MERCK & CO., INC., 10-Q filed on 11/5/2021
Quarterly Report
v3.21.2
Cover Page - shares
 9 Months Ended
Sep. 30, 2021
Oct. 31, 2021
Entity Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2021  
Document Transition Report false  
Entity File Number 1-6571  
Entity Registrant Name Merck & Co., Inc.  
Entity Incorporation, State or Country Code NJ  
Entity Tax Identification Number 22-1918501  
Entity Address, Address Line One 2000 Galloping Hill Road  
Entity Address, City or Town Kenilworth  
Entity Address, State or Province NJ  
Entity Address, Postal Zip Code 07033  
City Area Code (908)  
Local Phone Number 740-4000  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   2,525,943,936
Amendment Flag false  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q3  
Entity Central Index Key 0000310158  
Current Fiscal Year End Date --12-31  
Common Stock ($0.50 par value)    
Entity Information [Line Items]    
Title of 12(b) Security Common Stock ($0.50 par value)  
Trading Symbol MRK  
Security Exchange Name NYSE  
0.500% Notes due 2024    
Entity Information [Line Items]    
Title of 12(b) Security 0.500% Notes due 2024  
Trading Symbol MRK 24  
Security Exchange Name NYSE  
1.875% Notes due 2026    
Entity Information [Line Items]    
Title of 12(b) Security 1.875% Notes due 2026  
Trading Symbol MRK/26  
Security Exchange Name NYSE  
2.500% Notes due 2034    
Entity Information [Line Items]    
Title of 12(b) Security 2.500% Notes due 2034  
Trading Symbol MRK/34  
Security Exchange Name NYSE  
1.375% Notes due 2036    
Entity Information [Line Items]    
Title of 12(b) Security 1.375% Notes due 2036  
Trading Symbol MRK 36A  
Security Exchange Name NYSE  
v3.21.2
CONDENSED CONSOLIDATED STATEMENT OF INCOME - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Income Statement [Abstract]        
Sales $ 13,154 $ 10,929 $ 35,183 $ 30,570
Costs, Expenses and Other        
Cost of sales 3,450 3,013 9,752 8,589
Selling, general and administrative 2,336 2,060 6,804 6,336
Research and development 2,445 3,349 9,177 7,609
Restructuring costs 107 113 487 265
Other (income) expense, net (450) (312) (1,007) (637)
Total Costs, Expenses and Other 7,888 8,223 25,213 22,162
Income from Continuing Operations Before Taxes 5,266 2,706 9,970 8,408
Taxes on Income from Continuing Operations 695 380 1,436 1,271
Net Income from Continuing Operations 4,571 2,326 8,534 7,137
Less: Net Income Attributable to Noncontrolling Interests 4 2 9 1
Net Income from Continuing Operations Attributable to Merck & Co., Inc. 4,567 2,324 8,525 7,136
Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests 0 617 766 2,025
Net Income Attributable to Merck & Co. Inc. $ 4,567 $ 2,941 $ 9,291 $ 9,161
Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders:        
Income from Continuing Operations (in dollars per share) $ 1.81 $ 0.92 $ 3.37 $ 2.82
Income from Discontinued Operations (in dollars per share) 0 0.24 0.30 0.80
Net Income (in dollars per share) 1.81 1.16 3.67 3.62
Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders:        
Income from Continuing Operations (in dollars per share) 1.80 0.92 3.36 2.81
Income from Discontinued Operations (in dollars per share) 0 0.24 0.30 0.80
Net Income (in dollars per share) $ 1.80 $ 1.16 $ 3.66 $ 3.61
v3.21.2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Statement of Comprehensive Income [Abstract]        
Net Income Attributable to Merck & Co., Inc. $ 4,567 $ 2,941 $ 9,291 $ 9,161
Other Comprehensive Income (Loss) Net of Taxes:        
Net unrealized gain (loss) on derivatives, net of reclassifications 84 (137) 324 (153)
Net unrealized loss on investments, net of reclassifications 0 0 0 (18)
Benefit plan net gain and prior service credit, net of amortization 38 62 1,522 161
Cumulative translation adjustment (84) 85 (251) (180)
Other comprehensive income (loss), net of taxes 38 10 1,595 (190)
Comprehensive Income Attributable to Merck & Co., Inc. $ 4,605 $ 2,951 $ 10,886 $ 8,971
v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
Current Assets    
Cash and cash equivalents $ 10,016 $ 8,050
Accounts receivable (net of allowance for doubtful accounts of $69 in 2021 and $67 in 2020) 8,571 6,803
Inventories (excludes inventories of $2,373 in 2021 and $2,070 in 2020 classified in Other assets - see Note 7) 5,603 5,554
Other current assets 6,868 4,674
Current assets of discontinued operations 0 2,683
Total current assets 31,058 27,764
Investments 435 785
Property, Plant and Equipment, at cost, net of accumulated depreciation of $18,155 in 2021 and $18,162 in 2020 18,565 17,000
Goodwill 18,862 18,882
Other Intangibles, Net 13,384 14,101
Other Assets 11,190 9,881
Noncurrent Assets of Discontinued Operations 0 3,175
Total Assets 93,494 91,588
Current Liabilities    
Loans payable and current portion of long-term debt 3,534 6,431
Trade accounts payable 3,366 4,327
Accrued and other current liabilities 14,214 12,212
Income taxes payable 954 1,597
Dividends payable 1,660 1,674
Current liabilities of discontinued operations 0 1,086
Total current liabilities 23,728 27,327
Long-Term Debt 22,907 25,360
Deferred Income Taxes 1,527 1,005
Other Noncurrent Liabilities 9,469 12,306
Noncurrent Liabilities of Discontinued Operations 0 186
Merck & Co., Inc. Stockholders’ Equity    
Common stock, $0.50 par value Authorized - 6,500,000,000 shares Issued - 3,577,103,522 shares in 2021 and 2020 1,788 1,788
Other paid-in capital 44,149 39,588
Retained earnings 51,691 47,362
Accumulated other comprehensive loss (4,590) (6,634)
Stockholders' equity before deduction for treasury stock 93,038 82,104
Less treasury stock, at cost: 1,051,780,149 shares in 2021 and 1,046,877,695 shares in 2020 57,244 56,787
Total Merck & Co., Inc. stockholders’ equity 35,794 25,317
Noncontrolling Interests 69 87
Total equity 35,863 25,404
Liabilities and Equity $ 93,494 $ 91,588
v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts $ 69 $ 67
Inventories classified in Other assets 2,373 2,070
Accumulated depreciation $ 18,155 $ 18,162
Common stock, par value (in dollars per share) $ 0.50 $ 0.50
Common stock, authorized (shares) 6,500,000,000 6,500,000,000
Common stock, issued (in shares) 3,577,103,522 3,577,103,522
Treasury stock (in shares) 1,051,780,149 1,046,877,695
v3.21.2
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Cash Flows from Operating Activities    
Net income from continuing operations $ 8,534 $ 7,137
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:    
Amortization 1,231 1,393
Depreciation 1,148 1,210
Intangible asset impairment charges 0 35
Income from investments in equity securities, net (1,535) (964)
Charge for the acquisition of Pandion Therapeutics, Inc. 1,556 0
