revenue hedging activities, as well as third-party manufacturing sales.
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 $3.4 billion and $3.0 billion for the three months ended September 30, 2020 and 2019, respectively, and $9.6 billion and $8.6 billion for the nine months ended September 30, 2020 and 2019, respectively.
Consolidated sales by geographic area where derived are as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2020201920202019
United States$5,625 $5,573 $15,396 $15,320 
Europe, Middle East and Africa3,454 3,189 10,059 9,452 
China1,016 914 2,715 2,423 
Japan828 919 2,506 2,639 
Asia Pacific (other than China and Japan)735 756 2,129 2,217 
Latin America604 671 1,670 1,889 
Other289 375 1,004 1,032 
 $12,551 $12,397 $35,479 $34,972 
A reconciliation of segment profits to Income before taxes is as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2020201920202019
Segment profits:
Pharmaceutical segment$7,974 $7,747 $22,010 $21,437 
Animal Health segment451 423 1,336 1,243 
Other segment(1)(2)1 (2)
Total segment profits8,424 8,168 23,347 22,678 
Other profits(12)101 188 226 
Unallocated:
Interest income9 61 48 225 
Interest expense(203)(231)(624)(674)
Depreciation and amortization(395)(382)(1,173)(1,169)
Research and development(3,272)(3,110)(7,364)(7,045)
Amortization of purchase accounting adjustments(285)(329)(879)(1,105)
Restructuring costs(114)(232)(269)(444)
Other unallocated, net(724)(1,699)(2,490)(4,019)
 $3,428 $2,347 $10,784 $8,673 
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 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 sales.
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.