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What changed in Merck & Co.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Merck & Co.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+652 added−615 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-25)

Top changes in Merck & Co.'s 2025 10-K

652 paragraphs added · 615 removed · 438 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

137 edited+80 added−74 removed128 unchanged
Biggest changePhase 2 Alzheimer’s MK-1167 Cancer MK-1022 (patritumab deruxtecan) (1) Biliary Bladder Cervical Colorectal Endometrial Esophageal Gastric Head and Neck Hepatocellular Melanoma Ovarian Pancreatic Prostate MK-1308 (quavonlimab) (2) Non-Small-Cell Lung MK-1308A (quavonlimab+pembrolizumab) Colorectal MK-2400 (ifinatamab deruxtecan) (1) Biliary Bladder Breast Cervical Colorectal Endometrial Esophageal Head and Neck Hepatocellular Melanoma Ovarian Pancreatic MK-2870 (sacituzumab tirumotecan) (1)(3) Biliary Colorectal Neoplasm Malignant Pancreatic MK-3475 Keytruda Advanced Solid Tumors Prostate MK-3475A (pembrolizumab+hyaluronidase subcutaneous) Cutaneous Squamous Cell Hematological Malignancies Cancer MK-5890 (boserolimab) (2) Neoplasm Malignant MK-5909 (raludotatug deruxtecan) (1) Bladder Cervical Endometrial Ovarian Renal Cell MK-6482 Welireg (3) Breast Endometrial Esophageal Hepatocellular MK-7339 Lynparza (1)(3) Advanced Solid Tumors Cancer V940 (1)(2) Bladder Renal Cell Dengue Fever Virus Vaccine V181 HIV-1 Infection MK-8591B (islatravir+MK-8507) (4) HIV-1 Pre-Exposure Prophylaxis MK-8527 Immunology MK-6194 Lupus Vitiligo MK-7240 (tulisokibart) Systemic Sclerosis Metabolic Dysfunction-Associated Steatohepatitis (MASH) MK-6024 (efinopegdutide) Pulmonary Hypertension-Chronic Obstructive Pulmonary Disease MK-5475 Pulmonary Hypertension Due To Left Heart Disease MK-7962 Winrevair 21 Table of Content s Phase 3 (Phase 3 entry date) Under Review Antiviral COVID-19 MK-4482 Lagevrio (U.S.) (May 2021) (1)(6) Cancer MK-1022 (patritumab deruxtecan) (1) Non-Small-Cell Lung (May 2022) (EU) MK-1026 (nemtabrutinib) Hematological Malignancies (March 2023) MK-1084 (2) Non-Small-Cell Lung (May 2024) MK-1308A (quavonlimab+pembrolizumab) Renal Cell (April 2021) MK-2140 (zilovertamab vedotin) Hematological Malignancies (September 2024) MK-2400 (ifinatamab deruxtecan) (1) Small-Cell Lung (July 2024) MK-2870 (sacituzumab tirumotecan) (1)(3) Breast (April 2024) Cervical (July 2024) Endometrial (December 2023) Gastric (May 2024) Non-Small-Cell Lung (November 2023) MK-3475 Keytruda Hepatocellular (May 2016) (EU) Ovarian (December 2018) Small-Cell Lung (May 2017) MK-3475A (pembrolizumab+hyaluronidase subcutaneous) Non-Small-Cell Lung (February 2023) MK-3543 (bomedemstat) Myeloproliferative Disorders (December 2023) MK-5684 (opevesostat) Prostate (December 2023) MK-7339 Lynparza (1)(2) Non-Small-Cell Lung (June 2019) Small-Cell Lung (December 2020) MK-7902 Lenvima (1)(2) Esophageal (July 2021) V940 (1)(2 ) Melanoma (July 2023) Non-Small-Cell Lung (December 2023) Diabetic Macular Edema MK-3000 (7) HIV-1 Infection MK-8591A (doravirine+islatravir) (February 2020) (5) MK-8591D (islatravir+lenacapavir) (October 2024) (1)(5) Hypercholesterolemia MK-0616 (enlicitide decanoate) (August 2023) Immunology MK-7240 (tulisokibart) Crohn’s Disease (June 2024) Ulcerative Colitis (October 2023) New Molecular Entities Cancer MK-1022 (patritumab deruxtecan) (1)(8) Non-Small-Cell Lung (U.S.) MK-6482 Welireg Renal Cell (JPN) Von Hippel-Lindau (VHL) Disease (JPN) Pneumococcal Vaccine Adult V116 Capvaxive (EU) (JPN) Pulmonary Arterial Hypertension MK-7962 Winrevair (JPN) Respiratory Syncytial Virus MK-1654 (clesrovimab) (U.S.) (EU) Certain Supplemental Filings Cancer MK-3475 Keytruda • First-Line Unresectable Advanced or Metastatic Malignant Pleural Mesothelioma (KEYNOTE-483) (EU) (JPN) MK-6482 Welireg • Advanced, Unresectable, or Metastatic Pheochromocytoma and Paraganglioma (LITESPARK-015) (U.S.) Footnotes: (1) Being developed in a collaboration.
Biggest changePhase 2 Alzheimer’s Disease MK-1167 MK-2214 Atherosclerosis MK-7262 Cancer MK-1022 (patritumab deruxtecan) (1) Biliary Bladder Cervical Endometrial Esophageal Gastric Head and Neck Hepatocellular Melanoma Non-Small Cell Lung Ovarian Pancreatic Prostate MK-1084 (calderasib) (1) Solid Tumors MK-2400 (ifinatamab deruxtecan) (1) Biliary Bladder Breast Cervical Endometrial Head and Neck Hepatocellular Melanoma Non-Small Cell Lung Ovarian Pancreatic Cancer MK-2870 (sacituzumab tirumotecan) (1) Biliary Bladder Esophageal Neoplasm Malignant Pancreatic MK-3120 Bladder MK-3475 Keytruda Prostate MK-3475A Keytruda Qlex Hematological Malignancies (U.S.) MK-5684 (opevesostat) Breast Endometrial Ovarian MK-5909 (raludotatug deruxtecan) (1) Bladder Cervical Endometrial Gastric Non-Small Cell Lung Renal Cell Small Cell Lung MK-6070 (gocatamig) (1) Small Cell Lung MK-6482 Welireg Breast Cancer V940 (intismeran autogene) (1) Bladder Renal Cell Chronic Obstructive Pulmonary Diseases MK-5884A (ensifentrine+glycopyrrolate) Eye Disorders MK-8748 HIV-1 Infection MK-8591B (islatravir+ulonivirine) Immunology MK-7240 (tulisokibart) Axial Spondyloarthritis Hidradenitis Suppurativa Rheumatoid Arthritis Systemic Sclerosis Metabolic Dysfunction-Associated Steatohepatitis (MASH) MK-6024 (efinopegdutide) Pulmonary Hypertension-Chronic Obstructive Pulmonary Disease MK-5475 Pulmonary Hypertension Due To Left Heart Disease MK-7962 Winrevair 22 Table of Contents Phase 3 (Phase 3 entry date) Under Review Cancer MK-1022 (patritumab deruxtecan) (1) Breast (July 2025) MK-1026 (nemtabrutinib) Hematological Malignancies (March 2023) MK-1084 (calderasib) (1) Colorectal (July 2025) Non-Small Cell Lung (May 2024) MK-1308A (quavonlimab+pembrolizumab) Renal Cell (April 2021) MK-2140 (zilovertamab vedotin) Hematological Malignancies (September 2024) MK-2400 (ifinatamab deruxtecan) (1) Esophageal (March 2025) Prostate (May 2025) Small Cell Lung (July 2024) MK-2870 (sacituzumab tirumotecan) (1) Breast (April 2024) Cervical (July 2024) Endometrial (December 2023) Gastric (May 2024) Non-Small Cell Lung (November 2023) Ovarian (April 2025) MK-3475 Keytruda Small-Cell Lung (May 2017) MK-3543 (bomedemstat) Myeloproliferative Disorders (December 2023) MK-5909 (raludotatug deruxtecan) (1) Ovarian (December 2025) MK-5684 (opevesostat) Prostate (December 2023) MK-7339 Lynparza (1) Non-Small Cell Lung (June 2019) Small Cell Lung (December 2020) V940 (intismeran autogene) (1) Melanoma (July 2023) Non-Small Cell Lung (December 2023) COVID-19 MK-4482 Lagevrio (U.S.) (May 2021) (1)(2) Dengue Fever Virus Vaccine V181 (June 2025) Diabetic Macular Edema MK-3000 (3) HIV-1 Infection MK-8591A (doravirine+islatravir) (February 2020) ( EU ) MK-8591D (islatravir+lenacapavir) (October 2024) (1)(4) HIV-1 Pre-Exposure Prophylaxis MK-8527 (July 2025) Hypercholesterolemia MK-0616 (enlicitide decanoate) (August 2023) Immunology MK-7240 (tulisokibart) Crohn’s Disease (June 2024) Ulcerative Colitis (October 2023) Influenza MK-1406 (September 2025) New Molecular Entities HIV-1 Infection MK-8591A (doravirine+islatravir) (U.S.) (JPN) Respiratory Syncytial Virus MK-1654 Enflonsia (EU) (JPN) Certain Supplemental Filings Cancer MK-3475 Keytruda • Platinum-Resistant Recurrent Ovarian Cancer (KEYNOTE-B96) (EU) (JPN) • Cisplatin-Ineligible Muscle Invasive Bladder Cancer (KEYNOTE-905) (EU) (JPN) • First-Line Unresectable Locally Advanced or Metastatic Triple Negative Breast Cancer (KEYNOTE-D19) (U.S.) MK-3475A Keytruda Qlex • First-Line Unresectable Locally Advanced o r Metastatic Triple Negative Breast Cancer (KEYNOTE-D19) (U.S.) MK-6482 Welireg • Clear Cell Renal Cell Carcinoma Following Nephrectomy (LITESPARK-022) (U.S.) (5) • Previously Treated Advanced Renal Cell Carcinoma (LITESPARK-011) (U.S.) (1) Pulmonary Arterial Hypertension MK-7962 Winrevair (HYPERION) (U.S.) Footnotes: (1) Being developed in a collaboration.
Pursuant to the Prescription Drug User Fee Act VII (PDUFA), the FDA review period target for NDAs or original BLAs is either six months, for priority review, or ten months, for a standard review, from the time the application is deemed sufficiently complete.
Pursuant to the Prescription Drug User Fee Act VII (PDUFA), the FDA review period target for original NDAs or BLAs is either six months, for priority review, or ten months, for a standard review, from the time the application is deemed sufficiently complete.
Merck is developing Lagevrio in collaboration with Ridgeback Biotherapeutics LP (Ridgeback). The FDA granted Emergency Use Authorization for Lagevrio in December 2021, which was last reissued in November 2023.
Merck is developing Lagevrio in collaboration with Ridgeback Biotherapeutics LP. The FDA granted Emergency Use Authorization for Lagevrio in December 2021, which was last reissued in November 2023.
Moreover, the NMPA implements strict regulations to ensure that all drugs meet the same standards as those set by the WHO. The agency establishes stringent safety and efficacy requirements for drug approval. The length of the NMPA review process can vary, but it typically takes around one to two years for a new drug to be approved in China.
Moreover, the NMPA implements strict regulations to ensure that all drugs meet the same standards as those set by the WHO. The NMPA establishes stringent safety and efficacy requirements for drug approval. The length of the NMPA review process can vary, but it typically takes around one to two years for a new drug to be approved in China.
In markets with historically low rates of health care spending, the Company encourages those governments to increase their investments and adopt market reforms in order to improve their citizens’ access to appropriate health care, including medicines. Operating conditions have become more challenging under the global pressures of competition, industry regulation and cost containment efforts.
In markets with historically low rates of health care spending, the Company encourages those governments to increase their investments and adopt market reforms in order to improve their citizens’ access to appropriate health care, including medicines and vaccines. Operating conditions have become more challenging under the global pressures of competition, industry regulation and cost containment efforts.
The Company is committed to ensuring a high-quality, safe, reliable, supply of its medicines and vaccines, and to implementing innovative solutions that address barriers to sustainable access to its products. Merck’s approach is designed to enable it to serve the greatest number of patients today, while meeting the needs of patients in the future.
The Company is committed to ensuring a high-quality, safe, reliable, supply of its medicines and vaccines, and to implementing innovative solutions that address barriers to care and sustainable access to its products. Merck’s approach is designed to enable it to serve the greatest number of patients today, while meeting the needs of patients in the future.
The Company’s operations may be adversely affected by generic and biosimilar competition as the Company’s products mature, as well as technological advances of competitors, industry consolidation, patents granted to competitors, competitive combination products, new products of competitors, the generic availability of competitors’ branded products, and new information from clinical trials of marketed products or post-marketing surveillance.
The Company’s operations may be adversely affected by generic and biosimilar competition as the Company’s products mature, as well as technological advances of competitors, industry consolidation, patents granted to competitors, competitive combination products, new products of competitors, the availability of generic or biosimilar versions of competitors’ branded products, and new information from clinical trials of marketed products or post-marketing surveillance.
Candidates shown in Phase 2 include the most advanced compound with a specific mechanism or, if listed compounds have the same mechanism, they are each currently intended for commercialization in a given therapeutic area. Small molecules and biologics are given MK-number designations and vaccine candidates are given V-number designations.
Candidates shown in Phase 2 include the most advanced compound with a specific mechanism or, if listed compounds have the same mechanism, they are each currently intended for commercialization in a given therapeutic area. Small molecules and biologics generally are given MK-number designations and vaccine candidates generally are given V-number designations.
Reference pricing may either compare a product’s prices in other markets (external reference pricing), or compare a product’s price with those of other products in a national class (internal reference pricing). The authorities then use the price data to set new local prices for brand-name drugs, including the Company’s drugs.
Reference pricing may either compare a product’s prices in other markets (external reference pricing), or compare a product’s price with those of other products in a national class or group (internal reference pricing). The authorities then use the price data to set new local prices for brand-name drugs, including the Company’s drugs.
The EHS Council monitors performance against the Company’s goals and increases transparency on environmental issues within the Company, senior management, and the Board of Directors (the Board). The Global Safety and Environment (GSE) vice president communicates progress on environmental sustainability goals, objectives and other important issues to the Board, senior management and the EHS Council.
The EHS Council monitors performance against the Company’s environmental sustainability goals and increases transparency on environmental issues within the Company, senior management, and the Board of Directors (the Board). The Global Safety and Environment vice president communicates progress on environmental sustainability goals, objectives, and other important issues to the Board, senior management, and the EHS Council.
Except as otherwise noted, candidates in Phase 1, additional indications in the same therapeutic area (other than with respect to cancer and immunology) and additional claims, line extensions or formulations for in-line products are not shown.
Except as otherwise noted, candidates in Phase 1, additional indications in the same therapeutic area (other than with respect to cancer, immunology and certain other indications) and additional claims, line extensions or formulations for in-line products are not shown.
The HTAR applies to all new active substance oncology products and advanced therapy medicinal products, including cell and gene therapies, beginning January 1, 2025; to new active substance orphan medicinal products beginning January 1, 2028; and to all products approved via the centralized procedure beginning in 2030.
The HTAR applies to all new active substance oncology products and advanced therapy medicinal products, including cell and gene therapies, beginning January 2025; to new active substance orphan medicinal products beginning January 2028; and to all products approved via the centralized procedure beginning in 2030.
Legislative Changes In 2022, Congress passed the IRA, which makes significant changes to how drugs are covered and paid for under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, which has taken effect in 2025, and government price setting for certain Medicare Part D drugs, starting in 2026, and Medicare Part B drugs starting in 2028.
Legislative Changes In 2022, Congress passed the IRA, which made significant changes to how drugs are covered and paid for under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, which has taken effect in 2025, and government price setting for certain Medicare Part D drugs, starting in 2026, and Medicare Part B drugs starting in 2028.
The Company’s cross-functional Environmental Sustainability Implementation Steering Committee was designated by the EHS Council to oversee the progress of initiatives that support the achievement of the Company’s public goals and provide guidance on resourcing of the Company’s environmental sustainability strategy. Merck believes that climate change could present risks to its business, as discussed in further detail in Item 1A.
The Company’s cross-functional Environmental Sustainability Implementation Steering Committee was designated by the EHS Council to oversee the progress of initiatives that support the achievement of the Company’s public goals and provide guidance on resourcing of the Company’s environmental sustainability strategy. The Company believes that climate change could present risks to its business, as discussed in further detail in Item 1A.
The Company’s policies and procedures are already consistent with the substance of these directives; consequently, it is believed that they will not have any material effect on the Company’s business. The Company believes that it will continue to be able to conduct its operations, including launching new drugs, in this regulatory environment.
The Company’s policies and procedures are already consistent with the substance of these directives; consequently, the Company believes that they will not have any material effect on the Company’s business. The Company believes that it will continue to be able to conduct its operations, including launching new drugs, in this regulatory environment.
(8) The compound patent family contains two additional patents that expire in 2029 due to patent term adjustment resulting from patent office delay. These patents are based on the initial discovery of the active ingredient in Keytruda . While these patents may provide additional protection, the Company expects that they will be the subject of litigation in the future.
(10) The compound patent family contains two additional patents that expire in 2029 due to patent term adjustment resulting from patent office delay. These patents are based on the initial discovery of the active ingredient in Keytruda . While these patents may provide additional protection, the Company expects that they will be the subject of litigation in the future.
The Company offers a personal health care concierge service to assist U.S. employees participating in the Company medical plan with their health care needs.
The Company offers a personal health care concierge service to assist U.S. employees participating in its medical plan with their health care needs.
The Company continuously evaluates its sites’ waste disposal methods to gain a better understanding of its network and changes therein, as well as to identify risks and opportunities in its value chain. Based on its evaluation, the Company implemented programs to divert non-hazardous landfill waste from its two highest landfill-generating sites.
The Company continuously evaluates its sites’ waste disposal methods to gain a better understanding of its network and changes therein, as well as to identify risks and opportunities in its value chain. Based on its evaluation, the Company implemented programs to divert non-hazardous landfill waste from its four highest landfill-generating sites.
In several international markets, government-mandated pricing actions have reduced prices of generic and patented drugs. In addition, the Company’s sales performance in 2024 was negatively affected by other cost-reduction measures taken by governments and other third parties to lower health care costs.
In several international markets, government-mandated pricing actions have reduced prices of generic and patented drugs. In addition, the Company’s sales performance in 2025 was negatively affected by other cost-reduction measures taken by governments and other third parties to lower health care costs.
The Company has taken an active role in identifying and accruing for these costs and, in management’s opinion, the liabilities for all environmental matters that are probable and reasonably estimable have been accrued and totaled $41 million and $42 million at December 31, 2024 and 2023, respectively.
The Company has taken an active role in identifying and accruing for these costs and, in management’s opinion, the liabilities for all environmental matters that are probable and reasonably estimable have been accrued and totaled $42 million and $41 million at December 31, 2025 and 2024, respectively.
Although it is not possible to predict with certainty the outcome of these matters, or the ultimate costs of remediation, management does not believe that any reasonably possible expenditures that may be incurred in excess of the liabilities accrued should exceed approximately $46 million in the aggregate.
Although it is not possible to predict with certainty the outcome of these matters, or the ultimate costs of remediation, management does not believe that any reasonably possible expenditures that may be incurred in excess of the liabilities accrued should exceed approximately $58 million in the aggregate.
In addition, the Company recognizes alliance revenue related to sales of Lynparza (olaparib), an oral poly (ADP-ribose) polymerase (PARP) inhibitor, for certain types of advanced or recurrent ovarian, early or metastatic breast, metastatic pancreatic, and metastatic castration-resistant prostate cancers; alliance revenue related to sales of Lenvima, an oral receptor tyrosine kinase inhibitor, for certain types of thyroid cancer, RCC, HCC, in combination with everolimus for certain patients with advanced RCC, and in combination with Keytruda for certain patients with advanced endometrial carcinoma or advanced RCC; and alliance revenue related to Reblozyl (luspatercept-aamt) for the treatment of certain types of anemia.
In addition, the Company recognizes alliance revenue related to sales of Lynparza (olaparib), an oral poly (ADP-ribose) polymerase (PARP) inhibitor, for certain types of advanced or recurrent ovarian, early or metastatic breast, metastatic pancreatic, and metastatic castration-resistant prostate cancers; alliance revenue related to sales of Lenvima, an oral receptor TKI, for certain types of thyroid cancer, RCC, HCC, in combination with everolimus for certain patients with advanced RCC, and in combination with Keytruda for certain patients with advanced endometrial carcinoma or advanced RCC; and alliance revenue related to Reblozyl (luspatercept-aamt) for the treatment of certain types of anemia.
“Risk Factors” below under the headings “Climate change or legal, regulatory or market measures to address climate change may negatively affect the Company’s business, results of operations, cash flows and prospects” and “Environmental, social and governance matters may impact the Company’s business and reputation.” Some of the potential impacts of climate change to the Company’s business include increased operating costs due to additional regulatory requirements, physical risks to the Company’s facilities, water limitations and disruptions to its supply chain.
“Risk Factors” below under the headings “Climate change or legal, regulatory or market measures to address climate change may negatively affect the Company’s business, results of operations, cash flows and prospects” and “Environmental, social and governance matters may impact the Company’s business and reputation.” 24 Table of Contents Some of the potential impacts of climate change to the Company’s business include increased operating costs due to additional regulatory requirements, physical risks to the Company’s facilities, water limitations, and disruptions to its supply chain.
Additionally, the head of the Environmental Sustainability Center of Excellence is a member of the Environmental, Social and Governance Strategy Management Team, a group of functional experts that advises, shapes, and drives the Company’s long-term sustainability strategy with guidance from an internal cross divisional forum of senior leaders.
Additionally, the head of the Environmental Sustainability Center of Excellence is a member of the Sustainability Strategy Management Team, a group of functional experts that advises, shapes, and drives the Company’s long-term sustainability strategy with guidance from an internal cross divisional forum of senior leaders.