Deferred income taxes 28 32
Share-based compensation 360 329
Other 499 519
Net changes in assets and liabilities (3,794) (5,484)
Net Cash Provided by Operating Activities from Continuing Operations 8,027 4,207
Cash Flows from Investing Activities    
Capital expenditures (3,240) (2,998)
Purchases of securities and other investments (1) (78)
Proceeds from sales of securities and other investments 497 1,894
Acquisition of Pandion Therapeutics, Inc. net of cash acquired (1,554) 0
Acquisition of ArQule, Inc., net of cash acquired 0 (2,545)
Other acquisitions, net of cash acquired (89) (907)
Other 15 138
Net Cash Used in Investing Activities from Continuing Operations (4,372) (4,496)
Cash Flows from Financing Activities    
Net change in short-term borrowings (3,983) (311)
Payments on debt (1,153) (1,954)
Distribution from Organon & Co. 9,000 0
Proceeds from issuance of debt 0 4,419
Purchases of treasury stock (822) (1,281)
Dividends paid to stockholders (4,967) (4,673)
Proceeds from exercise of stock options 68 68
Other (253) (472)
Net Cash Used in Financing Activities from Continuing Operations (2,110) (4,204)
Discontinued Operations    
Net cash provided by operating activities 1,051 2,040
Net cash used in investing activities (134) (169)
Net cash used in financing activities (504) 0
Net Cash Flows Provided by Discontinued Operations 413 1,871
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash (65) 89
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash 1,893 (2,533)
Cash, Cash Equivalents and Restricted Cash at Beginning of Year (includes restricted cash of $103 at January 1, 2021 included in Other Assets) 8,153 9,934
Cash, Cash Equivalents and Restricted Cash at End of Period (includes restricted cash of $30 at September 30, 2021 included in Other Assets) $ 10,046 $ 7,401
v3.21.2
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Parenthetical) - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
Statement of Cash Flows [Abstract]    
Restricted cash $ 30 $ 103
v3.21.2
Basis of Presentation
 9 Months Ended
Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Merck & Co., Inc. (Merck or the Company) have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by accounting principles generally accepted in the United States (U.S.) (GAAP) for complete consolidated financial statements are not included herein. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Merck’s Form 10-K filed on February 25, 2021.
The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. In the Company’s opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature.
Reclassifications — Certain reclassifications have been made to prior year amounts to conform to the current year presentation.
Spin-Off of Organon & Co.
On June 2, 2021, Merck completed the spin-off of products from its women’s health, biosimilars and established brands businesses into a new, independent, publicly traded company named Organon & Co. (Organon) through a distribution of Organon’s publicly traded stock to Company shareholders. The established brands included in the transaction consisted of dermatology, non-opioid pain management, respiratory, select cardiovascular products, as well as the rest of Merck’s diversified brands franchise. Merck’s existing research pipeline programs continue to be owned and developed within Merck as planned. The historical results of the women’s health, biosimilars and established brands businesses that were contributed to Organon in the spin-off have been reflected as discontinued operations in the Company’s consolidated financial statements through the date of the spin-off (see Note 2).
Recently Adopted Accounting Standards
In December 2019, the Financial Accounting Standards Board (FASB) issued amended guidance on the accounting and reporting of income taxes. The guidance is intended to simplify the accounting for income taxes by removing exceptions related to certain intraperiod tax allocations and deferred tax liabilities, clarifying guidance primarily related to evaluating the step-up tax basis for goodwill in a business combination, and reflecting enacted changes in tax laws or rates in the annual effective tax rate. The Company adopted the new guidance effective January 1, 2021. There was no impact to the Company’s consolidated financial statements upon adoption.
In January 2020, the FASB issued new guidance intended to clarify certain interactions between accounting standards related to equity securities, equity method investments and certain derivatives. The guidance addresses accounting for the transition into and out of the equity method of accounting and measuring certain purchased options and forward contracts to acquire investments. The Company adopted the new guidance effective January 1, 2021. There was no impact to the Company’s consolidated financial statements upon adoption.
Recently Issued Accounting Standards Not Yet Adopted
In March 2020, the FASB issued optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and subsequently issued clarifying amendments. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The optional guidance is effective upon issuance and can be applied on a prospective basis at any time between January 1, 2020 through December 31, 2022. The Company is currently evaluating the impact of adoption on its consolidated financial statements.
In August 2020, the FASB issued amended guidance on the accounting for convertible instruments and contracts in an entity’s own equity. The guidance removes the separation model for convertible debt instruments and preferred stock, amends requirements for conversion options to be classified in equity as well as amends diluted earnings per share (EPS) calculations for certain convertible debt instruments. The amended guidance is effective for interim and annual periods in 2022. Early adoption is permitted. The application of the amendments in the new guidance are to be applied either on a modified retrospective or a retrospective basis. The Company is currently evaluating the impact of adoption on its consolidated financial statements.
In October 2021, the FASB issued amended guidance that requires acquiring entities to recognize and measure contract assets and liabilities in a business combination in accordance with existing revenue recognition guidance. The amended guidance is effective for interim and annual periods in 2023 and is to be applied prospectively. Early adoption is permitted on a retrospective basis to the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of adoption on its consolidated financial statements.
v3.21.2
Spin-Off of Organon & Co.
