Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2023

Sales of the Company’s products were as follows:


	Three Months Ended September 30,												Nine Months Ended September 30,
	2023						2022						2023						2022
($ 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	$	3,795	$	2,543	$	6,338	$	3,331	$	2,095	$	5,426	$	11,142	$	7,261	$	18,403	$	9,307	$	6,180	$	15,487
Alliance revenue-Lynparza (1)	153		146		299		144		140		284		439		445		884		427		397		825
Alliance revenue-Lenvima (1)	160		100		260		142		60		202		476		258		734		426		235		660
Welireg	51		3		54		38		—		38		141		6		146		83		—		83
Alliance revenue-Reblozyl (2)	43		10		52		32		7		39		108		33		142		87		37		124
Vaccines
Gardasil/Gardasil 9	838		1,746		2,585		957		1,337		2,294		1,718		5,297		7,015		1,803		3,624		5,428
ProQuad/M-M-R II/Varivax	567		146		713		532		136		668		1,435		388		1,823		1,337		379		1,716
RotaTeq	108		48		156		154		102		256		381		203		584		427		218		644
Vaxneuvance	182		33		214		15		1		16		423		65		488		31		1		32
Pneumovax 23	42		98		140		68		63		131		105		223		327		280		177		457
Vaqta	32		37		69		27		36		64		91		60		151		72		62		134
Hospital Acute Care
Bridion	265		159		424		233		190		423		841		572		1,413		665		579		1,244
Prevymis	70		87		157		49		64		114		186		244		430		136		174		310
Dificid	69		5		74		72		6		77		199		16		215		184		12		196
Primaxin	—		41		41		—		63		63		2		173		174		1		185		185
Noxafil	4		47		51		13		49		62		29		138		167		39		141		180
Zerbaxa	29		24		53		24		19		43		86		71		157		64		55		120
Cardiovascular
Alliance revenue-Adempas/Verquvo (3)	96		(4)		92		85		3		88		249		10		259		244		14		258
Adempas	—		65		65		—		57		57		—		189		189		—		181		181
Virology
Lagevrio	—		640		640		—		436		436		—		1,236		1,236		1,523		3,336		4,859
Isentress/Isentress HD	58		61		119		68		93		161		165		212		377		196		270		466
Neuroscience
Belsomra	23		35		58		20		42		62		60		117		176		60		139		199
Immunology
Simponi	—		179		179		—		173		173		—		539		539		—		540		540
Remicade	—		45		45		—		49		49		—		144		144		—		163		163
Diabetes
Januvia	328		252		581		332		385		717		842		800		1,642		958		1,294		2,252
Janumet	43		211		255		90		327		417		182		755		937		258		1,089		1,347
Other pharmaceutical (4)	197		353		549		194		410		603		540		1,147		1,690		511		1,225		1,736
Total Pharmaceutical segment sales	7,153		7,110		14,263		6,620		6,343		12,963		19,840		20,602		40,442		19,119		20,707		39,826
Animal Health:
Livestock	205		669		874		186		643		829		543		1,987		2,530		521		1,965		2,486
Companion Animal	257		269		526		289		253		542		875		942		1,817		904		929		1,834
Total Animal Health segment sales	462		938		1,400		475		896		1,371		1,418		2,929		4,347		1,425		2,894		4,320
Total segment sales	7,615		8,048		15,663		7,095		7,239		14,334		21,258		23,531		44,789		20,544		23,601		44,146
Other (5)	100		199		299		227		398		625		135		561		696		383		925		1,307
	$	7,715	$	8,247	$	15,962	$	7,322	$	7,637	$	14,959	$	21,393	$	24,092	$	45,485	$	20,927	$	24,526	$	45,453

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 3).

(2) Alliance revenue for Reblozyl represents royalties and, for the first nine months of 2022, also includes the receipt of a regulatory approval milestone payment (see Note 3).

(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 3).

(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 which increased sales by $173 million and $533 million for the nine months ended September 30, 2023 and 2022, respectively, as well as revenue from third-party manufacturing arrangements (including sales to Organon). Other for the nine months ended September 30, 2023 and 2022 also includes $118 million and $156 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 September 30,				Nine Months Ended September 30,
($ in millions)	2023		2022		2023		2022
United States	$	7,715	$	7,322	$	21,393	$	20,927
Europe, Middle East and Africa	3,327		3,286		9,978		11,228
China	1,694		1,442		5,322		3,957
Japan	1,081		673		2,514		2,776
Asia Pacific (other than China and Japan)	781		854		2,475		2,792
Latin America	895		684		2,298		1,933
Other	469		698		1,505		1,840
	$	15,962	$	14,959	$	45,485	$	45,453

Reconciliation of Segment Profits to Income before Taxes

A reconciliation of segment profits to Income Before Taxes is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions)	2023		2022		2023		2022
Segment profits:
Pharmaceutical segment	$	10,407	$	9,590	$	29,400	$	28,263
Animal Health segment	421		515		1,453		1,672
Total segment profits	10,828		10,105		30,853		29,935
Other profits	190		377		374		831
Unallocated:
Interest income	73		40		295		62
Interest expense	(317)		(244)		(836)		(727)
Amortization	(562)		(460)		(1,582)		(1,623)
Depreciation	(401)		(448)		(1,175)		(1,257)
Research and development	(3,183)		(4,277)		(20,523)		(9,374)
Restructuring costs	(126)		(94)		(344)		(288)
Charge for Zetia antitrust litigation settlements	—		—		(573)		—
Other unallocated, net	(882)		(1,416)		(2,554)		(4,628)
	$	5,620	$	3,583	$	3,935	$	12,931