Virology Lagevrio (molnupiravir), an investigational oral antiviral COVID-19 medicine available in the U.S. under Emergency Use Authorization (EUA); Isentress/Isentress HD (raltegravir), an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection; Delstrigo (doravirine/lamivudine/tenofovir disoproxil fumarate), a complete regimen for the treatment of HIV-1 infection in adult patients with no prior antiretroviral treatment history or to replace the current antiretroviral regime in certain patients who are virologically suppressed on a stable antiretroviral regimen; and Pifeltro (doravirine), a non-nucleoside reverse transcriptase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection in adult patients with no prior antiretroviral treatment history or to replace the current antiretroviral regime in certain patients who are virologically suppressed on a stable antiretroviral regimen.
Virology Lagevrio (molnupiravir), an investigational oral antiviral COVID-19 medicine available in the U.S. under Emergency Use Authorization; Isentress/Isentress HD (raltegravir), a human immunodeficiency virus (HIV) integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection; Delstrigo (doravirine/lamivudine/tenofovir disoproxil fumarate), a complete regimen for the treatment of HIV-1 infection in adult patients with no prior antiretroviral treatment history or to replace the current antiretroviral regime in certain patients who are virologically suppressed on a stable antiretroviral regimen; and Pifeltro (doravirine), a non-nucleoside reverse transcriptase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection in adult patients with no prior antiretroviral treatment history or to replace the current antiretroviral regime in certain patients who are virologically suppressed on a stable antiretroviral regimen.
The Company’s 2023/2024 Impact Report, which provides enhanced sustainability disclosures, is available in the Sustainability section of the Company’s website at www.merck.com. Information in the Company’s Impact Report is not incorporated by reference into this Form 10-K.
The Company’s 2024/2025 Impact Report, which provides enhanced sustainability disclosures, is available in the Sustainability section of the Company’s website at www.merck.com. Information in the Company’s Impact Report is not incorporated by reference into this Form 10-K.
In 2024, the Company committed to a net-zero target for its GHG emissions across its global operations (Scopes 1, 2 and 3) by 2045, aligned with the guidelines of the Science Based Targets initiative (SBTi). Other environmental sustainability initiatives of the Company include: • Partnering for progress across the Company’s value chain.
In 2024, the Company committed to a net-zero target for its GHG emissions across its global operations (Scopes 1, 2, and 3) by 2045, aligned with the guidelines of the Science Based Targets initiative (SBTi), a third-party organization. Other environmental sustainability initiatives of the Company include: • Partnering for progress across the Company’s value chain.
The Company has sued the U.S. government regarding the IRA’s Program (see Item 8 “Financial Statements and Supplementary Data,” Note 10. “Contingencies and Environmental Liabilities” below). Furthermore, 7 Table of Content s the Executive Branch and Congress continue to discuss legislation designed to control health care costs, including the cost of drugs.
The Company has sued the U.S. government regarding the IRA’s Program (see Item 8 “Financial Statements and Supplementary Data,” Note 10. “Contingencies and Environmental Liabilities” below). Furthermore, the Executive Branch and Congress continue to discuss legislation designed to control health care costs, including the cost of drugs.
In 2024, an additional Phase 3 clinical trial 19 Table of Content s (MOVe-NOW) was initiated to evaluate Lagevrio for the treatment of adults with COVID-19 at high risk for disease progression. MOVe-NOW will build on existing Lagevrio data to assess efficacy in the current COVID-19 environment and support applications for licensure.
In 2024, an additional Phase 3 clinical trial (MOVe-NOW) was initiated to evaluate Lagevrio for the treatment of adults with COVID-19 at high risk for disease progression. MOVe-NOW will build on existing Lagevrio data to assess efficacy in the current COVID-19 environment and support applications for licensure.
The Company aims to develop efficient and sustainable processes at product launch, with the goal of minimizing material use and waste from its commercial manufacturing. The Company utilizes an innovative “green-by-design” development strategy with a goal to progress from an initial early clinical supply route to a fully optimized and sustainable commercial manufacturing process.
The Company aims to develop efficient and sustainable processes at product launch, with the goal of minimizing material use and waste from its commercial manufacturing. The Company utilizes an innovative “green-by-design” development strategy with a goal to progress from an initial early clinical supply route to a fully optimized and sustainable commercial manufacturing process. The Company received the Peter J.
Ultimately, an HTA measures the added value of a new health technology compared to existing ones. The EU Health Technology Assessment Regulation 2021/2282 (HTAR) applies in 2025. This provides for the conduct of an EU level comparative Joint Clinical Assessment (JCA) of a new product versus relevant comparators identified by the EU Member States.
Ultimately, an HTA measures the added value of a new health technology compared to existing ones. The EU Health Technology Assessment Regulation 2021/2282 (HTAR) now applies. This provides for the conduct of an EU level comparative Joint Clinical Assessment (JCA) of a new product versus relevant comparators identified by the EU Member States.
At the same time, the FDA has committed to expediting the development and review of products bearing the “breakthrough therapy” designation, which has accelerated the regulatory review process for medicines with this designation. The FDA has also undertaken efforts to bring generic competition to market more efficiently and in a more timely manner.
At the same time, the FDA has committed to expediting the development and review of products bearing the “breakthrough therapy” designation, which has accelerated the 11 Table of Contents regulatory review process for medicines with this designation. The FDA has also undertaken efforts to bring generic competition to market more efficiently and in a more timely manner.
A new NRDL was recently completed in which new entries averaged 63% price reductions. While pricing pressure has always existed in China, health care reform has increased this pressure in part due to the acceleration of generic substitution through volume-based procurement (VBP).
A new NRDL was recently completed in which new entries averaged approximately 60% price reductions. While pricing pressure has always existed in China, health care reform has increased this pressure in part due to the acceleration of generic substitution through volume-based procurement (VBP).
Certain of the products within the Company’s franchises are as follows: 1 Table of Content s Oncology Keytruda is an anti-PD-1 (programmed death receptor-1) therapy that has been approved as monotherapy for the treatment of certain patients with cervical cancer, classical Hodgkin lymphoma (cHL), cutaneous squamous cell carcinoma, esophageal or gastroesophageal junction (GEJ) carcinoma, head and neck squamous cell carcinoma (HNSCC), hepatocellular carcinoma (HCC), melanoma, Merkel cell carcinoma, microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) solid tumors (including MSI-H/dMMR colorectal cancer and endometrial carcinoma), non-small-cell lung cancer (NSCLC), primary mediastinal large B-cell lymphoma (PMBCL), tumor mutational burden-high (TMB-H) solid tumors, and urothelial cancer including non-muscle invasive bladder cancer.
Certain of the products within the Company’s franchises are as follows: 1 Table of Contents Oncology Keytruda (pembrolizumab) is an anti-PD-1 (programmed death receptor-1) therapy available for intravenous administration that has been approved as monotherapy for the treatment of certain patients with cervical cancer, classical Hodgkin lymphoma (cHL), cutaneous squamous cell carcinoma, esophageal or gastroesophageal junction (GEJ) carcinoma, head and neck squamous cell carcinoma (HNSCC), hepatocellular carcinoma (HCC), melanoma, Merkel cell carcinoma, microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) solid tumors (including MSI-H/dMMR colorectal cancer and endometrial carcinoma), non-small cell lung cancer (NSCLC), primary mediastinal large B-cell lymphoma (PMBCL), tumor mutational burden-high (TMB-H) solid tumors, and urothelial cancer including non-muscle invasive bladder cancer.
Continued growth of the Company’s business in China is dependent upon ongoing development of a favorable environment for innovative pharmaceutical products and vaccines, sustained access for the Company’s currently marketed products, and the absence of trade impediments or adverse pricing controls.
Recovery of the Company’s business in China is dependent upon ongoing development of a favorable environment for innovative pharmaceutical products and vaccines, sustained access for the Company’s currently marketed products, and the absence of trade impediments or adverse pricing controls.
The Company’s endorsement of the United Nations CEO Water Mandate enables alignment of the Company’s water program with the mandate’s principles. The Company has continued to identify partnerships to help it advance its water stewardship priorities in the areas in which it operates.
The Company’s endorsement of the United Nations CEO Water Mandate enables alignment of the Company’s water program with the mandate’s 25 Table of Contents principles. The Company has continued to identify partnerships to help it advance its water stewardship priorities in the areas in which it operates.
Principal products in this segment include: Livestock Products Nuflor (Florfenicol) antibiotic range for use in cattle and swine; Bovilis / Vista vaccine lines for infectious diseases in cattle, including Bovilis Cryptium for protection against Cryptosporidium parvum; Banamine (Flunixin meglumine) bovine and swine anti-inflammatory; Estrumate (cloprostenol sodium) for the treatment of fertility disorders in cattle; Matrix (altrenogest) fertility management for swine; Resflor (florfenicol and flunixin meglumine) , a combination broad-spectrum antibiotic and non-steroidal anti-inflammatory drug for bovine respiratory disease; Zuprevo (tildipirosin) for bovine respiratory disease; Revalor (trenbolone acetate and estradiol) to improve production efficiencies in beef cattle; Safe-Guard (fenbendazole) de-wormer for cattle; M+Pac (Mycoplasma Hyopneumoniae Bacterin) swine pneumonia vaccine; Porcilis (Lawsonia intracellularis baterin) and Circumvent (Porcine Circovirus Vaccine, Type 2, Killed Baculovirus Vector) vaccine lines for infectious diseases in swine; Nobilis / Innovax (Live Marek’s Disease Vector) , vaccine lines for poultry; Paracox and Coccivac coccidiosis vaccines; Exzolt , a systemic treatment for poultry red mite infestations; Slice (emamectin benzoate) parasiticide and Imvixa (lufenuron) for sea lice control in salmon; Clynav vaccine for protection against pancreas disease in salmon; Aquavac (Avirulent Live Culture)/ Norvax vaccines against bacterial and viral disease in fish; Aquaflor (florfenicol) antibiotic for farm-raised fish; Flexolt (fluralaner) against lice in sheep; and Allflex Livestock Intelligence solutions for animal identification, monitoring and traceability.
Principal products in this segment include: Livestock Products Nuflor (Florfenicol) antibiotic range for use in cattle and swine; Bovilis / Vista vaccine lines for infectious diseases in cattle, including Bovilis Cryptium for protection against Cryptosporidium parvum; Banamine (Flunixin meglumine) bovine and swine anti-inflammatory; Estrumate (cloprostenol sodium) for the treatment of fertility disorders in cattle; Matrix (altrenogest) fertility management for swine; Resflor (florfenicol and flunixin meglumine) , a combination broad-spectrum antibiotic and non-steroidal anti-inflammatory drug for bovine respiratory disease; Zuprevo (tildipirosin) for bovine respiratory disease; Revalor (trenbolone acetate and estradiol) to improve production efficiencies in beef cattle; Safe-Guard (fenbendazole) de-wormer for cattle; M+Pac (Mycoplasma Hyopneumoniae Bacterin) swine pneumonia vaccine; Porcilis (Lawsonia intracellularis baterin) and Circumvent (Porcine Circovirus Vaccine, Type 2, Killed Baculovirus Vector) vaccine lines for infectious diseases in swine; Nobilis / Innovax (Live 3 Table of Contents Marek’s Disease Vector) , vaccine lines for poultry; Paracox and Coccivac coccidiosis vaccines; Exzolt (fluralaner), a systemic treatment for poultry red mite and northern foul mite infestations; Exzolt 5% (fluralaner), for treatment and prevention of ticks, lice, horn flies and New World Screwworm on cattle; Slice (emamectin benzoate) parasiticide and Imvixa (lufenuron) for sea lice control in salmon; Clynav vaccine for protection against pancreas disease in salmon; Aquavac (Avirulent Live Culture)/ Norvax vaccines against bacterial and viral disease in fish; Aquaflor (florfenicol) antibiotic for farm-raised fish; Flexolt (fluralaner) against lice in sheep; and Allflex Livestock Intelligence solutions for animal identification, monitoring and traceability.
MK-2400 is being developed as part of a collaboration with Daiichi Sankyo. • MK-2870, sacituzumab tirumotecan, is an investigational trophoblast cell-surface antigen 2 (TROP2)-directed ADC being evaluated for certain patients with breast, cervical, endometrial, gastric and non-small-cell lung cancers.
Ifinatamab deruxtecan is being developed as part of a collaboration with Daiichi Sankyo. • MK-2870, sacituzumab tirumotecan, is an investigational trophoblast cell-surface antigen 2 (TROP2) directed ADC being evaluated for certain patients with breast, cervical, endometrial, gastric, non-small cell lung, and ovarian cancers.
These same management tools are also used in treatment areas in which the payor has taken the position that multiple branded products are therapeutically comparable. As the U.S. payor market concentrates further, the Company may face greater pricing pressure from private third-party payors.
These same management tools are also used in treatment areas in which the payer has taken the position that multiple branded products are therapeutically comparable. As the U.S. payer market concentrates further, the Company may face greater pricing pressure from private third-party payers.
The HTA process, which is currently governed by the national laws of these countries, involves the assessment of the cost-effectiveness, public health impact, therapeutic impact and/or the economic and social impact of use of a given pharmaceutical product in the national health care system of the individual country in 8 Table of Content s which it is conducted.
The HTA process, which is currently governed by the national laws of these countries, involves the assessment of the cost-effectiveness, public health impact, therapeutic impact and/or the economic and social impact of use of a given pharmaceutical product in the national health care system of the individual country in which it is conducted.
However, the Company closely reviews its methods of operations and adopts strategies responsive to changing economic and political conditions. 25 Table of Content s Merck has operations in countries located in Latin America, the Middle East, Africa, Eastern Europe and Asia Pacific. Business in these developing areas, while sometimes less stable, offers important opportunities for growth over time.
However, the Company closely reviews its methods of operations and adopts strategies responsive to changing economic and political conditions. The Company has operations in countries located in Latin America, the Middle East, Africa, Eastern Europe and Asia Pacific. Business in these developing areas, while sometimes less stable, offers important opportunities for growth over time.
The Company's wide-ranging efforts to expand access to health encompass a set of principles embedded in its business strategies and operations. These principles guide its global approach to addressing significant public health burdens and unmet medical needs. The Company systematically evaluates its pipeline candidates to assess their potential in low and middle-income countries and underserved health care settings.
The Company's wide-ranging efforts to expand access to health encompass a set of principles embedded in its business strategies and operations. These principles guide its global approach to addressing significant public health burdens. The Company systematically evaluates its pipeline candidates to assess their potential to address unmet medical needs, particularly in low- and middle-income countries.
Hospital Acute Care Bridion (sugammadex), a medication for the reversal of two types of neuromuscular blocking agents used during surgery; Prevymis (letermovir) for the prophylaxis of cytomegalovirus (CMV) infection and disease, or of CMV disease, in certain high risk adult and pediatric recipients of an allogeneic hematopoietic stem cell transplant or of a kidney transplant, respectively; Dificid (fidaxomicin) for the treatment of C. difficile -associated diarrhea; Zerbaxa (ceftolozane and tazobactam) for injection, a combination antibacterial and beta-lactamase inhibitor for the treatment of certain bacterial infections; and Noxafil (posaconazole), an antifungal agent for the prevention of certain invasive fungal infections.
Hospital Acute Care Bridion (sugammadex), a medication for the reversal of two types of neuromuscular blocking agents used during surgery; Prevymis (letermovir) for the prophylaxis of cytomegalovirus (CMV) infection and disease, or of CMV disease, in certain high risk adult and pediatric recipients of an allogeneic hematopoietic stem cell transplant or of a kidney transplant, respectively; Zerbaxa (ceftolozane and tazobactam) for injection, a combination antibacterial and beta-lactamase inhibitor for the treatment of certain bacterial infections; and Dificid (fidaxomicin) for the treatment of C. difficile -associated diarrhea.
“Contingencies and Environmental Liabilities” below. 14 Table of Content s Worldwide, all of the Company’s important products are sold under trademarks that are considered in the aggregate to be of material importance. Trademark protection continues in some countries as long as used; in other countries, as long as registered. Registration is for fixed terms and can be renewed indefinitely.
“Contingencies and Environmental Liabilities” below. 15 Table of Contents Worldwide, all of the Company’s important products are sold under trademarks that are considered in the aggregate to be of material importance. Trademark protection continues in some countries as long as used; in other countries, as long as registered. Registration is for fixed terms and can be renewed indefinitely.
Royalty income in 2024 on patent and know-how licenses and other rights amounted to $1.1 billion. Merck also incurred royalty expenses amounting to $1.9 billion in 2024 under patent and know-how licenses it holds.
Royalty income in 2025 on patent and know-how licenses and other rights amounted to $1.5 billion. Merck also incurred royalty expenses amounting to $1.9 billion in 2025 under patent and know-how licenses it holds.
Merck is working to mitigate the potentially harmful effects that the law could have, which could include a detrimental impact on innovation. In addition, in 2021, Congress passed the American Rescue Plan Act, which included a provision that eliminates the statutory c ap on rebates drug manufacturers pay to Medicaid beginning in January 2024.
Merck is working to mitigate the potentially harmful effects that the law could have, which could include a detrimental impact on innovation. In addition, in 2021, Congress passed the American Rescue Plan Act, which included a provision that eliminated the statutory c ap on rebates drug manufacturers pay to Medicaid.
In addition to formulary tier co-pay differentials, private health insurance companies and self-insured employers have been increasing the cost-sharing required from beneficiaries, particularly for branded pharmaceuticals and biotechnology products.
In addition to formulary tier co-pay 8 Table of Contents differentials, private health insurance companies and self-insured employers have been increasing the cost-sharing required from beneficiaries, particularly for branded pharmaceuticals and biotechnology products.
In some countries, one or more regulatory exclusivities, including data exclusivity, may provide parallel market protection that is complementary to patent protection and, in some cases, may provide more effective or longer lasting marketing exclusivity than a product’s patent portfolio.
In some countries, one or more regulatory exclusivities, including data exclusivity, may provide parallel market protection that is complementary 13 Table of Contents to patent protection and, in some cases, may provide more effective or longer lasting marketing exclusivity than a product’s patent portfolio.
Finally, Phase 3 trials are conducted in the 15 Table of Content s intended population for licensure and provide data on immunogenicity and/or effectiveness, as well as safety, to support applications for regulatory approvals. If successful, the Company submits regulatory filings with the appropriate regulatory agencies.
Finally, Phase 3 trials are conducted in the 16 Table of Contents intended population for licensure and provide data on immunogenicity and/or effectiveness, as well as safety, to support applications for regulatory approvals. If successful, the Company submits regulatory filings with the appropriate regulatory agencies.
Additionally, the FDA must find that there is no adequate, approved and available alternative to the emergency use of the authorized drug or biologic.
Additionally, the FDA must find that there is no adequate, approved and available 17 Table of Contents alternative to the emergency use of the authorized drug or biologic.
Sales worldwide by subsidiaries outside the U.S. as a percentage of total Company sales was 50% in 2024, 53% in 2023 and 54% in 2022. The Company’s worldwide business is subject to risks of currency fluctuations, governmental actions and other governmental proceedings abroad. The Company does not regard these risks as a deterrent to further expansion of its operations abroad.
Sales worldwide by subsidiaries outside the U.S. as a percentage of total Company sales were 44% in 2025, 50% in 2024 and 53% in 2023. The Company’s worldwide business is subject to risks of currency fluctuations, governmental actions and other governmental proceedings abroad. The Company does not regard these risks as a deterrent to further expansion of its operations abroad.
Companion Animal Products Bravecto , a line of oral, topical and injectable parasitic control products, including the original Bravecto (fluralaner) products for dogs and cats that last up to 12 weeks; Bravecto (fluralaner) One-Month , a monthly product for dogs, Bravecto (fluralaner) Injectable/Quantum , an injectable product for dogs that lasts up to one-year, and Bravecto Plus (fluralaner/moxidectin), a two-month product for cats; Sentinel, a line of oral parasitic products for dogs including Sentinel Spectrum (milbemycin oxime, lufenuron, and praziquantel) and Sentinel Flavor Tabs (milbemycin oxime, lufenuron); Optimmune (cyclosporine), an ophthalmic ointment; Nobivac vaccine lines for flexible dog and cat vaccination, including Nobivac NXT for canine flu and feline leukemia virus; GilvetMab , an immune checkpoint inhibitor monoclonal antibody conditionally licensed for melanoma and mastocytoma tumors; Otomax (gentamicin sulfate, USP; Betamethasone valerate USP; and Clotrimazole USP ointment)/ Mometamax (gentamicin sulfate, USP, Mometasone Furoate Monohydrate and Clotrimazole, USP, Otic Suspension)/ Mometamax Ultra (gentamicin sulfate, mometasone furoate monohydrate and posaconazole suspension)/ Posatex (orbifloxacin, mometasone furoate monohydrate and posaconazole, suspension) ear ointments for acute and chronic otitis; Caninsulin / Vetsulin (porcine insulin zinc suspension) diabetes mellitus treatment for dogs and cats; Panacur (fenbendazole)/ Safeguard (fenbendazole) broad-spectrum anthelmintic (de-wormer) for use in many animals; Regumate (altrenogest) fertility management for horses; Prestige vaccine line for horses; Scalibor (Deltamethrin) /Exspot for protecting against bites 3 Table of Content s from fleas, ticks, mosquitoes and sandflies; and Sure Petcare products for companion animal identification and well-being, including the microchip and pet recovery system Home Again .