 9 Months Ended
Sep. 30, 2021
Discontinued Operations and Disposal Groups [Abstract]  
Spin-Off of Organon & Co. Spin-Off of Organon & Co.
On June 2, 2021, Merck completed the spin-off of Organon through a distribution of Organon’s publicly traded stock to Company shareholders. In connection with the spin-off, each Merck shareholder received one tenth of a share of Organon’s common stock for each share of Merck common stock held by such shareholder. The distribution is expected to qualify as tax free to Merck and its shareholders for U.S. federal income tax purposes. Indebtedness of $9.5 billion principal amount, consisting of term loans and senior notes, was issued in 2021 in connection with the spin-off and assumed by Organon. Merck is no longer the obligor of any Organon debt or financing arrangements. Cash proceeds of $9.0 billion were distributed by Organon to Merck in connection with the spin-off.
Also in connection with the spin-off, Merck and Organon entered into a separation and distribution agreement and also entered into various other agreements to effect the spin-off and provide a framework for the relationship between Merck and Organon after the spin-off, including a transition services agreement (TSA), manufacturing and supply agreements (MSAs), trademark license agreements, intellectual property license agreements, an employee matters agreement, a tax matters agreement and certain other commercial agreements. Under the TSA, Merck will provide Organon various services and, similarly, Organon will provide Merck various services. The provision of services under the TSA agreement generally will terminate within 25 months following the spin-off. Merck and Organon also entered into a series of interim operating agreements pursuant to which in various jurisdictions where Merck held licenses, permits and other rights in connection with marketing, import and/or distribution of Organon products prior to the separation, Merck will continue to market, import and distribute such products until such time as the relevant licenses and permits are transferred to Organon. Under such interim operating agreements and in accordance with the separation and distribution agreement, Merck will continue operations in the affected markets on behalf of Organon, with Organon receiving all of the economic benefits and burdens of such activities. Additionally, Merck and Organon entered into a number of MSAs pursuant to which Merck will (a) manufacture and supply certain active pharmaceutical ingredients for Organon, (b) toll manufacture and supply certain formulated pharmaceutical products for Organon, and (c) package and label certain finished pharmaceutical products for Organon. Similarly, Organon and Merck entered into a number of MSAs pursuant to which Organon will (a) manufacture and supply certain formulated pharmaceutical products for Merck, and (b) package and label certain finished pharmaceutical products for Merck. The terms of the MSAs range in initial duration from four years to ten years.
Amounts included in the condensed consolidated statement of income for the above agreements were immaterial in the third quarter and first nine months of 2021. The amount due from Organon under the above agreements was $1.4 billion at September 30, 2021 and is reflected in Other current assets. The amount due to Organon under these agreements was $930 million at September 30, 2021 and is included in Accrued and other current liabilities.
The results of the women’s health, biosimilars and established brands businesses (previously included in the Pharmaceutical segment) that were contributed to Organon in the spin-off, as well as interest expense related to the debt issuance in 2021, have been reflected as discontinued operations in the Company’s condensed consolidated statement of income as Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests through June 2, 2021, the date of the spin-off. Prior periods have been recast to reflect this presentation. As a result of the spin-off of Organon, Merck incurred separation costs of $556 million in the nine months ended September 30, 2021, and $193 million and $483 million in the three and nine months ended September 30, 2020, respectively, which are also included in Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests. These costs primarily relate to professional fees for separation activities within finance, tax, legal and information technology functions, as well as investment banking fees. As of December 31, 2020, the assets and liabilities associated with these businesses are classified as assets and liabilities of discontinued operations in the condensed consolidated balance sheet.
Details of Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests are as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2020
2021 (1)
2020
Sales$1,622 $2,512 $4,911 
Costs, Expenses and Other
Cost of sales468 789 1,362 
Selling, general and administrative390 877 1,046 
Research and development41 103 113 
Restructuring costs1 1 4 
Other (income) expense, net— (15)7 
900 1,755 2,532 
Income from discontinued operations before taxes722 757 2,379 
Tax provision (benefit)103 (12)343 
Income from discontinued operations, net of taxes619 769 2,036 
Less: Income of discontinued operations attributable to noncontrolling interests2 3 11 
Income from discontinued operations, net of taxes and amounts attributable to noncontrolling interests$617 $766 $2,025 
(1) Reflects amounts through the June 2, 2021 spin-off date.
Details of assets and liabilities of discontinued operations are as follows: 
($ in millions)December 31, 2020
Cash and cash equivalents$12 
Accounts receivable, less allowance for doubtful accounts1,048 
Inventories756 
Other current assets867 
Current assets of discontinued operations$2,683 
Property, plant and equipment, net$986 
Goodwill1,356 
Other intangibles, net503 
Other assets330 
Noncurrent Assets of Discontinued Operations$3,175 
Trade accounts payable$267 
Accrued and other current liabilities841 
Income taxes payable(22)
Total current liabilities of discontinued operations$1,086 
Deferred income taxes$10 
Other noncurrent liabilities176 
Noncurrent Liabilities of Discontinued Operations$186 
As a result of the spin-off of Organon, Merck distributed net liabilities of $5.1 billion as of June 2, 2021 consisting of debt of $9.4 billion (described above), goodwill of $1.4 billion, property, plant and equipment of $981 million, cash of $929 million, inventory of $815 million, other intangibles, net, of $519 million and other net liabilities of $328 million. The spin-off also resulted in a net decrease to Accumulated other comprehensive loss (AOCL) of $449 million consisting of $421 million for the derecognition of net losses on foreign currency translation adjustments and $28 million associated with employee benefit plans. The distribution of the net liabilities and reduction to AOCL resulted in a net $4.6 billion increase to Other paid-in capital.
The Company has share-based compensation plans under which the Company grants restricted stock units (RSUs) and performance share units (PSUs) to certain management level employees. In addition, employees and non-employee directors were granted options to purchase shares of Company common stock at the fair market value at the time of grant. In connection with the spin-off of Organon, all outstanding Merck stock options, RSUs and PSUs (whether vested or unvested) were converted into adjusted Merck awards for current and former Merck employees or Organon awards for Organon employees. Such adjusted awards preserved the same intrinsic value and general terms and conditions (including vesting) as were in place immediately prior to the adjustments. Approximately 1.3 million RSUs, 1.9 million stock options and 248 thousand PSUs were converted from Merck awards into Organon awards.Expenses for curtailments, settlements and termination benefits provided to certain employees were incurred in connection with the spin-off. Additionally, the transfer of employees to Organon triggered remeasurements of some of the Company’s pension plans (see Note 11).
v3.21.2
Acquisitions, Research Collaborations and License Agreements
 9 Months Ended
Sep. 30, 2021
Business Combination and Asset Acquisition [Abstract]  
Acquisitions, Research Collaborations and License Agreements Acquisitions, Research Collaborations and License Agreements
The Company continues to pursue acquisitions and the establishment of external alliances such as research collaborations and licensing agreements to complement its internal research capabilities. These arrangements often include upfront payments, as well as expense reimbursements or payments to the third party, and milestone, royalty or profit share arrangements, contingent upon the occurrence of certain future events linked to the success of the asset in development. The Company also reviews its marketed products and pipeline to examine candidates which may provide more value through out-licensing and, as part of its portfolio assessment process, may also divest certain assets. Pro forma financial information for acquired businesses is not presented if the historical financial results of the acquired entity are not significant when compared with the Company’s financial results.
In September 2021, Merck and Acceleron Pharma Inc. (Acceleron), a publicly traded biopharmaceutical company, entered into a definitive agreement under which Merck will acquire Acceleron for $180 per share in cash for an approximate total equity value of $11.5 billion. Acceleron is focused on harnessing the power of the transforming growth factor (TGF)-beta superfamily of proteins that is known to play a central role in the regulation of cell growth, differentiation and repair. Acceleron’s lead therapeutic candidate, sotatercept, has a novel mechanism of action with the potential to improve short-term and/or long-term clinical outcomes in patients with pulmonary arterial hypertension (PAH). Sotatercept is in Phase 3 trials as add-on to current standard of care for the treatment of PAH. In addition to sotatercept, Acceleron’s portfolio includes Reblozyl (luspatercept-aamt), a first-in-class erythroid maturation recombinant fusion protein approved in the U.S., Europe, Canada and Australia for the treatment of anemia in certain rare blood disorders. Reblozyl is being developed and commercialized through a global collaboration with Bristol Myers Squibb. Under the terms of the acquisition agreement, Merck, through a subsidiary, initiated a tender offer to acquire all outstanding shares of Acceleron. The closing of the tender offer is subject to certain conditions, including the tender of shares representing at least a majority of the total number of Acceleron’s outstanding shares, receipt of applicable regulatory approvals, and other customary conditions. The acquisition agreement includes termination provisions providing that (i) in the event Acceleron terminates in order to enter into an agreement with respect to a superior proposal (as defined in the agreement), Acceleron will be required to pay a termination fee of $345 million, and (ii) in the event the acquisition is not consummated due to antitrust conditions, Merck will be required to pay Acceleron a reverse termination fee of $650 million to $750 million depending on the time of termination. The transaction is expected to close in the fourth quarter of 2021.
In April 2021, Merck acquired Pandion Therapeutics, Inc. (Pandion), a clinical-stage biotechnology company developing novel therapeutics designed to address the unmet needs of patients living with autoimmune diseases. Pandion is advancing a pipeline of precision immune modulators targeting critical immune control nodes. Total consideration paid of $1.9 billion included $147 million of transaction costs primarily comprised of share-based compensation payments to settle equity awards. The transaction was accounted for as an acquisition of an asset. Merck recorded net assets of $156 million (primarily cash) and Research and development expenses of $1.7 billion in the first nine months of 2021 related to the transaction. There are no future contingent payments associated with the acquisition.
In March 2021, Merck and Gilead Sciences, Inc. (Gilead) entered into an agreement to jointly develop and commercialize long-acting treatments in HIV that combine Merck’s investigational nucleoside reverse transcriptase translocation inhibitor, islatravir, and Gilead’s investigational capsid inhibitor, lenacapavir. The collaboration will initially focus on long-acting oral formulations and long-acting injectable formulations of these combination products, with other formulations potentially added to the collaboration as mutually agreed. There was no upfront payment made by either party upon entering into the agreement.
Under the terms of the agreement, Gilead and Merck will share operational responsibilities, as well as development, commercialization and marketing costs, and any future revenues. Global development and commercialization costs will be shared 60% Gilead and 40% Merck across the oral and injectable formulation programs. For long-acting oral products, Gilead
will lead commercialization in the U.S. and Merck will lead commercialization in the EU and the rest of the world. For long-acting injectable products, Merck will lead commercialization in the U.S. and Gilead will lead commercialization in the EU and the rest of the world. Gilead and Merck will co-promote in the U.S. and certain other major markets. Merck and Gilead will share global product revenues equally until product revenues surpass certain pre-agreed per formulation revenue tiers. Upon passing $2.0 billion a year in net product sales for the oral combination, the revenue split will adjust to 65% Gilead and 35% Merck for any revenues above the threshold. Upon passing $3.5 billion a year in net product sales for the injectable combination, the revenue split will adjust to 65% Gilead and 35% Merck for any revenues above the threshold.
Beyond the potential combinations of investigational lenacapavir and investigational islatravir, Gilead will have the option to license certain of Merck’s investigational oral integrase inhibitors to develop in combination with lenacapavir. Reciprocally, Merck will have the option to license certain of Gilead’s investigational oral integrase inhibitors to develop in combination with islatravir. Each company may exercise its option for an investigational oral integrase inhibitor of the other company following completion of the first Phase 1 clinical trial of that integrase inhibitor. Upon exercise of an option, the companies will split development costs and revenues, unless the non-exercising company decides to opt-out.