Companion Animal Products Bravecto , a line of oral, topical and injectable parasitic control products, including the original Bravecto (fluralaner) products for dogs and cats that last up to 12 weeks; Bravecto (fluralaner) One-Month , a monthly product for dogs, Bravecto (fluralaner) Injectable/Quantum , an injectable product for dogs that lasts up to one-year, Bravecto TriUNO (fluralaner/moxidectin/pyrantel), a one month dog product that covers internal and external parasites, and Bravecto Plus (fluralaner/moxidectin), a two-month product for cats; Sentinel, a line of oral parasitic products for dogs including Sentinel Spectrum (milbemycin oxime, lufenuron, and praziquantel) and Sentinel Flavor Tabs (milbemycin oxime, lufenuron); Numelvi (atinvicitinib), a once daily second-generation Janus kinase inhibitor for the treatment of pruritus associated with allergic dermatitis; Optimmune (cyclosporine), an ophthalmic ointment; Nobivac vaccine lines for flexible dog and cat vaccination, including Nobivac NXT for canine flu and feline leukemia virus; Gilvetmab, an immune checkpoint inhibitor monoclonal antibody conditionally licensed for melanoma and mastocytoma tumors; Otomax (gentamicin sulfate, USP; Betamethasone valerate USP; and Clotrimazole USP ointment)/ Mometamax (gentamicin sulfate, USP, Mometasone Furoate Monohydrate and Clotrimazole, USP, Otic Suspension)/ Mometamax Ultra (gentamicin sulfate, mometasone furoate monohydrate and posaconazole suspension)/ Posatex (orbifloxacin, mometasone furoate monohydrate and posaconazole, suspension) ear ointments for acute and chronic otitis; Caninsulin / Vetsulin (porcine insulin zinc suspension) diabetes mellitus treatment for dogs and cats; Panacur (fenbendazole)/ Safeguard (fenbendazole) broad-spectrum anthelmintic (de-wormer) for use in many animals; Regumate (altrenogest) fertility management for horses; Prestige vaccine line for horses; Scalibor (Deltamethrin) /Exspot for protecting against bites from fleas, ticks, mosquitoes and sandflies; and Sure Petcare products for companion animal identification and well-being, including the microchip and pet recovery system Home Again .
The Company’s climate goals include reducing Scope 1 and 2 operational GHG emissions 46% by 2030 (from a 2019 baseline), sourcing 100% of its purchased electricity from renewable sources by 2025, and reducing Scope 3 GHG emissions 30% by 2030 (from a 2019 baseline).
The Company’s climate goals include reducing Scope 1 and 2 operational GHG emissions 46% by 2030 (from a 2019 baseline), continuing to source 100% of its purchased electricity from renewable sources, and reducing Scope 3 GHG emissions 30% by 2030 (from a 2019 baseline).
In 2019, the government implemented the VBP program through a tendering process for mature products which have generic substitutes with a Generic Quality Consistency Evaluation approval. Mature products that have entered into the last five rounds of VBP had, on average, a price reduction of more than 50%.
The government has implemented the VBP program through a tendering process for mature products which have generic substitutes with a Generic Quality Consistency Evaluation approval. Mature products that have entered into the latest rounds of VBP had, on average, a price reduction of more than 50%.
In addition, Keytruda is approved in combination with chemotherapy for the treatment of certain patients with advanced NSCLC, advanced malignant pleural mesothelioma, HNSCC, advanced biliary tract cancer, advanced esophageal cancer, advanced TNBC, and advanced or recurrent endometrial carcinoma; in combination with chemotherapy with or without bevacizumab, and in combination with chemoradiotherapy, for the treatment of certain patients with advanced cervical cancer; in combination with trastuzumab and chemotherapy for the treatment of certain patients with advanced human epidermal growth factor receptor 2 (HER2)-positive gastric or GEJ adenocarcinoma with programmed death-ligand 1 (PD-L1) (CPS ≥1), and in combination with chemotherapy for the treatment of certain patients with advanced HER2-negative gastric or GEJ adenocarcinoma; in combination with axitinib for the treatment of certain patients with advanced RCC; in combination with Lenvima (lenvatinib) for the treatment of certain patients with advanced RCC or advanced endometrial carcinoma; and in combination with enfortumab vedotin for certain patients with locally advanced or metastatic urothelial cancer.
In addition, Keytruda is approved in combination with chemotherapy for the treatment of certain patients with advanced NSCLC, advanced malignant pleural mesothelioma, HNSCC, advanced biliary tract cancer, advanced esophageal cancer, advanced TNBC, and advanced or recurrent endometrial carcinoma; in combination with chemotherapy with or without bevacizumab, and in combination with chemoradiotherapy, for the treatment of certain patients with advanced cervical cancer; in combination with trastuzumab and chemotherapy for the treatment of certain patients with advanced human epidermal growth factor receptor 2 (HER2)-positive gastric or GEJ adenocarcinoma, and in combination with chemotherapy for the treatment of certain patients with advanced HER2-negative gastric or GEJ adenocarcinoma; in combination with axitinib for the treatment of certain patients with advanced RCC; in combination with Lenvima (lenvatinib) for the treatment of certain patients with advanced RCC or advanced endometrial carcinoma; in combination with enfortumab vedotin for certain patients with locally advanced or metastatic urothelial cancer; and in combination with chemotherapy with or without bevacizumab for certain patients with platinum-resistant ovarian cancer.
Research and Development The Company’s business is characterized by the introduction of new products or new uses for existing products through a strong research and development program. At December 31, 2024, approximately 23,500 people were employed in the Company’s research activities.
Research and Development The Company’s business is characterized by the introduction of new products or new uses for existing products through a strong research and development program. At December 31, 2025, approximately 24,700 people were employed in the Company’s research activities.
For a further discussion of sales of the Company’s products, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below. Product Approvals Set forth below is a summary of significant product approvals received by the Company in 2024 and, to date, in 2025. Product Date Approval Keytruda January 2024 U.S.
For a further discussion of sales of the Company’s products, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below. Product Approvals Set forth below is a summary of significant product approvals received by the Company in 2025 and, to date, in 2026.
Expenditures for remediation and environmental liabilities were $4 million in 2024 and are estimated to be $26 million in the aggregate for the years 2025 through 2029. These amounts do not consider potential recoveries from other parties.
Expenditures for remediation and environmental liabilities were $8 million in 2025 and are estimated to be $26 million in the aggregate for the years 2026 through 2030. These amounts do not consider potential recoveries from other parties.
Securities and Exchange Commission (SEC). The address of that website is sec.gov . In addition, the Company will provide without charge a copy of its Annual Report on Form 10-K, including financial statements and schedules, upon the written request of any shareholder to the Office of the Secretary, Merck & Co., Inc., 126 East Lincoln Avenue, Rahway, NJ 07065 U.S.A.
In addition, the Company will provide without charge a copy of its Annual Report on Form 10-K, including financial statements and schedules, upon the written request of any shareholder to the Office of the Secretary, Merck & Co., Inc., 126 East Lincoln Avenue, Rahway, NJ 07065 U.S.A.
In addition, the Company expects that Keytruda will be selected in 2026 for government price setting, which would become effective on January 1, 2028 and the Company expects that, as a result, U.S. sales of Keytruda will decline after that time.
Furthermore, the Company expects that Keytruda will be selected in 2027 for government price setting, which would become effective on January 1, 2029, and the Company expects that, as a result, U.S. sales of Keytruda will decline materially after that time.
Bomedemstat has FDA 18 Table of Content s Orphan Drug and Fast Track Designation for the treatment of essential thrombocythemia and myelofibrosis, Orphan Drug Designation for the treatment of acute myeloid leukemia and PRIME scheme designation by the EMA for the treatment of myelofibrosis. • MK-5684, opevesostat, is an investigational cytochrome P450 11A1 (CYP11A1) inhibitor being evaluated for the treatment of certain patients with metastatic castration-resistant prostate cancer. • MK-7339, Lynparza, is an oral PARP inhibitor being evaluated in combination with Keytruda for expanded indications in the therapeutic areas of NSCLC and SCLC.
Bomedemstat has FDA Orphan Drug and Fast Track Designation for the treatment of essential thrombocythemia and myelofibrosis, Orphan Drug Designation for the treatment of acute myeloid leukemia and PRIME scheme designation by the EMA for the treatment of myelofibrosis. • MK-5684, opevesostat, is an investigational cytochrome P450 11A1 (CYP11A1) inhibitor being evaluated for the treatment of certain patients with metastatic castration-resistant prostate cancer. • MK-6482, Welireg , is being developed for expanded indications in RCC in combination with Keytruda and Lenvima, and in other combinations. • MK-7339, Lynparza, is an oral PARP inhibitor being evaluated in combination with Keytruda for expanded indications in the therapeutic areas of NSCLC and small cell lung cancer (SCLC).
Japan In Japan, the Company submits new drug applications to the PMDA for its pharmaceutical regulatory review. The PMDA is an independent administrative agency which is under the jurisdiction of the Ministry of Health, Labor and Welfare (MHLW).
Japan In Japan, the Company submits new drug applications to the Pharmaceuticals and Medical Devices Agency (PMDA) for its pharmaceutical regulatory review. The PMDA is an independent administrative agency which is under the jurisdiction of the MHLW.
In addition, in 2024, the FDA authorized, for a two-year period, Florida’s application to import prescription drugs from Canada. Regulatory Changes The pharmaceutical industry also could be considered a potential source of savings via other legislative and administrative proposals that have been debated but not enacted. These types of revenue generating or cost saving proposals include additional direct price controls.
In addition, in 2024, the FDA authorized, for a two-year period, Florida’s application to import prescription drugs from Canada. Regulatory Changes The pharmaceutical industry also could be considered a potential source of savings via other legislative and administrative proposals that have been debated but not enacted.
Welireg (belzutifan) is a medication for the treatment of adult patients with certain von Hippel-Lindau (VHL) disease-associated tumors not requiring immediate surgery, and for the treatment of adult patients with advanced RCC following a PD-1 or PD-L1 inhibitor and a vascular endothelial growth factor tyrosine kinase inhibitor.
Welireg (belzutifan) is a medication for the treatment of adult patients with certain von Hippel-Lindau (VHL) disease-associated tumors not requiring immediate surgery, for the treatment of adult patients with advanced RCC following a PD-1 or programmed death-ligand 1 (PD-L1) inhibitor and a vascular endothelial growth factor tyrosine kinase inhibitor (TKI) and for treatment of adult and pediatric patients 12 years and older with certain types of pheochromocytoma or paraganglioma.
Government price setting may also impact pricing in the private market negatively affecting the Company’s performance. In August 2023, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), selected Januvia for the first year of the IRA’s “Drug Price Negotiation Program” (Program).
Government price setting may also impact pricing in the private market negatively affecting the Company’s performance. HHS, through the Centers for Medicare & Medicaid Services (CMS), selected Januvia in 2023 for the first year of the IRA’s “Drug Price Negotiation Program” (Program), and selected Janumet and Janumet XR in 2025 for the second year of the Program.
The Company expects VBP to be a semi-annual process that will have a significant impact on mature products moving forward. 9 Table of Content s Emerging Markets The Company’s focus on emerging markets, in addition to China, has continued.
The Company expects that the VBP process will have a significant impact on mature products moving forward. Emerging Markets The Company’s focus on emerging markets, in addition to China, has continued.
Cardiovascular Winrevair (sotatercept-csrk), an activin signaling inhibitor indicated for the treatment of adults with pulmonary arterial hypertension (PAH) (World Health Organization [WHO] Group 1) to increase exercise capacity, 2 Table of Content s improve WHO functional class and reduce the risk of clinical worsening events; Adempas (riociguat), a cardiovascular drug for the treatment of chronic thromboembolic pulmonary hypertension or pulmonary arterial hypertension in certain patients; and Verquvo (vericiguat), a medicine to reduce the risk of cardiovascular death and heart failure hospitalization following a hospitalization for heart failure or need for outpatient intravenous diuretics in certain adults with symptomatic chronic heart failure and reduced ejection fraction.
Cardiometabolic and Respiratory Winrevair (sotatercept-csrk), an activin signaling inhibitor indicated for the treatment of adults with pulmonary arterial hypertension (PAH, Group 1 pulmonary hypertension) to improve exercise capacity and World Health Organization (WHO) functional class (FC), and reduce the risk of clinical worsening events including hospitalization for PAH, lung transplantation and death; Adempas (riociguat), a cardiovascular drug for the treatment of chronic thromboembolic pulmonary hypertension or PAH in certain patients; Verquvo (vericiguat), a medicine to reduce the risk of cardiovascular death and heart failure hospitalization following a hospitalization for heart failure or need for outpatient intravenous diuretics in certain adults with symptomatic chronic heart failure and reduced ejection fraction; and Ohtuvayre (ensifentrine), an inhaled PDE3/4 inhibitor indicated for the maintenance treatment of chronic obstructive pulmonary disease (COPD) in adults.
Human Capital As of December 31, 2024, the Company had approximately 75,000 employees worldwide, with approximately 31,000 employed in the U.S., including Puerto Rico, and approximately 15,000 third-party contractors globally. Third-party contractors include the Company’s temporary workers, independent contractors, and freelancers who are viewed as full-time equivalent employees; they exclude outsourced service providers.
Human Capital As of December 31, 2025, the Company had approximately 75,000 employees worldwide, including approximately 30,000 people in the U.S., including Puerto Rico, and approximately 15,000 third-party contractors globally. Third-party contractors include temporary workers, independent contractors, and freelancers who are considered full-time equivalent employees; outsourced service providers are excluded. Approximately 73,000 employees are full-time employees.
The Company is diversifying its oncology portfolio and executing on its strategy which is broadly based on three strategic pillars: immuno-oncology, precision molecular targeting and tissue targeting. Merck has numerous Phase 3 oncology programs within these pillars.
Lenvima is being developed as part of a collaboration with Eisai Co., Ltd. The Company is diversifying its oncology portfolio and executing on its strategy which is broadly based on three strategic pillars: immuno-oncology, precision molecular targeting and tissue targeting. Merck has numerous Phase 3 oncology programs within these pillars.
The FDA and EMA granted Breakthrough Therapy designation and Priority Medicines (PRIME) scheme designation, respectively, for V940 (mRNA-4157) in combination with Keytruda for the adjuvant treatment of patients with certain stages of high-risk melanoma following complete resection. V940 (mRNA-4157) is also being evaluated as adjuvant and perioperative treatment for certain patients with NSCLC.
The FDA and EMA granted Breakthrough Therapy designation and Priority Medicines (PRIME) scheme designation, respectively, for intismeran autogene in combination with Keytruda for the adjuvant treatment of patients with certain stages of high-risk melanoma following complete resection.
A company seeking to market an innovative pharmaceutical product through the centralized procedure must file a complete set of safety data and efficacy data as part of a Marketing Authorization Application (MAA) with the 16 Table of Content s European Medicines Agency (EMA).
A company seeking to market an innovative pharmaceutical product through the centralized procedure must file a complete set of safety data and efficacy data as part of a Marketing Authorization Application (MAA) with the European Medicines Agency (EMA). After the EMA evaluates the MAA, it provides a recommendation to the EC and the EC then approves or denies the MAA.
May 2024 Japan’s Ministry of Health, Labor and Welfare (MHLW) approval in combination with fluoropyrimidine and platinum-containing chemotherapy for the first-line treatment of patients with locally advanced unresectable or metastatic gastric or GEJ adenocarcinoma, based on the KEYNOTE-859 trial.
May 2025 Japan’s Ministry of Health, Labor and Welfare (MHLW) approval in combination with trastuzumab and chemotherapy for the first-line treatment of patients with unresectable, advanced or recurrent HER2-positive gastric or GEJ adenocarcinoma, based on the KEYNOTE-811 trial.
For example, the number of compounds available to treat a particular disease typically increases over time and can result in slowed sales growth or reduced sales of the Company’s products in that therapeutic category.
However, the introduction of new products and processes by competitors may result in price reductions and product displacements, even for products protected by patents. For example, the number of compounds available to treat a particular disease typically increases over time and can result in slowed sales growth or reduced sales of the Company’s products in that therapeutic category.
An adverse result in a patent dispute can preclude commercialization of products or negatively affect sales of existing products and could result in the payment of royalties or in the recognition of an impairment charge with respect to intangible assets associated with certain products.
An adverse result in a patent dispute can preclude commercialization of products or negatively affect sales of existing products and could result in the payment of royalties or in the recognition of an impairment charge with respect to intangible assets associated with certain products. 6 Table of Contents Pharmaceutical competition involves a rigorous search for technological innovations and the ability to market these innovations effectively.
In the U.S., the regulatory data/marketing protection term generally runs five years from first marketing approval of a new chemical entity, extended to seven years for an orphan drug indication, and twelve years from first marketing approval of a biological product. 12 Table of Content s The table below provides a list of expiration dates, which include any pending PTE and SPC periods where indicated, for the key patent protection in the U.S., the EU, Japan and China for the following marketed products: Product Year of Expiration (U.S.) Year of Expiration (EU) (1) Year of Expiration (Japan) (2) Year of Expiration (China) Januvia 2026 (3) Expired 2025-2026 Expired Janumet 2026 (3) Expired N/A Expired Janumet XR 2026 (3) N/A N/A Expired Isentress Expired (4) Expired 2026 (5) Expired Lenvima (6) 2026 2026 (7) 2026 Expired Bridion 2026 Expired Expired Expired Bravecto 2027 2029 2029 2025 Gardasil 2028 Expired Expired Expired Gardasil 9 2028 2030 (7) 2030 2025 Keytruda 2028 (8) 2031 2032-2033 2028 Lynparza (9) 2027 (7) (with pending PTE) 2029 (7) 2028-2029 Expired Winrevair 2027 (10) 2026 (10) N/A N/A Adempas (11) N/A (12) 2028 (7) 2027-2028 Expired Belsomra 2029 N/A 2031 N/A Prevymis 2029 2029 (13) 2029 Expired Vaxneuvance 2031 (14) No Patent (15) No Patent (15) N/A Welireg 2035 (with pending PTE) N/A N/A N/A Capvaxive 2038 N/A N/A N/A Note: Compound patent unless otherwise noted.
The table below provides a list of expiration dates, which include any pending PTE and SPC periods where indicated, for the key patent protection in the U.S., the EU, Japan and China for the following marketed products: Product Year of Expiration (U.S.) Year of Expiration (EU) (1) Year of Expiration (Japan) (2) Year of Expiration (China) Januvia 2026 (3) Expired 2026 Expired Janumet 2026 (3) Expired N/A Expired Janumet XR 2026 (3) N/A N/A N/A Lenvima (4) 2026 (5) 2027 2026 Expired Bridion 2026 Expired Expired Expired Bravecto 2027 2029 2029 Expired Lynparza (6) 2027 (7) 2029 (7) 2028-2029 Expired Winrevair 2027 (8) 2026 (8) 2031 (with pending PTE) (8) 2026 Gardasil 2028 Expired Expired Expired Gardasil 9 2028 2030 (9) 2030 (9) Expired Keytruda 2028 (10) 2031 2032-2033 2028 Adempas (11) N/A (12) 2028 (7) 2027-2028 Expired Prevymis 2029 2029 (13) 2029 Expired Vaxneuvance 2031 (9)(14) No Patent (15) No Patent (15) N/A Welireg 2035 (with pending PTE) 2034 (patent), 2039 (SPCs) 2039 (with pending PTE) 2034 Ohtuvayre 2035 (with pending PTE) (16) N/A N/A N/A (17) Capvaxive 2038 (9) 2038 (patent) (9)(18) 2040 (with pending PTE) (9) N/A Enflonsia 2039 (with pending PTE) N/A N/A N/A Keytruda Qlex 2043 2031 (19) N/A N/A Note: Compound patent unless otherwise noted.
Pursuant to the IRA’s Program, a government price was set for Januvia , which will become effective on January 1, 2026. In January 2025, HHS announced that Janumet and Janumet XR have been selected for government price setting, which will become effective on January 1, 2027.
Pursuant to the IRA’s Program, the government set a price for Januvia , which became effective on January 1, 2026, and set a price for Janumet and Janumet XR , which will become effective on January 1, 2027.
The Company also has the following key U.S. patent protection for drug candidates in Phase 3 development: Phase 3 Drug Candidate Currently Anticipated Year of Expiration (in the U.S.) MK-8591A (doravirine + islatravir) (1) 2032 MK-2400 (ifinatamab deruxtecan) (2) 2034 MK-1308A (quavonlimab + pembrolizumab) 2035 MK-1026 (nemtabrutinib) 2035 V940 (2) 2036 MK-3543 (bomedemstat) 2036 MK-5684 (opevesostat) 2037 MK-8591D (islatravir + lenacapavir) (1)(2) 2037 (with pending PTE for lenacapavir patent) MK-2140 (zilovertamab vedotin) 2038 MK-4482 Lagevrio (2)(3) 2038 MK-2870 (sacituzumab tirumotecan) (2) 2040 MK-3475A (pembrolizumab + hyaluronidase subcutaneous) 2039 MK-0616 (enlicitide decanoate) 2040 MK-1084 2040 MK-7240 (tulisokibart) 2040 MK-3000 (4) 2041 (1) On partial clinical hold for higher doses of islatravir than those used in current clinical trials.
Currently Anticipated Year of Expiration (in the U.S.) MK-8591A (doravirine + islatravir) 2032 The Company also has the following key U.S. patent protection for drug candidates in Phase 3 development: Phase 3 Drug Candidate Currently Anticipated Year of Expiration (in the U.S.) V181 2029 MK-2400 (ifinatamab deruxtecan) (1) 2034 MK-1022 (patritumab deruxtecan) (1) 2035 MK-1308A (quavonlimab + pembrolizumab) 2035 MK-1026 (nemtabrutinib) 2035 MK-8527 2035 V940 (intismeran autogene) (1) 2036 MK-3543 (bomedemstat) 2036 MK-5684 (opevesostat) 2037 MK-8591D (islatravir + lenacapavir) (1)(2) 2037 MK-2140 (zilovertamab vedotin) 2038 MK-4482 Lagevrio (1)(3) 2038 MK-5909 (raludotatug deruxtecan) (1) 2038 MK-1406 (4) 2039 MK-2870 (sacituzumab tirumotecan) (1) 2040 MK-0616 (enlicitide decanoate) 2040 MK-7240 (tulisokibart) 2040 MK-1084 (calderasib) (1) 2041 MK-3000 (5) 2041 (1) Being developed in a collaboration.
September 2024 FDA approval in combination with pemetrexed and platinum chemotherapy for the first-line treatment of adult patients with unresectable advanced or metastatic malignant pleural mesothelioma, based on the IND.227/KEYNOTE-483 trial.
April 2025 European Commission (EC) approval in combination with pemetrexed and platinum chemotherapy for the first-line treatment of adult patients with unresectable non epithelioid malignant pleural mesothelioma, based on the IND.227/KEYNOTE-483 trial.
Vaccines Gardasil (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant)/ Gardasil 9 (Human Papillomavirus 9-valent Vaccine, Recombinant), vaccines to help prevent certain cancers and diseases caused by certain types of human papillomavirus (HPV); ProQuad (Measles, Mumps, Rubella and Varicella Virus Vaccine Live), a pediatric combination vaccine to help protect against measles, mumps, rubella and varicella; M−M−R II (Measles, Mumps and Rubella Virus Vaccine Live), a vaccine to help prevent measles, mumps and rubella; Varivax (Varicella Virus Vaccine Live), a vaccine to help prevent chickenpox (varicella); Vaxneuvance (Pneumococcal 15-valent Conjugate Vaccine), a vaccine to help prevent invasive pneumococcal disease in individuals 6 weeks of age and older; RotaTeq (Rotavirus Vaccine, Live Oral, Pentavalent), a vaccine to help protect against rotavirus gastroenteritis in infants and children; and Pneumovax 23 (pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease.
Vaccines Gardasil (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant)/ Gardasil 9 (Human Papillomavirus 9-valent Vaccine, Recombinant), vaccines to help prevent certain cancers and diseases caused by certain types of human papillomavirus (HPV); ProQuad (Measles, Mumps, Rubella and Varicella Virus Vaccine Live), a pediatric combination vaccine to help protect against measles, mumps, rubella and varicella; M−M−R II (Measles, Mumps and Rubella Virus Vaccine Live), a vaccine to help prevent measles, mumps and rubella; Varivax 2 Table of Contents (Varicella Virus Vaccine Live), a vaccine to help prevent chickenpox (varicella); Vaxneuvance (Pneumococcal 15-valent Conjugate Vaccine), a vaccine to help prevent invasive pneumococcal disease in individuals 6 weeks of age and older; RotaTeq (Rotavirus Vaccine, Live Oral, Pentavalent), a vaccine to help protect against rotavirus gastroenteritis in infants and children; Capvaxive (Pneumococcal 21-valent Conjugate Vaccine), a vaccine to help prevent invasive pneumococcal disease and pneumococcal pneumonia in adults; Enflonsia (clesrovimab-cfor), a long acting monoclonal antibody for the prevention of respiratory syncytial virus (RSV) lower respiratory tract disease in neonates and infants who are born during or entering their first RSV season; and Pneumovax 23 (pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease.
In 2024, for the fifth year in a row, the Company received the Peter J. Dunn Award for Green Chemistry and Engineering Impact, an award given by the American Chemical Society in recognition of outstanding implementation of novel green chemistry in the pharmaceutical industry. • Waste diversion .
Dunn Award for Green Chemistry and Engineering Impact for four of the past five years, an award given by the American Chemical Society in recognition of outstanding implementation of novel green chemistry in the pharmaceutical industry. • Waste diversion .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe following is a summary of the principal risk factors facing the Company: • The Company is dependent on its patent rights, and if its patent rights are invalidated or circumvented, its business could be materially adversely affected. • As the Company’s products lose market exclusivity, the Company generally experiences a significant and rapid loss of sales from those products. • Key products generate a significant amount of the Company’s profits and cash flows, and any events that adversely affect the markets for its leading products could have a material adverse effect on the Company’s results of operations and financial condition. • The Company’s research and development efforts may not succeed in developing commercially successful products and the Company may not be able to acquire commercially successful products in other ways; consequently, the Company may not be able to replace sales of successful products that lose patent protection. • The Company’s success is dependent on the successful development and marketing of new products, which are subject to substantial risks. • The Company faces continued pricing pressure with respect to its products. • Unfavorable or uncertain economic conditions, together with cost-reduction measures being taken by certain governments, could negatively affect the Company’s operating results. • The Company faces intense competition from both lower cost generic and biosimilar products and competitors’ products. • The Company has significant global operations, which expose it to additional risks, and any adverse event could have a material adverse effect on the Company’s results of operations and financial condition. • Climate change or legal, regulatory or market measures to address climate change may negatively affect the Company’s business, results of operations, cash flows and prospects. • Environmental, social and governance matters may impact the Company’s business and reputation. • Failure to attract and retain highly qualified personnel could affect the Company’s ability to successfully develop and commercialize products. 26 Table of Content s • The Company may experience difficulties and delays in manufacturing certain of its products, including vaccines. • The Company’s business in China has grown in the past few years, and the importance of China to the Company’s overall pharmaceutical and vaccines business has increased accordingly.
Biggest changeThe following is a summary of the principal risk factors facing the Company: 26 Table of Contents • The Company is dependent on its patent rights, and if its patent rights are invalidated or circumvented, its business could be materially adversely affected. • As the Company’s products lose market exclusivity, the Company generally experiences a significant and rapid loss of sales from those products. • Key products generate a significant amount of the Company’s profits and cash flows, and any events that adversely affect the markets for its leading products could have a material adverse effect on the Company’s results of operations, cash flows, financial condition, and prospects. • The Company’s research and development efforts may not succeed in developing commercially successful products and the Company may not be able to acquire commercially successful products in other ways; consequently, the Company may not be able to replace sales of successful products that lose patent protection. • The Company’s success is dependent on the successful development and marketing of new products, which are subject to substantial risks. • The Company faces continued pricing pressure with respect to its products in the public and private sectors. • Unfavorable or uncertain economic conditions, together with cost-reduction measures being taken by the U.S. and other countries, could negatively affect the Company’s operating results. • The Company faces intense competition from both lower cost generic and biosimilar products and competitors’ products. • The Company has significant global operations, which expose it to additional risks, and any adverse event could have a material adverse effect on the Company’s results of operations, cash flows, financial condition, and prospects. • Climate change or legal, regulatory or market measures to address climate change may negatively affect the Company’s business, results of operations, cash flows, financial condition, and prospects. • Environmental, social and governance matters may impact the Company’s business and reputation. • Failure to attract and retain highly qualified personnel could affect the Company’s ability to successfully develop and commercialize products. • The Company may experience difficulties and delays in manufacturing certain of its products, including vaccines. • The Company’s business in China experienced significantly lower sales of Gardasil/Gardasil 9 in 2025 and the Company expects that sales of Gardasil/Gardasil 9 in China will not materially increase in 2026.
Loss of patent protection for a product typically is followed promptly by generic or biosimilar substitutes, reducing the Company’s sales of that product. Availability of generic substitutes for the Company’s drugs may adversely affect its results of operations and cash flows.
Loss of patent protection for a product typically is followed promptly by generic or biosimilar substitutes, reducing the Company’s sales of that product. Availability of generic or biosimilar substitutes for the Company’s drugs may adversely affect its results of operations and cash flows.
For example, in the U.S., a BLA, including both preclinical and clinical trial data and extensive data regarding the manufacturing procedures, is required for human vaccine candidates, and FDA approval is generally required for the release of each manufactured commercial human vaccine lot. • Manufacturing biologics and vaccines, especially in large quantities, is complex and may require the use of innovative technologies to handle living micro-organisms.
For example, in the U.S., a BLA, including both preclinical and clinical trial data and extensive data regarding manufacturing procedures, is required for human vaccine candidates, and FDA approval is generally required for the release of each manufactured commercial human vaccine lot. • Manufacturing biologics and vaccines, especially in large quantities, is complex and may require the use of innovative technologies to handle living micro-organisms.
Even after a product reaches the market, certain developments following regulatory approval may decrease demand for the Company’s products, including the following: • results in post-approval Phase 4 trials or other studies; • the re-review of products that are already marketed; • the recall or loss of marketing approval of products that are already marketed; • changing government standards or public expectations regarding safety, efficacy, quality or labeling changes; • scrutiny of advertising and promotion; and • the withdrawal of indications granted pursuant to accelerated approvals.
Even after a product reaches the market, certain developments following regulatory approval may decrease demand for the Company’s products, including the following: • results in post-approval Phase 4 trials or other studies; • the re-review of products or indications that are already marketed; • the recall or loss of marketing approval of products that are already marketed; • changing government standards or public expectations regarding safety, efficacy, quality or labeling changes; • scrutiny of advertising and promotion; and • the withdrawal of indications granted pursuant to accelerated approvals.
Risks inherent in conducting a global business include: • changes in medical reimbursement policies and programs and pricing restrictions in key markets; • multiple regulatory requirements that could restrict the Company’s ability to manufacture and sell its products in key markets; • trade protection measures and import or export licensing requirements, including the imposition of trade sanctions or similar restrictions by the U.S. or other governments; • foreign exchange fluctuations; • diminished protection of intellectual property in some countries; and • possible nationalization and expropriation.
Risks inherent in conducting a global business include: • changes in medical reimbursement policies and programs and pricing restrictions in key markets; • multiple regulatory requirements that could restrict the Company’s ability to manufacture and sell its products in key markets; • trade protection measures and import or export licensing requirements, including the imposition of trade sanctions or similar restrictions by the U.S. or other governments; • the imposition of tariffs by the U.S. or other governments; • foreign exchange fluctuations; • diminished protection of intellectual property in some countries; and • possible nationalization and expropriation.
Furthermore, the sales of new products may prove to be disappointing and fail to reach anticipated levels. • Pricing pressures, both in the U.S. and abroad, including rules and practices of managed care groups, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and health care reform, pharmaceutical reimbursement and pricing in general. • Changes in government laws and regulations, including laws governing intellectual property, and the enforcement thereof affecting the Company’s business. • Efficacy or safety concerns with respect to marketed products, whether or not scientifically justified, leading to product recalls, withdrawals or declining sales. • Significant changes in customer relationships or changes in the behavior and spending patterns of purchasers of health care products and services, including delaying medical procedures, rationing prescription medications, reducing the frequency of physician visits and foregoing health care insurance coverage. • Legal factors, including product liability claims, antitrust litigation and governmental investigations, including tax disputes, environmental concerns and patent disputes with branded and generic competitors, any of which could preclude commercialization of products or negatively affect the profitability of existing products. • Cyber-attacks on the Company’s or third-party providers’ IT systems, which could disrupt the Company’s operations. • Lost market opportunity resulting from delays and uncertainties in the approval process of the FDA and/or foreign regulatory authorities. • Increased focus on privacy issues in countries around the world, including the U.S., the EU, and China.
Furthermore, the sales of new products may prove to be disappointing and fail to reach anticipated levels. • Pricing pressures in the public and private sectors, both in the U.S. and abroad, including rules and practices of managed care groups, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and health care reform, pharmaceutical reimbursement and pricing in general. • Changes in government laws and regulations, including laws governing intellectual property, and the enforcement thereof affecting the Company’s business. • Efficacy or safety concerns with respect to marketed products, whether or not scientifically justified, leading to product recalls, withdrawals or declining sales. • Significant changes in customer relationships or changes in the behavior and spending patterns of purchasers of health care products and services, including delaying medical procedures, rationing prescription medications, reducing the frequency of physician visits and foregoing health care insurance coverage. • Legal factors, including product liability claims, antitrust litigation and governmental investigations, including tax disputes, environmental concerns and patent disputes with branded and generic competitors, any of which could preclude commercialization of products or negatively affect the profitability of existing products. • Cyber-attacks on the Company’s or third-party providers’ IT systems, which could disrupt the Company’s operations. • Lost market opportunity resulting from delays and uncertainties in the approval process of the FDA and/or foreign regulatory authorities. • Increased focus on privacy issues in countries around the world, including the U.S., the EU, and China.
While pricing pressure has always existed in China, health care reform has increased this pressure in part due to the acceleration of generic substitution through the government’s VBP program. In 2019, the government implemented the VBP program through a tendering process for mature products which have generic substitutes with a Generic Quality Consistency Evaluation approval.
While pricing pressure has always existed in China, health care reform has increased this pressure in part due to the acceleration of generic substitution through the government’s VBP program. The government has implemented the VBP program through a tendering process for mature products which have generic substitutes with a Generic Quality Consistency Evaluation approval.
Also, continued growth of the Company’s business in China is dependent upon ongoing development of a favorable environment for innovative pharmaceutical products and vaccines, sustained access for the Company’s currently marketed products, and the absence of trade impediments or adverse pricing controls. As noted above in Item 1.
Also, growth of the Company’s business in China is dependent upon ongoing development of a favorable environment for innovative pharmaceutical products and vaccines, sustained access for the Company’s currently marketed products, and the absence of trade impediments or adverse pricing controls. As noted above in Item 1.
The Company cannot be sure that it will be able to attract and retain qualified personnel or that the costs of doing so will not materially increase. The Company may experience difficulties and delays in manufacturing certain of its products, including vaccines. Merck from time to time experiences difficulties in manufacturing certain of its products, including vaccines.
The Company cannot be certain that it will be able to attract and retain qualified personnel or that the costs of doing so will not materially increase. The Company may experience difficulties and delays in manufacturing certain of its products, including vaccines. Merck from time to time experiences difficulties in manufacturing certain of its products, including vaccines.
New product candidates may appear promising in development but fail to reach the market because of efficacy or safety concerns, the inability to obtain necessary regulatory approvals, the difficulty or excessive cost to manufacture and/or the infringement of patents or intellectual property rights of others.
New product candidates or uses may appear promising in development but fail to reach the market because of efficacy or safety concerns, the inability to obtain necessary regulatory approvals, the difficulty or excessive cost to manufacture and/or the infringement of patents or intellectual property rights of others.
The outcome of the lengthy and complex process of new product development is inherently uncertain. A drug candidate can fail at any stage of the process and one or more late-stage product candidates could fail to receive regulatory approval.
The outcome of the lengthy and complex process of development of new product candidates and uses is inherently uncertain. A drug candidate can fail at any stage of the process and one or more late-stage product candidates could fail to receive regulatory approval.
If the Company does not meet the evolving and varied regulatory requirements and expectations of its investors, customers and other stakeholders, the Company could experience negative impacts to the Company’s business and results of operations.
If the Company does not meet the rapidly evolving and varied regulatory requirements and expectations of its investors, customers and other stakeholders, the Company could experience negative impacts to the Company’s business and results of operations.
Each phase of testing is highly regulated and during each phase there is a substantial risk that the Company will encounter serious obstacles or will not achieve its goals. Therefore, the Company may abandon a product in which it has invested substantial amounts of time and resources.
Each phase of testing is highly regulated and during each phase there is a substantial risk that the Company will encounter serious obstacles or will not achieve its goals. Therefore, the Company may abandon a product candidate or use in which it has invested substantial amounts of time and resources.
The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing amount of focus on privacy and data protection issues with the potential to affect directly the Company’s business, including laws in a majority of states in the U.S. requiring security breach notification. • Changes in tax laws including changes related to the taxation of foreign earnings. • Changes in accounting pronouncements promulgated by standard-setting or regulatory bodies, including the Financial Accounting Standards Board and the SEC, that are adverse to the Company. 40 Table of Content s • Economic factors over which the Company has no control, including changes in inflation, interest rates and foreign currency exchange rates.
The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing amount of focus on privacy and data protection issues with the potential to affect directly the Company’s business, including laws in a majority of states in the U.S. requiring security breach notification. • Changes in tax laws including changes related to the taxation of foreign earnings. • Changes in accounting pronouncements promulgated by standard-setting or regulatory bodies, including the Financial Accounting Standards Board and the SEC, that are adverse to the Company. 41 Table of Contents • Economic factors over which the Company has no control, including changes in inflation, interest rates and foreign currency exchange rates.
In addition, the Company’s sales performance in 2024 was negatively affected by other cost-reduction measures taken by governments and other third parties to lower health care costs, including in the U.S., the expansion of the Federal 340B Drug Discount Program.
In addition, the Company’s sales performance in 2025 was negatively affected by other cost-reduction measures taken by governments and other third parties to lower health care costs, including in the U.S., the expansion of the Federal 340B Drug Discount Program.
Any negative event with respect to Bravecto could have a material adverse effect on the Company’s Animal Health sales. If the Animal Health segment of the Company’s business becomes more significant, the impact of any such events on future results of operations could also become more significant.
Any negative event with respect to the Bravecto family of products could have a material adverse effect on the Company’s Animal Health sales. If the Animal Health segment of the Company’s business becomes more significant, the impact of any such events on future results of operations could also become more significant.
Adverse outcomes in current or future legal matters could negatively affect Merck’s business. Current or future litigation, claims, proceedings and government investigations could preclude or delay the commercialization of Merck’s products or could adversely affect Merck’s business, results of operations, cash flows, financial condition and prospects.
Adverse outcomes in current or future legal matters could negatively affect the Company’s business. Current or future litigation, claims, proceedings and government investigations could preclude or delay the commercialization of the Company’s products or could adversely affect the Company’s business, results of operations, cash flows, financial condition and prospects.
In addition, proposals emerge from time to time in the U.S. and other countries for legislation to further encourage the early and rapid approval of generic drugs. Any such proposal that is enacted into law could worsen this substantial negative effect on the Company’s sales, business, cash flows, results of operations, financial condition and prospects.
In addition, proposals emerge from time to time in the U.S. and other countries for legislation to further encourage the early and rapid approval of generic or biosimilar drugs. Any such proposal that is enacted into law could worsen this substantial negative effect on the Company’s business, cash flows, results of operations, financial condition and prospects.
Furthermore, government price setting may also impact pricing in the private market, negatively affecting the Company’s performance. As noted in Item 1. “Competition and the Health Care Environment,” in 2023, HHS selected Januvia for the first year of the IRA’s price setting program, which will result in a government set price becoming effective on January 1, 2026.
Furthermore, government price setting may also impact pricing in the private market, negatively affecting the Company’s performance. As noted in Item 1. “Competition and the Health Care Environment,” in 2023, HHS selected Januvia for the first year of the IRA’s price setting program, which resulted in a government set price becoming effective on January 1, 2026.
Although it is not possible to predict or identify all such factors, they may include the following: • Competition from generic and/or biosimilar products as the Company’s products lose patent protection. • Increased “brand” competition in therapeutic areas important to the Company’s long-term business performance. • The difficulties and uncertainties inherent in new product development.
Although it is not possible to predict or identify all such factors, they may include the following: • Competition from generic and/or biosimilar products as the Company’s products lose patent protection. • Increased “brand” competition in therapeutic areas important to the Company’s long-term business performance. • The difficulties and uncertainties inherent in development of new product candidates or uses.
Although it is the Company’s policy to actively protect its patent rights, generic challenges to the Company’s products can arise at any time, and the Company’s patents may not prevent the emergence of generic competition for its products.
Although it is the Company’s policy to actively protect its patent rights, challenges to the Company’s products can arise at any time, and the Company’s patents may not prevent the emergence of generic or biosimilar competition for its products.
Alternatively, in the case of generic competition, including the generic availability of competitors’ branded products, they may be equally safe and effective products that are sold at a substantially lower price than the Company’s products.
Alternatively, in the case of generic or biosimilar competition, including the generic or biosimilar availability of competitors’ branded products, they may be equally safe and effective products that are sold at a substantially lower price than the Company’s products.
Climate change or legal, regulatory or market measures to address climate change may negatively affect the Company’s business, results of operations, cash flows and prospects. The Company believes that climate change has the potential to negatively affect its business, results of operations, cash flows and prospects.
Climate change or legal, regulatory or market measures to address climate change may negatively affect the Company’s business, results of operations, cash flows, financial condition, and prospects. The Company believes that climate change has the potential to negatively affect its business, results of operations, cash flows and prospects.
Identifying potential new points of unauthorized entry as new communication tools expand also presents new challenges. 39 Table of Content s Cautionary Factors that May Affect Future Results (Cautionary Statements Under the Private Securities Litigation Reform Act of 1995) This report and other written reports and oral statements made from time to time by the Company may contain so-called “forward-looking statements,” all of which are based on management’s current expectations and are subject to risks and uncertainties which may cause results to differ materially from those set forth in the statements.
Identifying potential new points of unauthorized entry as new communication tools expand also presents new challenges. 40 Table of Contents Cautionary Factors that May Affect Future Results (Cautionary Statements Under the Private Securities Litigation Reform Act of 1995) This report and other written reports and oral statements made from time to time by the Company may contain so-called “forward-looking statements,” all of which are based on management’s current expectations and are subject to risks and uncertainties which may cause results to differ materially from those set forth in the statements.
The Company depends upon patents to provide it with exclusive marketing rights for its products for some period of time. Loss of patent protection for one of the Company’s products typically leads to a significant and rapid loss of sales for that product as lower priced generic versions of that drug become available.
The Company depends upon patents to provide it with exclusive marketing rights for its products for some period of time. Loss of patent protection for one of the Company’s products typically leads to a significant and rapid loss of sales for that product as lower priced generic or biosimilar versions become available.
Failure to successfully develop and market new products in the short term or long term would have a material adverse effect on the Company’s business, results of operations, cash flows, financial condition and prospects. The Company faces continued pricing pressure with respect to its products.
Failure to successfully develop and market new products in the short term or long term would have a material adverse effect on the Company’s business, results of operations, cash flows, financial condition and prospects. The Company faces continued pricing pressure with respect to its products in the public and private sectors.
Biologics and vaccines carry unique risks and uncertainties, which could have a material adverse effect on the Company’s future results of operations and financial condition. The successful development, testing, manufacturing and commercialization of biologics and vaccines, particularly human and animal health vaccines, is a long, complex, expensive and uncertain process.
Biologics and vaccines carry unique risks and uncertainties, which could have a material adverse effect on the Company’s future results of operations, cash flows, financial condition, and prospects. The successful development, testing, manufacturing and commercialization of biologics and vaccines, particularly human and animal health vaccines, is a long, complex, expensive and uncertain process.
Events like these, such as the ongoing war between Russia and Ukraine, and the conflict in the Middle East, and/or policy changes with respect to international trade protection measures, could result in material adverse effects on macroeconomic conditions, currency exchange rates and financial markets, and may adversely affect the Company’s business, results of operations, cash flows and financial condition.