In January 2021, Merck entered into an exclusive license and research collaboration agreement with Artiva Biotherapeutics, Inc. (Artiva) to discover, develop and manufacture CAR-NK cells that target certain solid tumors using Artiva’s proprietary platform. Merck and Artiva agreed to engage in up to three different research programs, each covering a collaboration target. Merck has sole responsibility for all development and commercialization activities (including regulatory filing and approval). Under the terms of the agreement, Merck made an upfront payment of $30 million, which was included in Research and development expenses in the first nine months of 2021, for license and other rights for the first two collaboration targets and agreed to make another upfront payment of $15 million for license and other rights for the third collaboration target when it is selected by Merck and accepted by Artiva. In addition, Artiva is eligible to receive future contingent milestone payments (which span all three collaboration targets), aggregating up to: $217.5 million in developmental milestones, $570 million in regulatory milestones, and $1.05 billion in sales-based milestones. The agreement also provides for Merck to pay tiered royalties ranging from 7% to 14% on future sales.
In December 2020, Merck acquired OncoImmune, a privately held, clinical-stage biopharmaceutical company, for an upfront payment of $423 million. OncoImmune’s lead therapeutic candidate MK-7110 (formerly known as CD24Fc) was being evaluated for the treatment of patients hospitalized with coronavirus disease 2019 (COVID-19). The transaction was accounted for as an acquisition of an asset. Under the agreement, prior to the completion of the acquisition, OncoImmune spun-out certain rights and assets unrelated to the MK-7110 program to a new entity owned by the existing shareholders of OncoImmune. In connection with the closing of the acquisition, Merck invested $50 million for a 20% ownership interest in the new entity, which was valued at $33 million resulting in a $17 million premium. Merck also recognized other net liabilities of $22 million. The Company recorded Research and development expenses of $462 million in 2020 related to this transaction. In 2021, Merck received feedback from the U.S. Food and Drug Administration (FDA) that additional data would be needed to support a potential Emergency Use Authorization application and therefore the Company did not expect MK-7110 would become available until the first half of 2022. Given this timeline and the technical, clinical and regulatory uncertainties, the availability of a number of medicines for patients hospitalized with COVID-19, and the need to concentrate Merck’s resources on accelerating the development and manufacture of the most viable therapeutics and vaccines, Merck decided to discontinue development of MK-7110 for the treatment of COVID-19. Due to the discontinuation, the Company recorded charges of $207 million in the first nine months of 2021, which are reflected in Cost of sales and relate to fixed-asset and materials write-offs, as well as the recognition of liabilities for purchase commitments.
In September 2020, Merck and Seagen Inc. (Seagen, formerly known as Seattle Genetics, Inc.) announced an oncology collaboration to globally develop and commercialize Seagen’s ladiratuzumab vedotin (MK-6440), an investigational antibody-drug conjugate targeting LIV-1, which is currently in Phase 2 clinical trials. The collaboration will pursue a broad joint development program evaluating ladiratuzumab vedotin as monotherapy and in combination with Keytruda (pembrolizumab) in triple-negative breast cancer, hormone receptor-positive breast cancer and other LIV-1-expressing solid tumors. The companies will equally share profits worldwide. Under the terms of the agreement, Merck made an upfront payment of $600 million and a $1.0 billion equity investment in 5 million shares of Seagen common stock at a price of $200 per share. Merck recorded $622 million in Research and development expenses in the third quarter and first nine months of 2020 related to this transaction reflecting the upfront payment as well as a $22 million mark-to-market loss on the purchase commitment (forward contract) relating to the equity shares (calculated based on the closing price of Seagen common stock on September 30, 2020). The closing of the equity investment occurred in October 2020 and resulted in the recognition of a $6 million reduction to Research and development expenses based on the price of Seagen common stock on the closing date. Seagen is also eligible to receive future contingent milestone payments of up to $2.6 billion, including $850 million in development milestones and $1.75 billion in sales-based milestones.
Concurrent with the above transaction, Seagen granted Merck an exclusive license to commercialize Tukysa (tucatinib), a small molecule tyrosine kinase inhibitor, for the treatment of human epidermal growth factor receptor 2 (HER2)-
positive cancers, in Asia, the Middle East and Latin America and other regions outside of the U.S., Canada and Europe. Merck will be responsible for marketing applications seeking approval in its territories, supported by the positive results from the HER2CLIMB clinical trial. Merck will also co-fund a portion of the Tukysa global development plan, which encompasses several ongoing and planned trials across HER2-positive cancers, including breast, colorectal, gastric and other cancers set forth in a global product development plan. Merck will solely fund and conduct country-specific clinical trials necessary to support anticipated regulatory applications in its territories. Under the terms of the agreement, Merck made upfront payments aggregating $210 million, which were recorded as Research and development expenses in the third quarter and first nine months of 2020. Seagen is also eligible to receive future contingent regulatory approval milestones of up to $65 million and will receive tiered royalties ranging from 20% to 33% based on annual sales levels of Tukysa in Merck’s territories.
Additionally in September 2020, Merck acquired a biologics manufacturing facility located in Dunboyne, Ireland from Takeda Pharmaceutical Company Limited for €256 million ($302 million). The transaction was accounted for as an acquisition of an asset. Merck recorded property, plant and equipment of $289 million and other net assets of $13 million. There are no future contingent payments associated with the acquisition.
In July 2020, Merck acquired the U.S. rights to Sentinel Flavor Tabs and Sentinel Spectrum Chews from Virbac Corporation for $410 million. Sentinel products provide protection against common parasites in dogs. The transaction was accounted for as an acquisition of an asset. Merck recognized intangible assets of $401 million related to currently marketed products and inventory of $9 million at the acquisition date. The estimated fair values of the identifiable intangible assets related to currently marketed products were determined using an income approach. Actual cash flows are likely to be different than those assumed. The intangible assets related to currently marketed products will be amortized over their estimated useful lives of 15 years. There are no future contingent payments associated with the acquisition.
Also in July 2020, Merck and Ridgeback Biotherapeutics LP (Ridgeback Bio), a closely held biotechnology company, closed a collaboration agreement to develop molnupiravir (MK-4482/EIDD-2801) an orally available antiviral candidate in clinical development for the treatment of patients with COVID-19. Merck gained exclusive worldwide rights to develop and commercialize molnupiravir and related molecules. Under the terms of the agreement, Ridgeback Bio received an upfront payment and is eligible to receive future contingent payments dependent upon the achievement of certain developmental and regulatory approval milestones. Any profits from the collaboration will be split between the partners equally. Merck and Ridgeback Bio are committed to ensure that any medicines developed for SARS-CoV-2 (the causative agent of COVID-19) will be accessible and affordable globally.