Events like these, such as the ongoing war between Russia and Ukraine, and conflict in the Middle East, and/or policy changes with respect to international trade protection measures, could result in material adverse effects on 32 Table of Contents macroeconomic conditions, currency exchange rates and financial markets, and may adversely affect the Company’s business, results of operations, cash flows, financial condition, and prospects.
Expected declines in sales of products after the loss of market exclusivity mean that the Company’s future success is dependent on its pipeline of new products, including new products that it may develop through collaborations and joint ventures and products that it is able to obtain through license or acquisition.
Expected declines in sales of products after the loss of market exclusivity mean that the Company’s future success is dependent on its pipeline of new products, including new products that it may develop 29 Table of Contents through collaborations and joint ventures and products that it is able to obtain through license or acquisition.
Further, court decisions relating to other companies’ patents, potential legislation in both the U.S. and certain foreign markets relating to patents, as well as regulatory initiatives may result in a more general weakening of intellectual property protection.
Further, court decisions relating to other companies’ patents, potential legislation in both the U.S. and 28 Table of Contents certain foreign markets relating to patents, as well as regulatory initiatives may result in a more general weakening of intellectual property protection.
It is too early for the Company to assess which, if any, of the policy changes that have been publicly referenced would be implemented, and the Company cannot predict what additional future changes in the health care industry in general, or the pharmaceutical industry in particular, will occur; however, any changes could have a material adverse effect on the Company’s business, cash flows, results of operations, financial condition and prospects.
It is too early for the Company to assess which, if any, of the regulatory or policy changes that have been publicly referenced would be implemented or how they would impact the market, and the Company cannot predict what additional future changes in the health care industry in general, or the pharmaceutical industry in particular, will occur; however, any changes could have a material adverse effect on the Company’s business, cash flows, results of operations, financial condition and prospects.
In 2022, Congress passed the IRA, which makes significant changes to how drugs are covered and paid for under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, which has taken effect in 2025, and government price setting for certain Medicare Part D drugs, starting in 2026, and Medicare Part B drugs starting in 2028.
In 2022, Congress passed the IRA, which made significant changes to how drugs are covered and paid for under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, which has taken effect in 2025, and government price setting for certain Medicare Part D drugs, 36 Table of Contents starting in 2026, and Medicare Part B drugs starting in 2028.
The Company has significant global operations, which expose it to additional risks, and any adverse event could have a material adverse effect on the Company’s results of operations and financial condition. The extent of the Company’s operations outside the U.S. is significant.
The Company has significant global operations, which expose it to additional risks, and any adverse event could have a material adverse effect on the Company’s results of operations, cash flows, financial condition, and prospects. The extent of the Company’s operations outside the U.S. is significant.
The Company will continually assess the most efficient means to address its risk; however, there can be no guarantee that insurance coverage will be obtained or, if obtained, will be sufficient to fully cover product liabilities that may arise. 38 Table of Content s Risks Related to Technology The Company is increasingly dependent on sophisticated software applications and computing infrastructure, including the use of cloud-based applications and environments.
The Company will continually assess the most efficient means to address its risk; however, there can be no guarantee that insurance coverage will be obtained or, if obtained, will be sufficient to fully cover product liabilities that may arise. 39 Table of Contents Risks Related to Technology The Company is increasingly dependent on sophisticated software applications and computing infrastructure, including the use of cloud-based applications and environments.
The Company’s supply chain would likely be subject to these same transitional risks and would likely pass along any increased costs to the Company, which may affect the Company’s ability to procure raw materials or other supplies required for the operation of the Company’s business at the quantities and levels required.
The Company’s supply chain would likely be subject to similar risks and would likely pass along any increased costs to the Company, which may affect the Company’s ability to procure raw materials or other supplies required for the operation of the Company’s business at the quantities and levels required.
The Company’s products, including products in development, cannot be marketed unless the Company obtains and maintains regulatory approval.
The Company’s products, including products in development, cannot be marketed unless the Company obtains and maintains regulatory approval or authorization.
Additionally, certain foreign governments have indicated that compulsory licenses to patents may be granted in the case of national emergencies or in other circumstances, which could diminish or eliminate sales and profits from those regions and negatively affect the Company’s results of operations.
Additionally, certain foreign governments have indicated that compulsory licenses to patents may be granted in the case of national emergencies or in other circumstances, which could diminish or eliminate sales and profits from those regions and negatively affect the Company’s results of operations, cash flows, financial condition, and prospects.
In addition, in 2021, Congress passed the American Rescue Plan Act, which included a provision that eliminates the statutory cap on rebates drug manufacturers pay to Medicaid beginning in January 2024. These rebates act as a discount off the list price and eliminating the cap means that manufacturer discounts paid to Medicaid can increase.
In addition, in 2021, Congress passed the American Rescue Plan Act, which included a provision that eliminated the statutory cap on rebates drug manufacturers pay to Medicaid. These rebates act as a discount off the list price and eliminating the cap means that manufacturer discounts paid to Medicaid can increase.
These statements are likely to address the Company’s growth strategy, financial results, product approvals, product potential, development programs, environmental or other sustainability initiatives. One must carefully consider any such statement and should understand that many factors could cause actual results to differ materially from the Company’s forward-looking statements.
These statements are likely to address the Company’s growth strategy, financial results, product approvals, product potential, and development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ materially from the Company’s forward-looking statements.
Social media and mobile messaging platforms present risks and challenges. The inappropriate and/or unauthorized use of certain social media and mobile messaging channels could cause brand damage or information leakage or could lead to legal implications, including from the improper collection and/or dissemination of personally identifiable information.
The inappropriate and/or unauthorized use of certain social media and mobile messaging channels could cause brand damage or information leakage or could lead to legal implications, including from the improper collection and/or dissemination of personally identifiable information.
In 2024, the Company experienced lower sales of Gardasil/Gardasil 9 in China and expects that sales of Gardasil/Gardasil 9 in China will decline significantly in 2025. • The Company may not be able to realize the expected benefits of its investments in emerging markets. • The Company is exposed to market risk from fluctuations in currency exchange rates and interest rates. • Pharmaceutical products can develop unexpected safety or efficacy concerns. • Reliance on third-party relationships and outsourcing arrangements could materially adversely affect the Company’s business. • Negative events in the animal health industry could have a material adverse effect on future results of operations and financial condition of the Company or its Animal Health business. • Biologics and vaccines carry unique risks and uncertainties, which could have a material adverse effect on the Company’s future results of operations and financial condition. • The health care industry in the U.S. has been, and will continue to be, subject to increasing regulation and political action. • The Company’s products, including products in development, cannot be marketed unless the Company obtains and maintains regulatory approval. • Developments following regulatory approval may adversely affect sales of the Company’s products. • The Company is subject to a variety of U.S. and international laws and regulations. • The Company is subject to evolving and complex tax laws, which may result in additional liabilities that may affect results of operations and financial condition. • Adverse outcomes in current or future legal matters could negatively affect Merck’s business. • Product liability insurance for products may be limited, cost prohibitive or unavailable. • The Company is increasingly dependent on sophisticated software applications and computing infrastructure, including the use of cloud-based applications and environments.
As a consequence of the reduced sales of Gardasil/Gardasil 9, the Company’s business in China declined significantly. • The Company may not be able to realize the expected benefits of its investments in emerging markets. • The Company is exposed to market risk from fluctuations in currency exchange rates and interest rates. • Pharmaceutical products can develop unexpected safety or efficacy concerns. • Reliance on third-party relationships and outsourcing arrangements could materially adversely affect the Company’s business. • Negative events in the animal health industry could have a material adverse effect on future results of operations and financial condition of the Company or its Animal Health business. • Biologics and vaccines carry unique risks and uncertainties, which could have a material adverse effect on the Company’s future results of operations, cash flows, financial condition, and prospects. • The health care industry in the U.S. has been, and will continue to be, subject to increasing regulation and political action. • The Company’s products, including products in development, cannot be marketed unless the Company obtains and maintains regulatory approval or authorization. 27 Table of Contents • Developments following regulatory approval or authorization may adversely affect sales of the Company’s products. • The Company is subject to a variety of U.S. and international laws and regulations. • The Company is subject to evolving and complex tax laws, which may result in additional liabilities that may affect results of operations and financial condition. • Adverse outcomes in current or future legal matters could negatively affect the Company’s business. • Product liability insurance for products may be limited, cost prohibitive or unavailable. • The Company is increasingly dependent on sophisticated software applications and computing infrastructure, including the use of cloud-based applications and environments.
Furthermore, the Company expects that in 2026 HHS will include Keytruda in a subsequent selection of products to undergo IRA price setting, with such price to become effective on January 1, 2028 and the Company expects that, as a result, U.S. sales of Keytruda will decline after that time.
Furthermore, the Company expects that in 2027 HHS will include Keytruda in a subsequent selection of products to undergo IRA price setting, with such price to become effective on January 1, 2029 and the Company expects that, as a result, U.S. sales of Keytruda will decline materially after that time.
Furthermore, the Company expects that in 2026 HHS will include Keytruda in a subsequent selection of products to undergo IRA price setting, with such price to become effective on January 1, 2028 and the Company expects that, as a result, U.S. sales of Keytruda will decline after that time.
Furthermore, the Company expects that in 2027 HHS will include Keytruda in a subsequent selection of products to undergo IRA price setting, with such price to become effective on January 1, 2029 and the Company expects that, as a result, U.S. sales of Keytruda will decline materially after that time.
The Company faces continued pricing pressure globally and, particularly in mature markets, from managed care organizations, government agencies and programs that could negatively affect the Company’s sales and profit margins.
The Company faces continued pricing pressure globally and, particularly in mature markets, from managed care organizations, government agencies and programs that could negatively affect the Company’s sales 30 Table of Contents and profit margins.
As a result of the Company’s dependence on key products, any event that adversely affects any of these products or the markets for any of these products, such as the slowing demand for Gardasil/Gardasil 9 in China which the Company has experienced, could have a significant adverse impact on results of operations and financial condition.
As a result of the Company’s dependence on key products, any event that adversely affects any of these products or the markets for any of these products, such as the materially lower demand for Gardasil/Gardasil 9 in China which the Company has experienced, could have a significant adverse impact on results of operations, cash flows, financial condition, and prospects.
Uncertainty in global economic and geopolitical conditions may result in a slowdown to the global economy that could affect the Company’s business by reducing the prices that drug wholesalers and retailers, hospitals, government agencies and managed health care providers may be able or willing to pay for the Company’s products or by reducing the demand for the Company’s products, which could in turn negatively impact the Company’s sales and result in a material adverse effect on the Company’s business, cash flows, results of operations, financial condition and prospects. 30 Table of Content s As discussed above in Item 1.
Uncertainty in global economic and geopolitical conditions may result in a slowdown to the global economy that could affect the Company’s business by reducing the prices that drug wholesalers and retailers, hospitals, government agencies and managed health care providers may be able or willing to pay for the Company’s products or by reducing the demand for the Company’s products, which could in turn negatively impact the Company’s sales and result in a material adverse effect on the Company’s business, cash flows, results of operations, financial condition and prospects.
Products that appear promising in development may fail to reach the market or fail to succeed for numerous reasons, including the following: • findings of ineffectiveness, superior safety or efficacy of competing products, or harmful side effects in clinical or preclinical testing; 29 Table of Content s • failure to receive the necessary regulatory approvals, including delays in the approval of new products and new indications, or the anticipated labeling, and uncertainties about the time required to obtain regulatory approvals and the benefit/risk standards applied by regulatory agencies in determining whether to grant approvals; • failure in certain markets to obtain reimbursement commensurate with the level of innovation and clinical benefit presented by the product; • lack of economic feasibility due to manufacturing costs or other factors; and • preclusion from commercialization by the proprietary rights of others.
Product candidates or uses that appear promising in development may fail to reach the market or fail to succeed for numerous reasons, including the following: • findings of ineffectiveness, superior safety or efficacy of competing products, or harmful side effects in clinical or preclinical testing; • failure to receive the necessary regulatory approvals, including delays in the approval of new products and new indications, or the anticipated labeling, and uncertainties about the time required to obtain regulatory approvals and the benefit/risk standards applied by regulatory agencies in determining whether to grant approvals; • failure in certain markets to obtain reimbursement commensurate with the level of innovation and clinical benefit presented by the product; • changes in clinical preferences or standards of care, including competitor innovations, that diminish the value of the product; • lack of economic feasibility due to manufacturing costs or other factors; and • preclusion from commercialization by the proprietary rights of others.
Mature products that have entered into the last five rounds of VBP had, on average, a price reduction of more than 50%. The Company expects VBP to be a semi-annual process that will have a significant impact on mature products moving forward. The Company may not be able to realize the expected benefits of its investments in emerging markets.
Mature products that have entered into the latest rounds of VBP had, on average, a price reduction of more than 50%. The Company expects that the VBP process will have a significant impact on mature products moving forward. 34 Table of Contents The Company may not be able to realize the expected benefits of its investments in emerging markets.
In addition, the Company is subject to expanding mandatory and voluntary reporting, diligence and disclosure requirements, including the EU’s Corporate 32 Table of Content s Sustainability Reporting Directive (CSRD) and potentially the SEC’s climate-related reporting requirements (which are currently stayed), the legislation in California requiring reporting of GHG emissions and climate risk, and similar regulatory requirements in other jurisdictions outside the U.S.
In addition, the Company is subject to evolving mandatory and voluntary reporting, diligence and disclosure requirements, including the EU’s Corporate Sustainability Reporting Directive (CSRD) and potentially the SEC’s climate-related reporting requirements (which are currently stayed), the legislation in California requiring reporting of GHG emissions (which is currently subject to legal challenge) and climate risk (which is currently stayed pending appeal), and similar regulatory requirements in other jurisdictions outside the U.S.
Foreign Corrupt Practices Act (FCPA) or other anti-bribery and corruption laws; (iii) new laws, regulations and judicial or other governmental decisions affecting pricing, drug reimbursement, and access or marketing within or across jurisdictions; (iv) changes in intellectual property laws; (v) changes in accounting standards; (vi) new and increasing data privacy regulations and enforcement, particularly in the EU, the U.S., and China; (vii) legislative mandates or preferences for local manufacturing of pharmaceutical or vaccine products; (viii) emerging and new global regulatory requirements for reporting payments and other value transfers to health care professionals; (ix) sustainability regulations, such as the EU’s CSRD; and (x) the potential impact of importation restrictions, embargoes, trade sanctions and legislative and/or other regulatory changes. 37 Table of Content s The Company is subject to evolving and complex tax laws, which may result in additional liabilities that may affect results of operations and financial condition.
Foreign Corrupt Practices Act (FCPA) or other anti-bribery and corruption laws; (iii) new laws, regulations and judicial or other governmental decisions affecting pricing, drug reimbursement, and access or marketing within or across jurisdictions; (iv) changes in intellectual property laws; (v) changes in accounting standards; (vi) new and increasing data privacy regulations and enforcement, particularly in the EU, the U.S., and China; (vii) legislative mandates or preferences for local manufacturing of pharmaceutical or vaccine products; (viii) emerging and new global regulatory requirements for reporting payments and other value transfers to health care professionals; (ix) sustainability regulations, such as the EU’s CSRD; and (x) the potential impact of importation restrictions, embargoes, trade sanctions and legislative and/or other regulatory changes.
Other events could include loss of patent protection, increased costs associated with manufacturing, generic or over-the-counter availability of the Company’s product or a competitive product, the discovery of previously unknown side effects, results of post-approval trials, increased competition from the introduction of new, more effective treatments and discontinuation or removal from the market of the product for any reason.
Other events could include loss of patent protection, selection for IRA price setting, lower than expected utilization of Keytruda Qlex , increased costs associated with manufacturing, generic, biosimilar or over-the-counter availability of the Company’s product or a competitive product, the discovery of previously unknown side effects, results of post-approval trials, increased competition from the introduction of new, more effective treatments and discontinuation or removal from the market of the product for any reason.
The Company’s results could materially differ from those anticipated in these forward-looking statements as a result of certain factors, including the risks it faces described below and elsewhere.
The Company’s results could materially differ from those anticipated in these forward-looking statements as a result of certain factors, including the risks it faces described below and elsewhere. See “Cautionary Factors that May Affect Future Results” below.
While the mechanism for drugs being added to the NRDL evolves, inclusion may require a price negotiation which could impact the outlook in the market for selected brands. A 33 Table of Content s new NRDL was recently completed in which new entries averaged 63% price reductions.
While the mechanism for drugs being added to the NRDL evolves, inclusion may require a price negotiation which could impact the outlook in the market for selected brands. A new NRDL was recently completed in which new entries averaged approximately 60% price reductions.
Other risks specific to animal health include epidemics and pandemics affecting livestock, government procurement and pricing practices, weather and global agribusiness economic events. In addition, in 2024, sales of Bravecto were $1.1 billion, which represented 19% of the Company’s Animal Health segment sales.
Other risks specific to animal health include epidemics and pandemics affecting livestock, government procurement and pricing practices, weather and global agribusiness economic events. In addition, in 2025, sales of the Bravecto family of products were 35 Table of Contents $1.1 billion, which represented 18% of the Company’s Animal Health segment sales.
“Competition and the Health Care Environment,” global efforts toward health care cost containment continue to exert pressure on product pricing and market access worldwide.
As discussed above in Item 1. “Competition and the Health Care Environment,” global efforts toward health care cost containment continue to exert pressure on product pricing and market access worldwide.
The Company continues to leverage new and innovative technologies across the enterprise to replace outmoded technology and improve the efficacy and efficiency of its business processes, including data acquisition, the use of which can create new risks.
The Company continues to leverage new and innovative technologies across the enterprise to replace outmoded technology and is beginning a multi-year system upgrade of its SAP system and is working to improve the efficacy and efficiency of its business processes, including data acquisition, the use of which can create new risks.
In January 2025, HHS announced that Janumet and Janumet XR have been selected for government price setting, which will become effective on January 1, 2027.
In 2025, HHS selected Janumet and Janumet XR for government price setting, the set price for which will become effective on January 1, 2027. In addition, in January 2026, HHS announced that Lenvima has been selected for government price setting, the set price for which will become effective on January 1, 2028.
Any of these events could result in substantial costs. 35 Table of Content s Risks Relating to Government Regulation and Legal Proceedings The health care industry in the U.S. has been, and will continue to be, subject to increasing regulation and political action. As discussed above in Item 1.
Risks Relating to Government Regulation and Legal Proceedings The health care industry in the U.S. has been, and will continue to be, subject to increasing regulation and political action. As discussed above in Item 1.
The Internal Revenue Service (IRS) is currently conducting examinations of the Company’s tax returns for the years 2017 and 2018, including the one-time transition tax enacted under the Tax Cuts and Jobs Act of 2017 (TCJA). If the IRS disagrees with the Company’s transition tax position, it may result in a significant tax liability.
The Internal Revenue Service (IRS) is currently conducting examinations of the Company’s tax returns for the years 2017 and 2018, including the one-time transition tax enacted under the Tax Cuts and Jobs Act of 2017 (TCJA).
These evolving regulatory requirements are likely to result in increased costs and complexities of compliance in order to collect, measure and report on the relevant information. Failure to attract and retain highly qualified personnel could affect the Company’s ability to successfully develop and commercialize products.
These evolving regulatory requirements may result in increased costs and complexities of compliance in order to collect, measure and report on the relevant information, and could expose the Company to the risk of government enforcement actions and private litigation. 33 Table of Contents Failure to attract and retain highly qualified personnel could affect the Company’s ability to successfully develop and commercialize products.
The Company faces intense competition from both lower cost generic and biosimilar products and competitors’ products. In general, the Company faces increasing competition from lower-cost generic and biosimilar products. The patent rights that protect its products are of varying strengths and durations. In addition, in some countries, patent protection is significantly weaker than in the U.S. or in the EU.
The patent rights that protect its products are of varying strengths and durations. In addition, in some countries, patent protection is significantly weaker than in the U.S. or in the EU.
Failure of these third parties to meet their contractual, regulatory and other obligations to the Company or the development of factors that materially disrupt the relationships between the Company and these third parties could have a material adverse effect on the Company’s business. 34 Table of Content s Negative events in the animal health industry could have a material adverse effect on future results of operations and financial condition of the Company or its Animal Health business.
Failure of these third parties to meet their contractual, regulatory and other obligations to the Company or the development of factors that materially disrupt the relationships between the Company and these third parties could have a material adverse effect on the Company’s business.
Additionally, if the FDA drug user fee programs were eliminated, that could cause significant delays to facility inspections and approvals of new products.
Additionally, if the FDA drug user fee programs were eliminated, that could cause significant delays to facility inspections and approvals of new products. Changes could also impact the CDC, including how recommendations for immunizations are issued and maintained.
“Competition and the Health Care Environment,” in 2023, HHS selected Januvia for the first year of the IRA’s price setting program, which will result in a government set price becoming effective on January 1, 2026. Government price setting may also impact pricing in the private market, negatively affecting the Company’s performance.
“Competition and the Health Care Environment,” in 2023, HHS selected Januvia for the first year of the IRA’s price setting program, which resulted in a government set price becoming effective on January 1, 2026. In 2025, HHS selected Janumet and Janumet XR for government price setting, which will become effective on January 1, 2027.
In addition, in the U.S., larger customers have received higher rebates on drugs in certain highly competitive categories. The Company must also compete to be placed on formularies of managed care organizations. Exclusion of a product from a formulary can lead to reduced usage in the managed care organization.
The Company must also compete to be placed on formularies of managed care organizations. Exclusion of a product from a formulary can lead to reduced usage in the managed care organization. The Company is also facing pricing pressure from purchasers of certain vaccines in highly competitive categories.
In the U.S., members of the government have made public statements in favor of, and may take steps to implement, various regulatory changes that could negatively impact the pharmaceutical industry, including the Company. Those potential changes include some related to vaccines and vaccine development, as well as personnel and policy changes at the FDA and other government agencies and programs.
In the U.S., members of the government have made public statements in favor of, and may take steps to implement, various regulatory or policy changes that could negatively impact the pharmaceutical industry, including the Company.