In June 2020, Merck acquired privately held Themis Bioscience GmbH (Themis), a company focused on vaccines (including a COVID-19 vaccine candidate, V591) and immune-modulation therapies for infectious diseases and cancer for $366 million. The acquisition originally provided for Merck to make additional contingent payments of up to $740 million. The transaction was accounted for as an acquisition of a business. The Company determined the fair value of the contingent consideration was $85 million at the acquisition date utilizing a probability-weighted estimated cash flow stream using an appropriate discount rate dependent on the nature and timing of the milestone payments. Merck recognized intangible assets for in-process research and development (IPR&D) of $113 million, cash of $59 million, deferred tax assets of $72 million and other net liabilities of $32 million. The excess of the consideration transferred over the fair value of net assets acquired of $239 million was recorded as goodwill that was allocated to the Pharmaceutical segment and is not deductible for tax purposes. The fair values of the identifiable intangible assets related to IPR&D were determined using an income approach. Actual cash flows are likely to be different than those assumed. In January 2021, the Company announced it was discontinuing development of V591. As a result, in the fourth quarter of 2020, the Company recorded an IPR&D impairment charge of $90 million within Research and development expenses. The Company also recorded a reduction in Research and development expenses resulting from a decrease in the related liability for contingent consideration of $45 million since future contingent milestone payments have been reduced to $450 million in the aggregate, including up to $60 million for development milestones, up to $196 million for regulatory approval milestones, and up to $194 million for commercial milestones.
In January 2020, Merck acquired ArQule, Inc. (ArQule), a publicly traded biopharmaceutical company focused on kinase inhibitor discovery and development for the treatment of patients with cancer and other diseases. Total consideration paid of $2.7 billion included $138 million of share-based compensation payments to settle equity awards attributable to precombination service and cash paid for transaction costs on behalf of ArQule. The Company incurred $95 million of transaction costs directly related to the acquisition of ArQule, consisting almost entirely of share-based compensation payments to settle non-vested equity awards attributable to postcombination service. These costs were included in Selling, general and administrative expenses in the first nine months of 2020. ArQule’s lead investigational candidate, MK-1026 (formerly known as ARQ 531), is a novel, oral Bruton’s tyrosine kinase (BTK) inhibitor currently being evaluated for the treatment of B-cell malignancies. The transaction was accounted for as an acquisition of a business.
The estimated fair value of assets acquired and liabilities assumed from ArQule is as follows:
($ in millions)January 16, 2020
Cash and cash equivalents$145 
IPR&D MK-1026 (formerly ARQ 531) (1)
2,280 
Licensing arrangement for ARQ 08780 
Deferred income tax liabilities(361)
Other assets and liabilities, net34 
Total identifiable net assets2,178 
Goodwill (2)
512 
Consideration transferred$2,690 
(1) The estimated fair value of the identifiable intangible asset related to IPR&D was determined using an income approach. The future net cash flows were discounted to present value utilizing a discount rate of 12.5%. Actual cash flows are likely to be different than those assumed.
(2) The goodwill was allocated to the Pharmaceutical segment and is not deductible for tax purposes.
v3.21.2
Collaborative Arrangements
 9 Months Ended
Sep. 30, 2021
Collaborative Arrangements [Abstract]  
Collaborative Arrangements Collaborative Arrangements
Merck has entered into collaborative arrangements that provide the Company with varying rights to develop, produce and market products together with its collaborative partners. Both parties in these arrangements are active participants and exposed to significant risks and rewards dependent on the commercial success of the activities of the collaboration. Merck’s more significant collaborative arrangements are discussed below. For further details refer to Note 4 to the consolidated financial statements included in Merck’s 2020 Form 10‑K.
AstraZeneca
In 2017, Merck and AstraZeneca PLC (AstraZeneca) entered into a global strategic oncology collaboration to co-develop and co-commercialize AstraZeneca’s Lynparza (olaparib) for multiple cancer types. Independently, Merck and AstraZeneca will develop and commercialize Lynparza in combinations with their respective PD-1 and PD-L1 medicines, Keytruda and Imfinzi. The companies are also jointly developing and commercializing AstraZeneca’s Koselugo (selumetinib) for multiple indications. Under the terms of the agreement, AstraZeneca and Merck will share the development and commercialization costs for Lynparza and Koselugo monotherapy and non-PD-L1/PD-1 combination therapy opportunities.
Profits from Lynparza and Koselugo product sales generated through monotherapies or combination therapies are shared equally. AstraZeneca is the principal on Lynparza and Koselugo sales transactions. Merck records its share of Lynparza and Koselugo product sales, net of cost of sales and commercialization costs, as alliance revenue and its share of development costs associated with the collaboration as part of Research and development expenses. Reimbursements received from AstraZeneca for research and development expenses are recognized as reductions to Research and development costs.
As part of the agreement, Merck made an upfront payment to AstraZeneca and also made payments over a multi-year period for certain license options. In addition, the agreement provides for additional contingent payments from Merck to AstraZeneca related to the successful achievement of sales-based and regulatory milestones. As of September 30, 2021, sales-based milestone payments accrued but not yet paid totaled $400 million. Potential future sales-based milestone payments of $2.7 billion have not yet been accrued as they are not deemed by the Company to be probable at this time. Additionally, potential future regulatory milestone payments of $1.4 billion remain under the agreement.
The intangible asset balance related to Lynparza (which includes capitalized sales-based and regulatory milestone payments) was $1.1 billion at September 30, 2021 and is included in Other Intangibles, Net. The amount is being amortized over its estimated useful life through 2028 as supported by projected future cash flows, subject to impairment testing.
Summarized financial information related to this collaboration is as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Alliance revenue - Lynparza$246 $196 $721 $519 
Alliance revenue - Koselugo6 3 20 3 
Total alliance revenue$252 $199 $741 $522 
Cost of sales (1)
42 41 125 205 
Selling, general and administrative44 40 127 112 
Research and development27 20 87 93 
($ in millions)September 30, 2021December 31, 2020
Receivables from AstraZeneca included in Other current assets
$248 $215 
Payables to AstraZeneca included in Accrued and other current liabilities (2)
415 423 
(1) Represents amortization of capitalized milestone payments.
(2) Includes accrued milestone payments.
Eisai
In 2018, Merck and Eisai Co., Ltd. (Eisai) announced a strategic collaboration for the worldwide co-development and co-commercialization of Lenvima (lenvatinib), an orally available tyrosine kinase inhibitor discovered by Eisai. Under the agreement, Merck and Eisai will develop and commercialize Lenvima jointly, both as monotherapy and in combination with Keytruda. Eisai records Lenvima product sales globally (Eisai is the principal on Lenvima sales transactions), and Merck and Eisai share applicable profits equally. Merck records its share of Lenvima product sales, net of cost of sales and commercialization costs, as alliance revenue. Expenses incurred during co-development are shared by the two companies in accordance with the collaboration agreement and reflected in Research and development expenses. Certain expenses incurred solely by Merck or Eisai are not shareable under the collaboration agreement, including costs incurred in excess of agreed upon caps and costs related to certain combination studies of Keytruda and Lenvima.
Under the agreement, Merck made an upfront payment to Eisai and also made payments over a multi-year period for certain options rights (of which the final $125 million option payment was made in March 2021). In addition, the agreement provides for additional contingent payments from Merck to Eisai related to the successful achievement of sales-based and regulatory milestones. Merck made sales-based milestone payments of $200 million to Eisai in the first nine months of 2021. As of September 30, 2021, sales-based milestone payments accrued but not yet paid totaled $600 million. Potential future sales-based milestone payments of $2.6 billion have not yet been accrued as they are not deemed by the Company to be probable at this time. In the third quarter of 2021, Lenvima received a regulatory approval triggering a capitalized milestone payment of $75 million from Merck to Eisai. Potential future regulatory milestone payments of $50 million remain under the agreement.
The intangible asset balance related to Lenvima (which includes capitalized sales-based and regulatory milestone payments) was $1.0 billion at September 30, 2021 and is included in Other Intangibles, Net. The amount is being amortized over its estimated useful life through 2026 as supported by projected future cash flows, subject to impairment testing.
Summarized financial information related to this collaboration is as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Alliance revenue - Lenvima$188 $142 $498 $421 
Cost of sales (1)
49 46 143 215 
Selling, general and administrative34 18 88 48 
Research and development43 48 165 168 
($ in millions)September 30, 2021December 31, 2020
Receivables from Eisai included in Other current assets
$223 $157 
Payables to Eisai included in Accrued and other current liabilities (2)
600 335 
Payables to Eisai included in Other Noncurrent Liabilities (3)
— 600 
(1) Represents amortization of capitalized milestone payments.
(2) Includes accrued milestone and future option payments.
(3) Includes accrued milestone payments.
Bayer AG
In 2014, the Company entered into a worldwide clinical development collaboration with Bayer AG (Bayer) to market and develop soluble guanylate cyclase (sGC) modulators including Bayer’s Adempas (riociguat). The two companies have implemented a joint development and commercialization strategy. The collaboration also includes development of Bayer’s Verquvo (vericiguat), which was approved in the U.S. in January 2021, in Japan in June 2021 and in the EU in July 2021. Under the agreement, Bayer commercializes Adempas in the Americas, while Merck commercializes in the rest of the world. For Verquvo, Merck commercializes in the U.S. and Bayer commercializes in the rest of the world. Both companies share in development costs and profits on sales. Merck records sales of Adempas and Verquvo in its marketing territories, as well as alliance revenue. Alliance revenue represents Merck’s share of profits from sales in Bayer’s marketing territories, which are product sales net of cost of sales and commercialization costs. Cost of sales includes Bayer’s share of profits from sales in Merck’s marketing territories.
In addition, the agreement provides for contingent payments from Merck to Bayer related to the successful achievement of sales-based milestones. In the first quarter of 2021, following the approval of Verquvo noted above, Merck determined it was probable that sales of Adempas and Verquvo in the future would trigger the remaining $400 million sales-based milestone payment that was outstanding under this agreement. Accordingly, Merck recorded a liability of $400 million and a corresponding increase to the intangible assets related to this collaboration. Merck also recognized $153 million of cumulative amortization expense related to the recognition of this milestone in the first nine months of 2021.
The intangible asset balance related to Adempas (which includes the acquired intangible asset balance, as well as capitalized sales-based milestone payments attributed to Adempas) was $869 million at September 30, 2021 and is being amortized over its estimated useful life through 2027 as supported by projected future cash flows, subject to impairment testing. The intangible asset balance related to Verquvo (which reflects the portion of the final sales-based milestone payment that was attributed to Verquvo) was $72 million at September 30, 2021 and is being amortized over its estimated useful life through 2031 as supported by projected future cash flows, subject to impairment testing.
Summarized financial information related to this collaboration is as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Alliance revenue - Adempas/Verquvo$100 $83 $248 $216 
Net sales of Adempas recorded by Merck59 55 188 167 
Net sales of Verquvo recorded by Merck2 — 3 — 
Total sales$161 $138 $439 $383 
Cost of sales (1)
53 81 328 229 
Selling, general and administrative31 12 84 32 
Research and development16 12 36 53 
($ in millions)September 30, 2021December 31, 2020
Receivables from Bayer included in Other current assets
$139 $65 
Payables to Bayer included in Accrued and other current liabilities (2)
467 — 
(1) Includes amortization of intangible assets. Amount in the first nine months of 2021 includes $153 million of cumulative amortization as noted above. In addition, cost of sales in all periods now includes Bayer’s share of profits from sales in Merck’s marketing territories.