See “Cautionary Factors that May Affect Future Results” below. 27 Table of Content s Risks Related to the Company’s Business The Company is dependent on its patent rights, and if its patent rights are invalidated or circumvented, its business could be materially adversely affected.
Risks Related to the Company’s Business The Company is dependent on its patent rights, and if its patent rights are invalidated or circumvented, its business could be materially adversely affected.
Furthermore, the Japanese government can order re-pricing for specific products if it determines that use of such product will exceed certain thresholds defined under applicable re-pricing rules. The Company expects pricing pressures to continue in the future. Unfavorable or uncertain economic conditions, together with cost-reduction measures being taken by certain governments, could negatively affect the Company’s operating results.
Furthermore, the Japanese government can order re-pricing for specific products if it determines that use of such product will exceed certain thresholds defined under applicable re-pricing rules. The Company expects pricing pressures to continue in the future.
The Company’s ability to generate profits and operating cash flows depends largely upon the continued profitability of the Company’s key products, such as Keytruda , Gardasil/Gardasil 9, Lynparza, Bravecto , and Bridion . In 2024, the Company’s oncology portfolio, led by Keytruda , represented substantially all of the Company’s revenue growth.
The Company’s ability to generate profits and operating cash flows depends largely upon the continued profitability of the Company’s key products, such as Keytruda , Gardasil/Gardasil 9, Lynparza, Winrevair, and Bravecto . In particular, in the aggregate, in 2025, sales of Keytruda represented 49% of the Company’s total sales.
Future sales of key animal health products could be adversely affected by a number of risk factors including certain risks that are specific to the animal health business.
Negative events in the animal health industry could have a material adverse effect on future results of operations and financial condition of the Company or its Animal Health business. Future sales of key animal health products could be adversely affected by a number of risk factors including certain risks that are specific to the animal health business.
The FDA and foreign regulatory authorities, including in the EU, Japan and China, have substantial discretion to require additional testing, to delay or withhold registration and marketing approval and to otherwise preclude distribution and sale of a product. 36 Table of Content s Even if the Company is successful in developing new products, it will not be able to market any of those products unless and until it has obtained all required regulatory approvals (which in limited circumstances may include authorizations for emergency use) in each jurisdiction where it proposes to market the new products.
Even if the Company is successful in developing new products, it will not be able to market any of those products unless and until it has obtained all required regulatory approvals (which in limited circumstances may include authorizations for emergency use) in each jurisdiction where it proposes to market the new products.
The Company’s business may be adversely affected by local and global economic conditions, including with respect to inflation, interest rates, and costs of raw materials and packaging.
Unfavorable or uncertain economic conditions, together with cost-reduction measures being taken by the U.S. and other countries, could negatively affect the Company’s operating results. The Company’s business may be adversely affected by local and global economic conditions, including with respect to inflation, interest rates, and costs of raw materials and packaging.
Once obtained, the Company must maintain approval as long as it plans to market its new products in each jurisdiction where approval is required. The Company’s failure to obtain approval, significant delays in the approval process, or its failure to maintain approval in any jurisdiction will prevent it from selling the products in that jurisdiction and realizing sales.
Once obtained, the Company must maintain approval as long as it plans to market its new products in each jurisdiction where approval is required.
If one or more important products lose patent protection in profitable markets, sales of those products are likely to decline significantly as a result of generic versions of those products becoming available. The Company’s results of operations may be adversely affected by the lost sales unless and until the Company has launched commercially successful products that replace the lost sales.
If one or more important products lose patent protection in profitable markets, sales of those products are likely to decline significantly as a result of generic or biosimilar versions of those products becoming available.
The IRS is also currently conducting examinations of the Company’s tax returns for the years 2021 and 2022. In addition, various state and foreign tax examinations are in progress.
If the IRS’ challenge to the Company’s transition tax position is ultimately successful, the impact could be material to the Company’s cash flows, results of operations and financial condition. The IRS is also currently conducting examinations of the Company’s tax returns for the years 2021 and 2022. In addition, various state and foreign tax examinations are in progress.
The Company is also facing pricing pressure from purchasers of certain vaccines in highly competitive categories. Outside the U.S., numerous major markets, including the EU, Japan and China have pervasive government involvement in funding health care and, in that regard, fix the pricing and reimbursement of pharmaceutical and vaccine products.
Also, the Company expects that U.S. states will continue their focus on pharmaceutical pricing and may shift to more aggressive price control tools. Outside the U.S., numerous major markets, including the EU, Japan and China have pervasive government involvement in funding health care and, in that regard, fix the pricing and reimbursement of pharmaceutical and vaccine products.
The Company is subject to evolving and complex tax laws in the jurisdictions in which it operates. Significant judgment is required for determining the Company’s tax liabilities, and the Company’s tax returns are routinely examined by various tax authorities.
Significant judgment is required for determining the Company’s tax liabilities, and the Company’s tax returns are 38 Table of Contents routinely examined by various tax authorities.
Flaws, biases, or malfunctions in these systems could lead to operational disruptions, data loss, or erroneous decision-making, impacting the Company’s business operations, financial condition, and reputation. Ethical and legal challenges may arise, including biases or discrimination in AI outcomes, non-compliance with data protection regulations and laws specifically governing the use of AI systems and tools, and lack of transparency.
Flaws, biases, or malfunctions in these systems could lead to operational disruptions, data loss, or erroneous decision-making, impacting the Company’s business operations, financial condition, and reputation.
On January 17, 2025, HHS announced that Janumet and Janumet XR have been selected for government price setting, which will become effective on January 1, 2027.
In addition, in January 2026, HHS announced that Lenvima has been selected for government price setting, the set price for which will become effective on January 1, 2028.
There may, however, be attempts by one or more companies to challenge the patent or launch a biosimilar product despite the patent in some European jurisdictions following the expiration of data exclusivity in Europe in July 2026. 28 Table of Content s Key products generate a significant amount of the Company’s profits and cash flows, and any events that adversely affect the markets for its leading products could have a material adverse effect on the Company’s results of operations and financial condition.
Key products generate a significant amount of the Company’s profits and cash flows, and any events that adversely affect the markets for its leading products could have a material adverse effect on the Company’s results of operations, cash flows, financial condition, and prospects.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+1 added−1 removed11 unchanged
Biggest changeOversight of the information security program has been integrated into the Company’s overall enterprise risk management program. The CISO provides periodic reports to the Audit Committee (Audit Committee) of the Board of Directors (Board), the full Board, as well as to the Company’s Chief Executive Officer and other members of senior management, as appropriate.
Biggest changeOversight of the information security program remains fully integrated into the Company’s overall enterprise risk management framework. The CISO provides periodic reports to the Audit Committee (Audit Committee) of the Board of Directors (Board), the full Board, as well as to the Company’s Chief Executive Officer and other members of senior management, as appropriate.
Removed
The CISO has worked in the cybersecurity and national security fields for more than 30 years. He has a Master of Science in Telecommunications and Computers. He has served as a board member of the Health Information Sharing and Analysis Center for 10 years.
Added
The Company’s interim CISO has over 22 years of experience in cybersecurity and national security, including distinguished service in the U.S. Army and the National Security Agency. He holds a Master’s degree in Cyber Intelligence Studies and a Bachelor’s degree in Mathematical Physics, and maintains the Certified Information Systems Security Professional (CISSP) credential.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed3 unchanged
Biggest changeThe Company also has production facilities for human health products at six locations in the U.S. and Puerto Rico. 41 Table of Content s Outside the U.S., through subsidiaries, the Company owns or has an interest in manufacturing plants or other properties in Western Europe, Africa and Asia.
Biggest changeOutside the U.S., through subsidiaries, the Company owns or has an interest in manufacturing plants or other properties in Western Europe, Africa and Asia. The Company and its subsidiaries own their principal facilities and manufacturing plants under titles that they consider to be satisfactory.
The Company and its subsidiaries own their principal facilities and manufacturing plants under titles that they consider to be satisfactory. The Company believes that its properties are in good operating condition and that its machinery and equipment have been well maintained.
The Company believes that its properties are in good operating condition and that its machinery and equipment have been well maintained.
Principal research facilities outside the U.S. are located in the United Kingdom, Switzerland and China. Merck’s manufacturing operations are currently headquartered in Rahway, New Jersey.
Principal research facilities outside the U.S. are located in the United Kingdom, 42 Table of Contents Switzerland and China. The Company’s manufacturing operations are currently headquartered in Rahway, New Jersey. The Company also has production facilities for human health products at five locations in the U.S. and Puerto Rico.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

5 edited+5 added−2 removed0 unchanged
Biggest changeDeLuca, Jr. 62 Executive Vice President and President, Merck Animal Health (since September 2011) Cristal Downing 56 Executive Vice President and Chief Communications & Public Affairs Officer (since August 2021); Prior to that, Vice President Medical Devices, Global Communications and Public Affairs Johnson & Johnson (December 2020-August 2021); Vice President Financial Communication, Johnson & Johnson (January 2018-December 2020) Chirfi Guindo 59 Senior Vice President, Chief Marketing Officer, Human Health (since July 2022); Prior to that, Executive Vice President, Head of Global Product Strategy and Commercialization, Biogen Inc.
Biggest changeDeLuca, Jr. 63 Executive Vice President and President, Merck Animal Health (since September 2011) Chirfi Guindo 60 Senior Vice President, Chief Marketing Officer, Human Health (since July 2022); Prior to that, Executive Vice President, Head of Global Product Strategy and Commercialization, Biogen Inc. (July 2018-July 2022) Betty D.
Name Age Offices and Business Experience Robert M. Davis 58 Chairman, Chief Executive Officer and President (since December 2022); Chief Executive Officer and President (July 2021-December 2022); Executive Vice President, Global Services, and Chief Financial Officer (April 2016-July 2021) Sanat Chattopadhyay 65 Executive Vice President and President, Merck Manufacturing Division (since March 2016) Richard R.
Name Age Offices and Business Experience Robert M. Davis 59 Chairman, Chief Executive Officer and President (since December 2022); Chief Executive Officer and President (July 2021-December 2022); Executive Vice President, Global Services, and Chief Financial Officer (April 2016-July 2021) Sanat Chattopadhyay 66 Executive Vice President and President, Merck Manufacturing Division (since March 2016) Richard R.
Item 4. Mine Safety Disclosures. Not Applicable. 42 Table of Content s Executive Officers of the Registrant (ages as of February 1, 2025) All officers listed below serve at the pleasure of the Board of Directors. None of these officers was elected pursuant to any arrangement or understanding between the officer and any other person(s).
Item 4. Mine Safety Disclosures. Not Applicable. 43 Table of Contents Executive Officers of the Registrant (ages as of February 1, 2026) All officers listed below serve at the pleasure of the Board of Directors. None of these officers was elected pursuant to any arrangement or understanding between the officer and any other person(s).
(July 2016-December 2020) Joseph Romanelli 51 Senior Vice President and President MSD International Human Health (since July 2022); Prior to that, Chief Executive Officer JiXing Pharmaceuticals (July 2021-July 2022); President MSD China (December 2016-July 2021) Dalton Smart 58 Senior Vice President Finance – Global Controller (since December 2023); Vice President, Assistant Controller (September 2023-December 2023); Vice President, Internal Audit (March 2015-September 2023) David M.
Human Health (since January 2022); Senior Vice President and Head of Global Oncology Commercial (January 2021-December 2021) Joseph Romanelli 52 Senior Vice President and President MSD International Human Health (since July 2022); Prior to that, Chief Executive Officer JiXing Pharmaceuticals (July 2021-July 2022); President MSD China (December 2016-July 2021) Dalton Smart 59 Senior Vice President Finance – Global Controller (since December 2023); Vice President, Assistant Controller (September 2023-December 2023); Vice President, Internal Audit (March 2015-September 2023) David M.
Larson 49 Executive Vice President and Chief Human Resources Officer (since April 2024); Prior to that, Chief People Officer, GE HealthCare (February 2022-April 2024); Executive Vice President and Chief Human Resources Officer, Becton Dickinson (June 2018-February 2022) Dean Li 62 Executive Vice President, President, Merck Research Laboratories (since January 2021); Senior Vice President, Discovery Sciences and Translational Medicine, Merck Research Laboratories (November 2017-January 2021) Caroline Litchfield 56 Executive Vice President and Chief Financial Officer (since April 2021); Senior Vice President, Corporate Treasurer (January 2018-March 2021) Johannes J.
Larson 50 Executive Vice President and Chief Human Resources Officer (since April 2024); Prior to that, Chief People Officer, GE HealthCare (February 2022-April 2024); Executive Vice President and Chief Human Resources Officer, Becton Dickinson (June 2018-February 2022) Dean Li 63 Executive Vice President, President, Merck Research Laboratories (since January 2021) Caroline Litchfield 57 Executive Vice President and Chief Financial Officer (since April 2021) Johannes J.
Removed
Oosthuizen 57 Senior Vice President and President Merck U.S. Human Health (since January 2022); Senior Vice President and Head of Global Oncology Commercial (January 2021-December 2021); Senior Vice President and President of MSD K.K.
Added
Oosthuizen 58 Senior Vice President and President Merck U.S.
Removed
Williams 56 Executive Vice President, Chief Information and Digital Officer (since August 2020); Acting Chief Information and Digital Officer (December 2019-August 2020) Jennifer Zachary 47 Executive Vice President and General Counsel (since April 2018) 43 Table of Content s PART II
Added
Williams 57 Executive Vice President, Chief Information and Digital Officer (since August 2020) Jennifer Zachary 48 Executive Vice President and General Counsel (since April 2018) On February 2, 2026, the Company announced that Sanat Chattopadhyay, Executive Vice President and President, Merck Manufacturing Division, will retire from the Company, effective July 1, 2026. The Company announced that Mr. David R.
Added
Maraldo will assume the role as Executive Vice President and President, Merck Manufacturing Division, effective May 1, 2026, at which time Mr. Maraldo will become, and Mr. Chattopadhyay will cease to be, an Executive Officer of the Company. Mr. Chattopadhyay will remain in a strategic advisory role at the Company until his retirement. David R.
Added
Maraldo 49 Senior Vice President, Human Health Operations (since June 2025), Senior Vice President, Global Biologic Operations (February 2022 – June 2025), Vice President, Large Molecule Commercialization (June 2020 – February 2022) On February 12, 2026, the Company announced that Joseph Romanelli has decided to retire from the Company in the second quarter of 2026.
Added
On February 23, 2026, the Company announced that Brian Foard will join the Company as Executive Vice President, and President Specialty, Pharma & Infectious Diseases, effective March 2, 2026. Mr. Foard most recently served as Executive Vice President and Head of Specialty Care at Sanofi. 44 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−1 removed2 unchanged
Biggest changeIn January 2025, the Board of Directors approved a plan to purchase up to an additional $10 billion in Merck shares for its treasury. 44 Table of Content s Performance Graph The following graph assumes a $100 investment on December 31, 2019, and reinvestment of all dividends, in each of the Company’s Common Stock, the S&P 500 Index, and a composite peer group of major U.S. and European-based pharmaceutical companies, which are: AbbVie Inc., Amgen Inc., AstraZeneca plc, Bristol-Myers Squibb Company, Johnson & Johnson, Eli Lilly and Company, Gilead Sciences Inc., GlaxoSmithKline plc, Novartis AG, Pfizer Inc., Roche Holding AG, and Sanofi SA.
Biggest changeIssuer purchases of equity securities for the three months ended December 31, 2025 were as follows: Issuer Purchases of Equity Securities Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ($ in millions) Period Total Number of Shares Purchased (1) Average Price Paid Per Share Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) October 1 — October 31 5,409,085 $86.70 5,409,085 $8,103 November 1 — November 30 4,098,025 $91.68 4,098,025 $7,728 December 1 — December 31 4,009,200 $101.51 4,009,200 $7,321 Total 13,516,310 $92.60 13,516,310 (1) All shares purchased during the period were made as part of a plan approved by the Board of Directors in January 2025 to purchase up to $10 billion in Merck shares for its treasury. 45 Table of Contents Performance Graph The following graph assumes a $100 investment on December 31, 2020, and reinvestment of all dividends, in each of the Company’s Common Stock, the S&P 500 Index, and a composite peer group of major U.S. and European-based pharmaceutical companies, which are: AbbVie Inc., Amgen Inc., AstraZeneca plc, Bristol-Myers Squibb Company, Johnson & Johnson, Eli Lilly and Company, Gilead Sciences Inc., GlaxoSmithKline plc, Novartis AG, Pfizer Inc., Roche Holding AG, and Sanofi SA.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The principal market for trading of the Company’s Common Stock is the New York Stock Exchange (NYSE) under the symbol MRK. As of January 31, 2025, there were approximately 85,700 shareholders of record of the Company’s Common Stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The principal market for trading of the Company’s Common Stock is the New York Stock Exchange (NYSE) under the symbol MRK. As of January 31, 2026, there were approximately 80,500 shareholders of record of the Company’s Common Stock.
Comparison of Five-Year Cumulative Total Return Merck & Co., Inc., Composite Peer Group and S&P 500 Index End of Period Value 2024/2019 CAGR* MERCK $134 6% PEER GROUP** 154 9% S&P 500 197 15% 2019 2020 2021 2022 2023 2024 MERCK $ 100.0 $ 92.8 $ 94.5 $ 141.1 $ 142.5 $ 133.6 PEER GROUP 100.0 106.5 130.4 138.1 142.0 153.7 S&P 500 100.0 118.4 152.3 124.7 157.5 196.8 * Compound Annual Growth Rate ** Peer group average was calculated on a market cap weighted basis as of December 31, 2019.
Comparison of Five-Year Cumulative Total Return Merck & Co., Inc., Composite Peer Group and S&P 500 Index End of Period Value 2025/2020 CAGR* MERCK $158 10% PEER GROUP** 198 15% S&P 500 196 15% 2020 2021 2022 2023 2024 2025 MERCK $ 100.0 $ 101.8 $ 152.1 $ 153.6 $ 144.0 $ 158.1 PEER GROUP 100.0 122.5 130.1 134.1 145.5 198.3 S&P 500 100.0 128.7 105.4 133.0 166.3 196.0 * Compound Annual Growth Rate ** Peer group average was calculated on a market cap weighted basis as of December 31, 2020.
Removed
Issuer purchases of equity securities for the three months ended December 31, 2024 were as follows: Issuer Purchases of Equity Securities Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ($ in millions) Period Total Number of Shares Purchased (1) Average Price Paid Per Share Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) October 1 — October 31 2,428,680 $108.45 2,428,680 $2,620 November 1 — November 30 993,250 $99.29 993,250 $2,522 December 1 — December 31 1,215,000 $99.51 1,215,000 $2,401 Total 4,636,930 $104.15 4,636,930 (1) All shares purchased during the period were made as part of a plan approved by the Board of Directors in October 2018 to purchase up to $10 billion in Merck shares for its treasury.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

202 edited+106 added−87 removed123 unchanged
Biggest changeAdditionally, the Company currently has candidates in Phase 3 clinical development in several other therapeutic areas: • MK-3000, an investigational, potentially first-in-class tetravalent, tri-specific antibody that acts as an agonist of the Wingless-related integration site signaling pathway, for the treatment of diabetic macular edema and neovascular age-related macular degeneration; • MK-8591A, a once-daily oral combination of doravirine and islatravir, an investigational nucleoside reverse transcriptase translocation inhibitor, for the treatment of HIV-1 infection (which is on partial clinical hold for higher doses of islatravir than those used in current clinical trials); • MK-8591D, islatravir in combination with lenacapavir for the treatment of HIV-1 infection (which is on partial clinical hold for higher doses of islatravir than those used in current clinical trials), being developed in collaboration with Gilead Sciences Inc.; • MK-0616, enlicitide decanoate, an investigational, oral proprotein convertase subtilisin/kexin type 9 (PCSK9) inhibitor for hypercholesterolemia, including in studies evaluating low-density lipoprotein cholesterol reduction and a cardiovascular outcomes study; • MK-7240, tulisokibart, a humanized monoclonal antibody directed to tumor necrosis factor-like ligand 1A, a target associated with both intestinal inflammation and fibrosis, for Crohn’s disease and ulcerative colitis; and • MK-4482, Lagevrio , which is reflected in Phase 3 development in the U.S. as it remains investigational following Emergency Use Authorization (EUA) in 2021.
Biggest changeAdditionally, the Company currently has candidates in Phase 3 clinical development in several other therapeutic areas. • MK-0616, enlicitide decanoate, is an investigational oral proprotein convertase subtilisin/kexin type 9 (PCSK9) inhibitor being evaluated for the treatment of hypercholesterolemia, including in studies evaluating low-density lipoprotein cholesterol reduction and a cardiovascular outcomes study. • V181 is an investigational quadrivalent vaccine for the prevention of dengue disease caused by any of the four dengue virus serotypes (DENV-1, DENV-2, DENV-3, and DENV-4), regardless of prior dengue exposure. • MK-3000 is an investigational, potentially first-in-class tetravalent, tri-specific antibody that acts as an agonist of the Wingless-related integration site signaling pathway, which is in clinical development for the treatment of diabetic macular edema. • MK-8591D is an investigational once-weekly, oral combination of Merck’s islatravir, a nucleoside analog leveraging translocation inhibition, and Gilead’s lenacapavir being evaluated for the treatment of HIV-1 infection in virologically suppressed adults (which remains under a partial clinical hold for any studies that would use islatravir doses higher than the doses considered for the revised clinical programs). • MK-8527 is an investigational once-monthly, oral nucleoside analog leveraging translocation inhibition, for HIV-1 pre-exposure prophylaxis (PrEP). • MK-1406 (formerly CD388) is an investigational small molecule neuraminidase inhibitor stably conjugated to a proprietary Fc fragment of a human antibody designed to prevent seasonal and pandemic influenza.
The higher use of cash in financing activities was primarily due to lower proceeds from the issuance debt (see below) and higher dividends paid to shareholders, partially offset by lower payments on long-term debt (see below), higher proceeds from the exercise of stock options and lower purchases of treasury stock.
The lower use of cash in financing activities was primarily due to higher proceeds from the issuance of debt (see below), partially offset by higher purchases of treasury stock, higher payments on long-term debt (see below), higher dividends paid to shareholders, and lower proceeds from the exercise of stock options.
Additionally, estimates are used in determining such items as provisions for sales discounts, rebates and returns, depreciable and amortizable lives, recoverability of inventories, including those produced in preparation for product launches, amounts recorded for contingencies, environmental liabilities, accruals for contingent sales-based milestone payments and other reserves, pension and other postretirement benefit plan assumptions, share-based compensation assumptions, restructuring costs, impairments of long-lived assets (including intangible assets and goodwill) and investments, and taxes on income.
Additionally, estimates are used in determining such items as provisions for sales discounts, rebates and returns, depreciable and amortizable lives, recoverability of inventories (including those produced in preparation for product launches), amounts recorded for contingencies, environmental liabilities, contingent sales-based milestone payments and other reserves, pension and other postretirement benefit plan assumptions, share-based compensation assumptions, restructuring costs, impairments of long-lived assets (including intangible assets and goodwill) and investments, and taxes on income.
Under the terms of the more significant of these agreements, Merck pays a 7% royalty on sales of Gardasil/Gardasil 9 in the U.S. to one third party (this royalty expires in December 2028). Merck paid an additional 7% royalty on worldwide sales of Gardasil/Gardasil 9 to another third party; this royalty expired in December 2023.
Under the terms of the more significant of these agreements, Merck pays a 7% royalty on net sales of Gardasil/Gardasil 9 in the U.S. to one third party (this royalty expires in December 2028). Merck paid an additional 7% royalty on worldwide net sales of Gardasil/Gardasil 9 to another third party; this royalty expired in December 2023.
Additionally, if the IPR&D programs require additional clinical trial data than previously anticipated, or if the programs fail or are abandoned during development, then the Company will not recover the fair value of the IPR&D recorded as an asset as of the acquisition date.
Additionally, if the IPR&D programs require additional clinical trial data than was previously anticipated, or if the programs fail or are abandoned during development, then the Company will not recover the fair value of the IPR&D recorded as an asset as of the acquisition date.
Keytruda is an anti-PD-1 therapy that has been approved in over 40 indications in the U.S., including 18 tumor types and 2 tumor-agnostic indications, and has similarly been approved in markets worldwide for many of these indications. The Keytruda clinical development program includes studies across a broad range of cancer types.
Keytruda is an anti-PD-1 therapy that has been approved in over 40 indications in the U.S., including 19 tumor types and 2 tumor-agnostic indications, and has similarly been approved in markets worldwide for many of these indications. The Keytruda clinical development program includes studies across a broad range of cancer types.
Contingencies and Environmental Liabilities The Company is involved in various claims and legal proceedings of a nature considered normal to its business, including product liability, intellectual property, commercial litigation and securities litigation, as well as certain additional matters, including governmental and environmental matters (see Note 10 to the consolidated financial statements).
Contingencies and Environmental Liabilities The Company is involved in various claims and legal proceedings of a nature considered normal to its business, including product liability, intellectual property, commercial litigation and securities litigation, as well as certain additional matters, including governmental and environmental matters. See Note 10 to the consolidated financial statements for additional information.
Although it is not possible to predict with certainty the outcome of these matters, or the ultimate costs of remediation, management does not believe that any reasonably possible expenditures that may be incurred in excess of the liabilities accrued should exceed approximately $46 million in the aggregate.
Although it is not possible to predict with certainty the outcome of these matters, or the ultimate costs of remediation, management does not believe that any reasonably possible expenditures that may be incurred in excess of the liabilities accrued should exceed approximately $58 million in the aggregate.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following section of this Form 10-K generally discusses 2024 and 2023 results and year-to-year comparisons between 2024 and 2023. Discussion of 2022 results and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in Part II, Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following section of this Form 10-K generally discusses 2025 and 2024 results and year-to-year comparisons between 2025 and 2024. Discussion of 2023 results and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in Part II, Item 7.
The amount reclassified into earnings as a result of the discontinuation of cash flow hedges because it was no longer deemed probable the forecasted hedged transactions would occur was not material for the years ended December 31, 2024, 2023 or 2022.
The amount reclassified into earnings as a result of the discontinuation of cash flow hedges because it was no longer deemed probable the forecasted hedged transactions would occur was not material for the years ended December 31, 2025, 2024 or 2023.
The Company evaluates IPR&D for impairment at least annually, or more frequently if impairment indicators exist (such as unfavorable clinical trial data, changes in the commercial landscape or delays in the clinical development program and related regulatory filing and approval timelines), by performing a quantitative test that compares the fair value of the IPR&D intangible asset with its carrying value.
The Company evaluates IPR&D for impairment at least annually, or more frequently if impairment indicators exist (such as unfavorable clinical trial data, changes in the commercial landscape or delays in the clinical development program and related regulatory filing and approval timelines), by performing a 74 Table of Contents quantitative test that compares the fair value of the IPR&D intangible asset with its carrying value.
Although not predictive in nature, the Company believes that a 10% threshold reflects reasonably possible near-term changes in Merck’s major foreign currency exposures relative to the U.S. dollar. The Company manages operating activities and net asset positions at each local subsidiary in order to mitigate the effects of foreign exchange on monetary assets and liabilities.
Although not predictive in nature, the Company believes that a 10% threshold reflects reasonably possible near-term changes in Merck’s major foreign currency exposures relative to the U.S. dollar. 68 Table of Contents The Company manages operating activities and net asset positions at each local subsidiary in order to mitigate the effects of foreign exchange on monetary assets and liabilities.
Taxes on Income The effective income tax rate of 14.1% in 2024 reflects a favorable mix of income and expense, as well as a 2.6 percentage point favorable impact due to a $519 million reduction in reserves for unrecognized income tax benefits resulting from the expiration in 2024 of the statute of limitations for assessments related to the 2019 and 2020 federal tax return years.
The effective income tax rate of 14.1% in 2024 reflects a favorable jurisdictional mix of income and expense, as well as a 2.6 percentage point favorable impact due to a $519 million reduction in reserves for unrecognized income tax benefits resulting from the expiration in 2024 of the statute of limitations for assessments related to the 2019 and 2020 federal tax return years.
Restructuring costs also include other exits costs, such as asset impairment, facility shut-down and other related costs, as well as employee-related costs such as curtailment, settlement and termination charges associated with pension and other postretirement benefit plans and share-based compensation costs.
Restructuring costs also include asset impairment, facility shut-down, contractual termination, and other related costs, as well as employee-related costs such as curtailment, settlement and termination charges associated with pension and other postretirement benefit plans, and share-based compensation costs.
The Company does not enter into derivatives for trading or speculative purposes. 65 Table of Content s Because Merck principally sells foreign currency in its revenue hedging program, a uniform weakening of the U.S. dollar would yield the largest overall potential loss in the market value of these hedge instruments.
The Company does not enter into derivatives for trading or speculative purposes. Because Merck principally sells foreign currency in its revenue hedging program, a uniform weakening of the U.S. dollar would yield the largest overall potential loss in the market value of these hedge instruments.
Congress passed the Inflation Reduction Act (IRA), which made significant changes to how drugs are covered and paid for under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits (which has taken effect in 2025), and government price setting for certain Medicare Part D drugs (starting in 2026) and Medicare Part B drugs (starting in 2028).
Congress passed the Inflation Reduction Act (IRA), which made significant changes to how drugs are covered and paid for under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits (which went into effect in 2025), and government price setting for certain Medicare Part D drugs (starting in 2026) and Medicare Part B drugs (starting in 2028).
In 2024, the Company’s $750 million, 2.90% notes and the Company’s €500 million, 0.50% euro-denominated notes matured in accordance with their terms and were repaid. In 2023, the Company’s $1.75 billion, 2.80% notes matured in accordance with their terms and were repaid.
In 2025, the Company’s $2.5 billion, 2.75% notes matured in accordance with their terms and were repaid. In 2024, the Company’s $750 million, 2.90% notes and the Company’s €500 million, 0.50% euro-denominated notes matured in accordance with their terms and were repaid. In 2023, the Company’s $1.75 billion, 2.80% notes matured in accordance with their terms and were repaid.
The Company expects foreseeable liquidity and capital resource requirements to be met through existing cash and cash equivalents and anticipated cash flows from operations, as well as commercial paper borrowings and long-term borrowings if needed. Merck believes that its sources of financing will be adequate to meet its future requirements.
The Company expects foreseeable liquidity and capital resource requirements to be met through existing cash and cash equivalents and anticipated cash flows from operations, as well as commercial paper borrowings and 67 Table of Contents long-term borrowings if needed. Merck believes that its sources of financing will be adequate to meet its future requirements.
A sensitivity analysis to changes in the value of the U.S. dollar on foreign currency denominated derivatives, investments and monetary assets and liabilities indicated that if the U.S. dollar uniformly weakened by 10% against all currency exposures of the Company at December 31, 2024 and 2023, Income Before Taxes would have declined by approximately $239 million and $221 million in 2024 and 2023, respectively.
A sensitivity analysis to changes in the value of the U.S. dollar on foreign currency denominated derivatives, investments, and monetary assets and liabilities indicated that if the U.S. dollar uniformly weakened by 10% against all currency exposures of the Company at December 31, 2025 and 2024, Income Before Taxes would have declined by approximately $131 million and $239 million in 2025 and 2024, respectively.
A chart reflecting the Company’s current research pipeline as of February 21, 2025 and related discussion is set forth in Item 1. “Business — Research and Development” above. Acquisitions, Research Collaborations and Licensing Agreements Merck continues to remain focused on pursuing opportunities that have the potential to drive both near- and long-term growth.
A chart reflecting the Company’s current research pipeline as of February 20, 2026 and related discussion is set forth in Item 1. “Business — Research and Development” above. Acquisitions, Research Collaborations and Licensing Agreements Merck continues to remain focused on pursuing opportunities that have the potential to drive both near- and long-term growth.
The amount of legal defense reserves as of December 31, 2024 and 2023 of approximately $225 million and $210 million, respectively, represents the Company’s best estimate of the minimum amount of defense costs to be incurred in connection with its outstanding litigation; however, events such as additional trials and other events that could arise in the course of its litigation could affect the ultimate amount of legal defense costs to be incurred by the Company.
The amount of legal defense reserves as of December 31, 2025 and 2024 of approximately $245 million and $225 million, respectively, represents the Company’s best estimate of the minimum amount of defense costs to be incurred in connection with its outstanding litigation; however, events such as additional trials and other events that could arise in the course of its litigation could affect the ultimate amount of legal defense costs to be incurred by the Company.
A sensitivity analysis to measure potential changes in the market value of Merck’s investments and debt from a change in interest rates indicated that a one percentage point increase in interest rates at December 31, 2024 and 2023 would have positively affected the net aggregate market value of these instruments by $2.4 billion and $2.5 billion, respectively.
A sensitivity analysis to measure potential changes in the market value of Merck’s investments and debt from a change in interest rates indicated that a one percentage point increase in interest rates at December 31, 2025 and 2024 would have positively affected the net aggregate market value of these instruments by $3.4 billion and $2.4 billion, respectively.
The market value of Merck’s hedges would have declined by an estimated $569 million and $754 million at December 31, 2024 and 2023, respectively, from a uniform 10% weakening of the U.S. dollar. The market value was determined using a foreign exchange option pricing model and holding all factors except exchange rates constant.
The market value of Merck’s hedges would have declined by an estimated $671 million and $569 million at December 31, 2025 and 2024, respectively, from a uniform 10% weakening of the U.S. dollar. The market value was determined using a foreign exchange option pricing model and holding all factors except exchange rates constant.
Beginning in mid-2024, the Company observed a significant decline in shipments from its distributor and commercialization partner in China, Chongqing Zhifei Biological Products Co., Ltd. (Zhifei), to disease and control prevention institutions and correspondingly into the points of vaccination, resulting in above normal inventory levels at Zhifei.
Beginning in mid-2024, the Company observed a significant decline in shipments from its distributor and commercialization partner in China, Chongqing Zhifei Biological Products Co., Ltd. (Zhifei), to disease and control prevention institutions and correspondingly into the points of vaccination compared with prior quarters of 2024, resulting in above normal inventory levels at Zhifei.
While the key U.S. patent for Januvia , Janumet and Janumet XR claiming the sitagliptin compound expired in January 2023, as a result of favorable court rulings and settlement agreements related to a later expiring patent directed to the specific sitagliptin salt form of the products (see Note 10 to the consolidated financial statements), the Company expects that Januvia and Janumet will not lose market exclusivity in the U.S. until May 2026 and Janumet XR will not lose market exclusivity in the U.S. until July 2026, although a non-automatically substitutable form of sitagliptin that differs from the form in the Company’s sitagliptin products has been approved by the FDA.
While the key U.S. patent for Januvia , Janumet and Janumet XR claiming the sitagliptin compound expired in January 2023, as a result of favorable court rulings and settlement agreements related to a later expiring patent directed to the specific sitagliptin salt form of the products, the Company expects that Januvia and Janumet will not lose market exclusivity in the U.S. until May 2026 and Janumet XR will not lose market exclusivity in the U.S. until July 2026, although a non-automatically substitutable form of sitagliptin that differs from the form in the Company’s sitagliptin products has been approved by the FDA.
A one percentage point decrease at December 31, 2024 and 2023 would have negatively affected the net aggregate market value by $2.9 billion and $3.0 billion, respectively. The fair value of Merck’s debt was determined using pricing models reflecting one percentage point shifts in the appropriate yield curves.
A one percentage point decrease at December 31, 2025 and 2024 would have negatively affected the net aggregate market value by $4.0 billion and $2.9 billion, respectively. The fair value of Merck’s debt was determined using pricing models reflecting one percentage point shifts in the appropriate yield curves.
One should understand that it is not possible to predict or identify all such factors. Consequently, the reader should not consider any such list to be a complete statement of all potential risks or uncertainties.
One should understand that it is not possible to 75 Table of Contents predict or identify all such factors. Consequently, the reader should not consider any such list to be a complete statement of all potential risks or uncertainties.
Merck’s payment terms for U.S. pharmaceutical customers are typically 36 days from receipt of invoice and for U.S. animal health customers are typically 30 days from receipt of invoice; however, certain products have longer payment terms, including Keytruda , which has payment terms of 90 days.
Merck’s payment terms for U.S. pharmaceutical products are typically 35 days from receipt of invoice and for U.S. animal health products are typically 30 days from receipt of invoice; however, certain products have longer payment terms, including Keytruda , which has payment terms of 90 days.
The sales increase was primarily due to growth in oncology, cardiovascular and animal health, partially offset by declines in diabetes, virology (driven largely by lower sales of COVID-19 medication Lagevrio ), immunology (as Merck’s marketing rights to these products ended in 2024) and vaccines.
The sales increase was primarily due to growth in oncology, cardiometabolic and respiratory, diabetes, and animal health, largely offset by declines in vaccines, immunology (as Merck’s marketing rights to these products ended in 2024), and virology (driven largely by lower sales of COVID-19 medication Lagevrio ).
These items are adjusted for after evaluating them on an individual basis, considering their quantitative and qualitative aspects. Typically, these items 61 Table of Content s are unusual in nature, significant to the results of a particular period or not indicative of future operating results.
These items are adjusted for after evaluating them on an individual basis, considering their quantitative and qualitative aspects. Typically, these items are unusual in nature, significant to the results of a particular period or not indicative of future operating results.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed on February 26, 2024 . Description of Merck’s Business Merck & Co., Inc.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed on February 25, 2025 . Description of Merck’s Business Merck & Co., Inc.
In January 2025, the Board of Directors declared a quarterly dividend of $0.81 per share on the Company’s outstanding common stock for the second quarter of 2025 payable in April 2025. In 2018, Merck’s Board of Directors authorized purchases of up to $10 billion of Merck’s common stock for its treasury.
In January 2026, the Board of Directors declared a quarterly dividend of $0.85 per share on the Company’s outstanding common stock for the second quarter of 2026 payable in April 2026. In January 2025, Merck’s Board of Directors authorized purchases of up to $10 billion of Merck’s common stock for its treasury.
If such circumstances were to occur, the Company’s future operating results could be adversely affected and the Company may recognize impairment charges, which could be material. In 2023 and 2022, the Company recorded IPR&D impairment charges within Research and development expenses of $779 million and $1.6 billion, respectively (see Note 8 to the consolidated financial statements).
If such circumstances were to occur, the Company’s future operating results could be adversely affected and the Company may recognize impairment charges, which could be material. In 2023, the Company recorded IPR&D impairment charges within Research and development expenses of $779 million (see Note 8 to the consolidated financial statements).
The Company’s material cash requirements arising in the normal course of business primarily include: 64 Table of Content s Debt Obligations and Interest Payments — See Note 9 to the consolidated financial statements for further detail of the Company’s debt obligations and the timing of expected future principal and interest payments.
The Company’s material cash requirements arising in the normal course of business primarily include: Debt Obligations and Interest Payments — See Note 9 to the consolidated financial statements for further detail of the Company’s debt obligations and the timing of expected future principal and interest payments.
Animal Health segment profits are comprised of segment sales, less all cost of sales, as well as SG&A and R&D expenses directly incurred by the segment.
Animal Health segment profits consist of segment sales, less all cost of sales, as well as SG&A and R&D expenses directly incurred by the segment.
These amounts include the amortization of intangible assets and amortization of purchase accounting adjustments to inventories, as well as intangible asset impairment charges, and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Also excluded are integration, transaction, and certain other costs associated with acquisitions and divestitures.
These amounts include the amortization of intangible assets and the recognition of fair value step-up of inventories, as well as intangible asset impairment charges, and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Also excluded are integration, transaction, and certain other costs associated with acquisitions and divestitures.
Depreciation expense was $2.1 billion in 2024, $1.8 billion in 2023 and $1.8 billion in 2022, of which $1.4 billion in 2024, $1.2 billion in 2023 and $1.3 billion in 2022, related to locations in the U.S.
Depreciation expense was $3.0 billion in 2025, $2.1 billion in 2024 and $1.8 billion in 2023, of which $2.2 billion in 2025, $1.4 billion in 2024 and $1.2 billion in 2023, related to locations in the U.S.
The majority of the Company’s contracts related to the Pharmaceutical and Animal Health segments have a single performance obligation - the promise to transfer goods. Shipping is considered immaterial in the context of the overall customer arrangement and damages or loss of goods in transit are rare.
The majority of the Company’s contracts related to the Pharmaceutical and Animal Health segments have a single performance obligation - the promise to transfer goods. Shipping is considered immaterial in the context of the overall customer arrangement and damages or loss of goods in transit are rare. Therefore, shipping is not deemed a separately recognized performance obligation.
Other expenses in Restructuring costs include facility shut-down and other related costs, as well as employee-related costs such as curtailment, settlement and termination 58 Table of Content s charges associated with pension and other postretirement benefit plans and share-based compensation plan costs. For segment reporting, restructuring costs are unallocated expenses.
Other expenses in Restructuring costs include facility shut-down and other related costs, as well as employee-related costs such as curtailment, settlement, and termination charges associated with pension and other postretirement benefit plans, and share-based compensation plan costs. For segment reporting, restructuring costs are unallocated expenses.
Income and Losses from Investments in Equity Securities Non-GAAP income and non-GAAP EPS exclude realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds. Certain Other Items Non-GAAP income and non-GAAP EPS exclude certain other items.
Income and Losses from Investments in Equity Securities Non-GAAP income and non-GAAP EPS exclude realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds. 64 Table of Contents Certain Other Items Non-GAAP income and non-GAAP EPS exclude certain other items.
Lynparza is an oral poly (ADP-ribose) polymerase (PARP) inhibitor being developed and commercialized as part of a collaboration with AstraZeneca (see Note 4 to the consolidated financial statements). Lynparza is approved for the treatment of certain types of advanced or recurrent ovarian, early or metastatic breast, metastatic pancreatic and metastatic castration-resistant prostate cancers.
Lynparza is a PARP inhibitor being developed and commercialized as part of a collaboration with AstraZeneca (see Note 4 to the consolidated financial statements). Lynparza is approved for the treatment of certain types of advanced or recurrent ovarian, early or metastatic breast, metastatic pancreatic and metastatic castration-resistant prostate cancers.
(3) GAAP and non-GAAP EPS were negatively affected in 2024, 2023 and 2022 by $1.28, $6.21, and $0.22, respectively, of charges for certain upfront and pre-approval milestone payments related to collaborations and licensing agreements, as well as charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions.
(3) GAAP and non-GAAP EPS were negatively affected in 2025, 2024 and 2023 by $0.20, $1.28, and $6.21, respectively, of per share charges for certain upfront and pre-approval milestone payments related to collaborations and licensing agreements, as well as charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions.
At December 31, 2024, the balance of in-process research and development (IPR&D) was $430 million, primarily consisting of MK-1026 (nemtabrutinib), $418 million, which is in Phase 3 clinical development.
At December 31, 2025, the balance of in-process research and development (IPR&D) was $427 million, primarily consisting of MK-1026 (nemtabrutinib), $418 million, which is in Phase 3 clinical development.
If the Company is aware of any specific risks or contingencies other than the normal regulatory approval process or if there are any specific issues identified during the research process relating to safety, efficacy, manufacturing, marketing or labeling, the related inventory would generally not be capitalized. Expiry dates of the inventory are affected by the stage of completion.
If the Company is aware of any specific risks or contingencies other than the normal regulatory approval process or if there are any specific issues identified during the research process relating to safety, efficacy, manufacturing, marketing or labeling, the related inventory would generally not be capitalized.
Lenvima is an oral receptor tyrosine kinase inhibitor being developed and commercialized as part of a collaboration with Eisai (see Note 4 to the consolidated financial statements).
Lenvima is an oral receptor TKI being developed and commercialized as part of a collaboration with Eisai (see Note 4 to the consolidated financial statements).
The royalty expenses are included in Cost of sales . Worldwide sales of Pneumovax 23, a vaccine to help prevent pneumococcal disease, declined 36% in 2024 due to lower global demand, particularly in the U.S. as the market has shifted toward newer adult pneumococcal conjugate vaccines.
The royalty expenses are included in Cost of sales . Worldwide sales of Pneumovax 23, a vaccine to help prevent pneumococcal disease, declined 37% in 2025 due to lower global demand, particularly in the U.S. and Europe, as the market has shifted toward newer adult pneumococcal conjugate vaccines.
The Company’s estimates of market participant net cash flows consider historical and projected pricing, margins and expense levels; the performance of competing products where applicable; relevant industry and therapeutic area growth drivers and factors; current and expected trends in technology and product life cycles; the time and investment that will be required to develop products and technologies; the ability to obtain additional marketing and regulatory approvals; the ability to manufacture and commercialize the products; the extent and timing of potential new product introductions by the Company’s competitors; and the life of each asset’s underlying patent and related patent term extension, if any.
The Company’s estimates of market participant net cash flows consider historical and 70 Table of Contents projected pricing, margins and expense levels; the performance of competing products where applicable; relevant industry and therapeutic area growth drivers and factors; current and expected trends in technology and product life cycles; the ability to obtain additional marketing and regulatory approvals; the ability to manufacture and commercialize the products; the extent and timing of potential new product introductions by the Company’s competitors; and the life of each asset’s underlying patent and related patent term extension, if any.
The market value of the Company’s medium- to long-term fixed-rate investments is modestly affected by changes in U.S. interest rates. Changes in medium- to long-term U.S. interest rates have a more significant impact on the market value of the Company’s fixed-rate borrowings, which generally have longer maturities.
Changes in medium- to long-term U.S. interest rates have a more significant impact on the market value of the Company’s fixed-rate borrowings, which generally have longer maturities.
Payment terms for vaccine sales in the U.S. typically range from 30 days to 60 days. Outside of the U.S., payment terms are typically 30 days to 90 days, although certain markets have longer payment terms. Through its distribution programs with U.S. wholesalers, the Company encourages wholesalers to align purchases with underlying demand and maintain inventories below specified levels.
Payment terms for vaccine products in the U.S. typically range from 30 days to 60 days. Outside of the U.S., payment terms are typically 30 days to 90 days, although certain markets have longer payment terms. Through its distribution programs with U.S. wholesalers, the Company encourages wholesalers to align purchases with underlying demand and maintain inventories within certain ranges.
Alliance revenue related to Lynparza grew 9% in 2024 largely due to higher demand in most international markets. In January 2025, China’s NMPA approved Lynparza as adjuvant treatment for adult patients with germline BRCA -mutated, HER2-negative high-risk early breast cancer, based on the OlympiA trial.
Alliance revenue related to Lynparza grew 11% in 2025 largely due to higher demand globally. In January 2025, China’s NMPA approved Lynparza as adjuvant treatment for adult patients with germline BRCA -mutated, HER2-negative high-risk early breast cancer, based on the OlympiA trial.
Also excluded from the determination of segment profits are costs related to restructuring activities and acquisition- and divestiture-related costs, including the amortization of intangible assets and amortization of purchase accounting adjustments, intangible asset impairment charges, and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration.
Also excluded from the determination of segment profits are costs related to restructuring activities and acquisition- and divestiture-related costs, including the amortization of intangible assets and the recognition of fair value step-up of inventories, intangible asset impairment charges, and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration.
The Company used a portion of the $5.9 billion net proceeds from this offering to fund a portion of the cash consideration paid for the acquisition of Prometheus, including related fees and expenses, and used the remaining net proceeds for general corporate purposes including to repay commercial paper borrowings and other indebtedness with upcoming maturities.
The Company used a portion of the net proceeds from the offering to fund a portion of the $11.0 billion cash consideration paid for the acquisition of Prometheus Biosciences, Inc., including related fees and expenses, and used the remaining net proceeds for general corporate purposes including to repay commercial paper borrowings and other indebtedness with upcoming maturities.
The product returns 69 Table of Content s provision for U.S. pharmaceutical sales as a percentage of U.S. net pharmaceutical sales was 0.8% in 2024, 1.0% in 2023 and 1.1% in 2022. Outside of the U.S., returns are only allowed in certain countries on a limited basis.
The product returns provision for U.S. pharmaceutical sales as a percentage of U.S. net pharmaceutical sales was 0.6% in 2025, 0.8% in 2024, and 1.0% in 2023. Outside of the U.S., returns are only allowed in certain countries on a limited basis.
Accordingly, the Company may be required to value assets at fair value measures that do not reflect the Company’s intended use of those assets. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill.
Accordingly, the Company may be required to value assets at fair value measures that do not reflect the Company’s intended use of those assets. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred.
Research and development expenses in 2024 reflect increased development spending particularly in the therapeutic areas of oncology, immunology and cardiometabolic. In addition, Merck remains committed to its dividend and will continue to pursue the most compelling external science and technologies through value-enhancing business development transactions.
Research and development expenses in 2025 reflect increased development spending particularly in the therapeutic areas of ophthalmology, oncology and immunology. In addition, Merck remains committed to its dividend and will continue to 50 Table of Contents pursue the most compelling external science and technologies through value-enhancing business development transactions.
When events or 72 Table of Content s circumstances warrant a review, the Company will assess recoverability from future operations using pretax undiscounted cash flows derived from the lowest appropriate asset groupings.
When events or circumstances warrant a review, the Company will assess recoverability from future operations using pretax undiscounted cash flows derived from the lowest appropriate asset groupings.
If the more likely than not threshold is not met in the period for which a tax position is taken, the Company may subsequently recognize the benefit of that tax position if the tax matter is effectively settled, the statute of limitations expires, or if the more likely than not threshold is met in a subsequent period (see Note 15 to the consolidated financial statements).
If the more likely than not threshold is not met in the period for which a tax position is taken, the Company may subsequently recognize the benefit of that tax position if the tax matter is effectively settled, the statute of limitations expires, or if the more likely than not threshold is met in a subsequent period.
Common Shareholders: GAAP $ 6.74 * * $ 0.14 (98) % (95) % $ 5.71 Non-GAAP (1) $ 7.65 * * $ 1.51 (80) % (75) % $ 7.48 * > 100% (1) Non-GAAP net income and non-GAAP earnings per share (EPS) exclude acquisition- and divestiture-related costs, restructuring costs, income and losses from investments in equity securities, and certain other items from Merck’s results prepared in accordance with generally accepted accounting principles in the U.S.
Common Shareholders: GAAP $ 7.28 8 % 10 % $ 6.74 * * $ 0.14 Non-GAAP (1) $ 8.98 17 % 19 % $ 7.65 * * $ 1.51 * > 100% (1) Non-GAAP net income and non-GAAP earnings per share (EPS) exclude acquisition- and divestiture-related costs, restructuring costs, income and losses from investments in equity securities, and certain other items from Merck’s results prepared in accordance with generally accepted accounting principles in the U.S.
Separation costs associated with manufacturing-related headcount reductions have been incurred and are reflected in Restructuring costs as discussed below. Gross margin was 76.3% in 2024 compared with 73.2% in 2023.
Separation costs associated with manufacturing-related headcount reductions have been incurred and are reflected in Restructuring costs as discussed below. Gross margin was 74.8% in 2025 compared with 76.3% in 2024.
Total depreciation expense in 2024, 2023 and 2022 included accelerated depreciation of $254 million, $140 million and $120 million, respectively, associated with restructuring activities (see Note 5 to the consolidated financial statements).
Total depreciation expense in 2025, 2024 and 2023 included accelerated depreciation of $1.2 billion, $254 million and $140 million, respectively, associated with restructuring activities (see Note 5 to the consolidated financial statements).
These statements are likely to address the Company’s growth strategy, financial results, product approvals, product potential, development programs, environmental or other sustainability initiatives. One must carefully consider any 73 Table of Content s such statement and should understand that many factors could cause actual results to differ materially from the Company’s forward-looking statements.
These statements are likely to address the Company’s growth strategy, financial results, product approvals, product potential, or development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ materially from the Company’s forward-looking statements.
Summarized information about changes in the aggregate customer discount accrual related to U.S. sales is as follows: ($ in millions) 2024 2023 Balance January 1 $ 2,486 $ 2,918 Current provision 13,450 12,540 Adjustments to prior years (139) (70) Payments (13,334) (12,902) Balance December 31 $ 2,463 $ 2,486 Accruals for chargebacks are reflected as a direct reduction to accounts receivable and accruals for rebates as current liabilities.
Summarized information about changes in the aggregate customer discount accrual related to U.S. sales is as follows: ($ in millions) 2025 2024 Balance January 1 $ 2,463 $ 2,486 Current provision 10,219 13,450 Adjustments to prior years (249) (139) Payments (10,669) (13,334) Balance December 31 $ 1,764 $ 2,463 Accruals for chargebacks are reflected as a direct reduction to accounts receivable and accruals for rebates as current liabilities.
In November 2024, Merck’s Board of Directors approved an increase to the Company’s quarterly dividend, raising it to $0.81 per share from $0.77 per share on the Company’s outstanding common stock. During 2024, the Company returned $9.1 billion to shareholders through dividends of $7.8 billion and share repurchases of $1.3 billion.
In November 2025, Merck’s Board of Directors approved an increase to the Company’s quarterly dividend, raising it to $0.85 per share from $0.81 per share on the Company’s outstanding common stock. During 2025, the Company returned $13.3 billion to shareholders through dividends of $8.2 billion and share repurchases of $5.1 billion.
Capital Expenditures Capital expenditures were $3.4 billion in 2024, $3.9 billion in 2023 and $4.4 billion in 2022. Expenditures in the U.S. were $2.4 billion in 2024, $2.5 billion in 2023 and $2.7 billion in 2022.
Capital Expenditures Capital expenditures were $4.1 billion in 2025, $3.4 billion in 2024 and $3.9 billion in 2023. Expenditures in the U.S. were $2.5 billion in 2025, $2.4 billion in 2024 and $2.5 billion in 2023.
R&D expenses are comprised of the costs directly incurred by Merck Research Laboratories (MRL), the Company’s research and development division that focuses on human health-related activities, which were $10.1 billion in 2024 and $9.0 billion in 2023.
R&D expenses consist of the costs directly incurred by Merck Research Laboratories (MRL), the Company’s research and development division that focuses on human health-related activities, which were $10.8 billion in 2025 and $10.1 billion in 2024.
Virology ($ in millions) 2024 % Change % Change Excluding Foreign Exchange 2023 % Change % Change Excluding Foreign Exchange 2022 Lagevrio 964 (33) % (28) % 1,428 (75) % (74) % 5,684 Lagevrio is an investigational oral antiviral COVID-19 medicine being developed in a collaboration with Ridgeback Biotherapeutics LP (Ridgeback) (see Note 4 to the consolidated financial statements).
Virology ($ in millions) 2025 % Change % Change Excluding Foreign Exchange 2024 % Change % Change Excluding Foreign Exchange 2023 Lagevrio $ 380 (61) % (61) % $ 964 (33) % (28) % $ 1,428 Lagevrio is an investigational oral antiviral COVID-19 medicine being developed in a collaboration with Ridgeback (see Note 4 to the consolidated financial statements).
The treasury stock purchase authorization has no time limit and will be made over time in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions. In 2024, the Company purchased $1.3 billion (approximately 11 million shares) of its common stock for its treasury under this program.
The treasury stock purchase authorization has no time limit and will be made over time in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions. In 2025, the Company purchased $5.1 billion (approximately 59 million shares) of its common stock for its treasury under this and a previously authorized share repurchase program.
The accrued balances relative to these provisions included in Accounts receivable and Accrued and other current liabilities were $293 million and $2.2 billion, respectively, at December 31, 2024 and were $188 million and $2.3 billion, respectively, at December 31, 2023.
The accrued balances relative to these provisions included in Accounts receivable and Accrued and other current liabilities were $295 million and $1.5 billion, respectively, at December 31, 2025 and were $293 million and $2.2 billion, respectively, at December 31, 2024.
Worldwide sales of M-M-R II, a vaccine to help protect against measles, mumps and rubella, grew 8% in 2024 primarily due to higher demand in certain international markets, partially offset by lower demand in the U.S.
Worldwide sales of M-M-R II, a vaccine to help protect against measles, mumps and rubella, grew 3% in 2025 primarily due to higher sales in the U.S., largely reflecting higher net pricing and increased demand, partially offset by lower demand in certain international markets.
The information on non-GAAP income and non-GAAP EPS should be considered in addition to, but not as a substitute for or superior to, net income and EPS prepared in accordance with GAAP. 60 Table of Content s A reconciliation between GAAP financial measures and non-GAAP financial measures is as follows: ($ in millions except per share amounts) 2024 2023 2022 Income before taxes as reported under GAAP $ 19,936 $ 1,889 $ 16,444 Increase (decrease) for excluded items: Acquisition- and divestiture-related costs (1) 2,519 2,876 3,704 Restructuring costs 888 933 666 Loss (income) from investments in equity securities, net 45 (279) 1,348 Other items: Charge for Zetia antitrust litigation settlements — 573 — Non-GAAP income before taxes 23,388 5,992 22,162 Taxes on income as reported under GAAP 2,803 1,512 1,918 Estimated tax benefit on excluded items (2) 606 631 1,232 Tax benefit resulting from the expiration of the statute of limitations for assessments related to the 2019 and 2020 federal tax return years 519 — — Non-GAAP taxes on income 3,928 2,143 3,150 Non-GAAP net income 19,460 3,849 19,012 Less: Net income attributable to noncontrolling interests as reported under GAAP 16 12 7 Non-GAAP net income attributable to Merck & Co., Inc. $ 19,444 $ 3,837 $ 19,005 EPS assuming dilution as reported under GAAP (3) $ 6.74 $ 0.14 $ 5.71 EPS difference 0.91 1.37 1.77 Non-GAAP EPS assuming dilution (3) $ 7.65 $ 1.51 $ 7.48 (1) Amounts in 2024, 2023 and 2022 include $39 million, $792 million and $1.7 billion, respectively, of intangible asset impairment charges.
The information on non-GAAP income and non-GAAP EPS should be considered in addition to, but not as a substitute for or superior to, net income and EPS prepared in accordance with GAAP. 63 Table of Contents A reconciliation between GAAP financial measures and non-GAAP financial measures is as follows: ($ in millions except per share amounts) 2025 2024 2023 Income before taxes as reported under GAAP $ 21,067 $ 19,936 $ 1,889 Increase (decrease) for excluded items: Acquisition- and divestiture-related costs (1) 3,007 2,519 2,876 Restructuring costs 2,551 888 933 (Income) loss from investments in equity securities, net (306) 45 (279) Other items: Charge for Zetia antitrust litigation settlements — — 573 Non-GAAP income before taxes 26,319 23,388 5,992 Taxes on income as reported under GAAP 2,804 2,803 1,512 Estimated tax benefit on excluded items (2) 933 606 631 Net tax benefit, which reflects a net benefit related to favorable audit reserve adjustments 60 — — Tax benefit resulting from the expiration of the statute of limitations for assessments related to the 2019 and 2020 federal tax return years — 519 — Non-GAAP taxes on income 3,797 3,928 2,143 Non-GAAP net income 22,522 19,460 3,849 Less: Net income attributable to noncontrolling interests as reported under GAAP 9 16 12 Non-GAAP net income attributable to Merck & Co., Inc. $ 22,513 $ 19,444 $ 3,837 EPS assuming dilution as reported under GAAP (3) $ 7.28 $ 6.74 $ 0.14 EPS difference 1.70 0.91 1.37 Non-GAAP EPS assuming dilution (3) $ 8.98 $ 7.65 $ 1.51 (1) Amounts in 2025, 2024 and 2023 include $55 million, $39 million and $792 million, respectively, of intangible asset impairment charges.
The judgments made in determining estimated fair values assigned to assets acquired and liabilities assumed in a business combination, as well as asset lives, can materially affect the Company’s results of operations.
The operating results of the acquired business are reflected in the Company’s consolidated financial statements after the date of the acquisition. The judgments made in determining estimated fair values assigned to assets acquired and liabilities assumed in a business combination, as well as asset lives, can materially affect the Company’s results of operations.
Global sales growth was primarily due to higher sales in the oncology franchise, largely due to strong growth of Keytruda and Welireg , as well as increased alliance revenue from Reblozyl and Lynparza.
Global sales growth was primarily due to higher sales in the oncology franchise, largely due to the performance of Keytruda and Welireg , as well as increased alliance revenue from Koselugo (resulting from an amendment to the collaboration agreement), Reblozyl, and Lynparza.
If the Company determines the transaction will not be accounted for as an acquisition of a business, the transaction will be accounted for as an asset acquisition rather than a business combination and, therefore, no goodwill will be recorded.
If the Company determines the assets acquired do not meet the definition of a business under the acquisition method of accounting, the transaction will be accounted for as an asset acquisition rather than a business combination and, therefore, no goodwill will be recorded.
Therefore, shipping is not deemed a separately recognized performance obligation. 68 Table of Content s The vast majority of revenues from sales of products are recognized at a point in time when control of the goods is transferred to the customer, which the Company has determined is when title and risks and rewards of ownership transfer to the customer and the Company is entitled to payment.
The vast majority of revenues from sales of products are recognized at a point in time when control of the goods is transferred to the customer, which the Company has determined is when title and risks and rewards of ownership transfer to the customer and the Company is entitled to payment.
Also included in R&D expenses are Animal Health research costs, upfront payments for collaboration and licensing agreements (including charges for the transactions with LaNova, Hansoh, Daiichi Sankyo and Kelun-Biotech noted above), charges for transactions accounted for as asset acquisitions (including charges for the acquisitions of EyeBio, MK-1045, Harpoon, Prometheus and Imago noted above) and costs incurred by other divisions in support of R&D activities, including depreciation, production and general and administrative, which in the aggregate were $7.7 billion in 2024 and $20.7 billion in 2023.
Also included in R&D expenses are Animal Health research costs, upfront and milestone payments for collaboration and licensing agreements (including charges related to the transactions with LaNova, Hengrui Pharma, Falk, and Hansoh noted above), charges for transactions accounted for as asset acquisitions (including charges for the acquisitions of EyeBio, MK-1045, and Harpoon noted above), and costs incurred by other divisions in support of R&D activities, including depreciation, production, and general and administrative, which in the aggregate were $4.8 billion in 2025 and $7.7 billion in 2024.
Cardiovascular ($ in millions) 2024 % Change % Change Excluding Foreign Exchange 2023 % Change % Change Excluding Foreign Exchange 2022 Winrevair $ 419 — % — % $ — — % — % $ — Alliance Revenue - Adempas/Verquvo (1) 415 13 % 13 % 367 8 % 8 % 341 Adempas 287 12 % 14 % 255 7 % 8 % 238 (1) Alliance revenue for Adempas and 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 to the consolidated financial statements).
Cardiometabolic and Respiratory ($ in millions) 2025 % Change % Change Excluding Foreign Exchange 2024 % Change % Change Excluding Foreign Exchange 2023 Winrevair $ 1,443 * * $ 419 — — $ — Alliance Revenue - Adempas/Verquvo (1) 470 13 % 13 % 415 13 % 13 % 367 Adempas 312 9 % 6 % 287 12 % 14 % 255 Ohtuvayre 178 — — — — — — * > 100% (1) Alliance revenue for Adempas and 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 to the consolidated financial statements).
Keytruda sales growth in international markets reflects higher demand predominately for the TNBC, melanoma and RCC earlier-stage indications, as well as uptake in cervical, gastric and renal cell cancer metastatic indications. The Company expects that the 2025 launch and reimbursement of new indications for Keytruda in the EU will have a negative impact on pricing in those markets.
Sales growth in international markets reflects increased uptake predominately for the TNBC, NSCLC, and RCC earlier-stage indications, as well as higher demand in urothelial, gastric, cervical, and endometrial cancer metastatic indications. The 2025 launch and reimbursement of new indications for Keytruda in the EU had a negative impact on pricing in those markets.
The Company is diversifying its oncology portfolio and executing on its strategy which is broadly based on three strategic pillars: immuno-oncology, precision molecular targeting and tissue targeting.
The Company is diversifying its oncology portfolio and executing on its strategy which is broadly based on three strategic pillars: immuno-oncology, precision molecular targeting and tissue targeting. Merck has numerous Phase 3 oncology programs within these pillars.
Operating Results Sales ($ in millions) 2024 % Change % Change Excluding Foreign Exchange 2023 % Change % Change Excluding Foreign Exchange 2022 United States $ 32,277 13 % 13 % $ 28,480 5 % 5 % $ 27,206 International 31,891 1 % 6 % 31,635 (1) % 4 % 32,077 Total $ 64,168 7 % 10 % $ 60,115 1 % 4 % $ 59,283 Worldwide sales were $64.2 billion in 2024, representing growth of 7% compared with 2023, or 10% excluding the unfavorable effect of foreign exchange.
Operating Results Sales ($ in millions) 2025 % Change % Change Excluding Foreign Exchange 2024 % Change % Change Excluding Foreign Exchange 2023 United States $ 36,510 13 % 13 % $ 32,277 13 % 13 % $ 28,480 International 28,501 (11) % (10) % 31,891 1 % 6 % 31,635 Total $ 65,011 1 % 2 % $ 64,168 7 % 10 % $ 60,115 Worldwide sales were $65.0 billion in 2025, representing growth of 1% compared with 2024, or 2% excluding the unfavorable effect of foreign exchange.
See Note 15 to the consolidated financial statements for further information pertaining to the transition tax and liabilities for unrecognized tax benefits. Operating Leases — See Note 9 to consolidated financial statements for further details of the Company’s lease obligations and the timing of expected future lease payments.
Operating Leases — See Note 9 to consolidated financial statements for further details of the Company’s lease obligations and the timing of expected future lease payments.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk. The information required by this Item is incorporated by reference to the discussion under “Financial Instruments Market Risk Disclosures” in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 74 Table of Content s
Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk. The information required by this Item is incorporated by reference to the discussion under “Financial Instruments Market Risk Disclosures” in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 76 Table of Contents