(2) Includes accrued milestone payment.
v3.21.2
Restructuring
 9 Months Ended
Sep. 30, 2021
Restructuring and Related Activities [Abstract]  
Restructuring Restructuring
In 2019, Merck approved a new global restructuring program (Restructuring Program) as part of a worldwide initiative focused on further optimizing the Company’s manufacturing and supply network, as well as reducing its global real estate footprint. This program is a continuation of the Company’s plant rationalization, builds on prior restructuring programs and does not include any actions associated with the spin-off of Organon. As the Company continues to evaluate its global footprint and overall operating model, it subsequently identified additional actions under the Restructuring Program, and could identify further actions over time. The actions currently contemplated under the Restructuring Program are expected to be substantially completed by the end of 2023, with the cumulative pretax costs to be incurred by the Company to implement the program estimated to be approximately $3.0 billion. The Company estimates that approximately 70% of the cumulative pretax costs will result in cash outlays, primarily related to employee separation expense and facility shut-down costs. Approximately 30% of the cumulative pretax costs will be non-cash, relating primarily to the accelerated depreciation of facilities to be closed or divested.
The Company recorded total pretax costs of $168 million and $185 million in the third quarter of 2021 and 2020, respectively, and $630 million and $500 million for the first nine months of 2021 and 2020, respectively, related to restructuring program activities. Since inception of the Restructuring Program through September 30, 2021, Merck has recorded total pretax accumulated costs of approximately $2.4 billion. For the full year of 2021, the Company expects to record charges of approximately $700 million related to the Restructuring Program. For segment reporting, restructuring charges are unallocated expenses.
The following tables summarize the charges related to restructuring program activities by type of cost:
 Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
($ in millions)Separation
Costs		Accelerated
Depreciation		OtherTotalSeparation
Costs		Accelerated
Depreciation		OtherTotal
Cost of sales$— $11 $37 $48 $— $32 $81 $113 
Selling, general and administrative— 4 1 5 — 8 1 9 
Research and development— 7 1 8 — 20 1 21 
Restructuring costs17 — 90 107 310 — 177 487 
$17 $22 $129 $168 $310 $60 $260 $630 
 Three Months Ended September 30, 2020Nine Months Ended September 30, 2020
($ in millions)Separation
Costs		Accelerated
Depreciation		OtherTotalSeparation
Costs		Accelerated
Depreciation		OtherTotal
Cost of sales$— $33 $5 $38 $— $89 $42 $131 
Selling, general and administrative— 15 — 15 — 37 — 37 
Research and development— 18 1 19 — 66 1 67 
Restructuring costs61 — 52 113 143 — 122 265 
$61 $66 $58 $185 $143 $192 $165 $500 
Separation costs are associated with actual headcount reductions, as well as those headcount reductions which were probable and could be reasonably estimated.
Accelerated depreciation costs primarily relate to manufacturing, research and administrative facilities and equipment to be sold or closed as part of the programs. Accelerated depreciation costs represent the difference between the depreciation expense to be recognized over the revised useful life of the asset, based upon the anticipated date the site will be closed or divested or the equipment disposed of, and depreciation expense as determined utilizing the useful life prior to the restructuring actions. All the sites have and will continue to operate up through the respective closure dates and, since future undiscounted cash flows are sufficient to recover the respective book values, Merck is recording accelerated depreciation over the revised useful life of the site assets. Anticipated site closure dates, particularly related to manufacturing locations, have been and may continue to be adjusted to reflect changes resulting from regulatory or other factors.
Other activity in 2021 and 2020 includes asset abandonment, facility shut-down and other related costs, as well as pretax gains and losses resulting from the sales of facilities and related assets. Additionally, other activity includes certain employee-related costs associated with pension and other postretirement benefit plans (see Note 11) and share-based compensation.
The following table summarizes the charges and spending relating to restructuring program activities for the nine months ended September 30, 2021:
($ in millions)Separation
Costs		Accelerated
Depreciation		OtherTotal
Restructuring reserves January 1, 2021
$567 $— $19 $586 
Expense310 60 260 630 
(Payments) receipts, net(305)— (155)(460)
Non-cash activity— (60)(84)(144)
Restructuring reserves September 30, 2021 (1)
$572 $— $40 $612 
(1)The remaining cash outlays are expected to be substantially completed by the end of 2023.
v3.21.2
Financial Instruments
 9 Months Ended
Sep. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments Financial Instruments
Derivative Instruments and Hedging Activities
The Company manages the impact of foreign exchange rate movements and interest rate movements on its earnings, cash flows and fair values of assets and liabilities through operational means and through the use of various financial instruments, including derivative instruments.
A significant portion of the Company’s revenues and earnings in foreign affiliates is exposed to changes in foreign exchange rates. The objectives and accounting related to the Company’s foreign currency risk management program, as well as its interest rate risk management activities are discussed below.
Foreign Currency Risk Management
The Company has established revenue hedging, balance sheet risk management and net investment hedging programs to protect against volatility of future foreign currency cash flows and changes in fair value caused by changes in foreign exchange rates.
The objective of the revenue hedging program is to reduce the variability caused by changes in foreign exchange rates that would affect the U.S. dollar value of future cash flows derived from foreign currency denominated sales, primarily the euro, Japanese yen and Chinese renminbi. To achieve this objective, the Company will hedge a portion of its forecasted foreign currency denominated third-party and intercompany distributor entity sales (forecasted sales) that are expected to occur over its planning cycle, typically no more than two years into the future. The Company will layer in hedges over time, increasing the portion of forecasted sales hedged as it gets closer to the expected date of the forecasted sales. The portion of forecasted sales hedged is based on assessments of cost-benefit profiles that consider natural offsetting exposures, revenue and exchange rate volatilities and correlations, and the cost of hedging instruments. The Company manages its anticipated transaction exposure principally with purchased local currency put options, forward contracts and purchased collar options.
The fair values of these derivative contracts are recorded as either assets (gain positions) or liabilities (loss positions) in the Condensed Consolidated Balance Sheet. Changes in the fair value of derivative contracts are recorded each period in either current earnings or Other comprehensive income (OCI), depending on whether the derivative is designated as part of a hedge transaction and, if so, the type of hedge transaction. For derivatives that are designated as cash flow hedges, the unrealized gains or losses on these contracts are recorded in AOCL and reclassified into Sales when the hedged anticipated revenue is recognized. For those derivatives which are not designated as cash flow hedges, but serve as economic hedges of forecasted sales, unrealized gains or losses are recorded in Sales each period. The cash flows from both designated and non-
designated contracts are reported as operating activities in the Condensed Consolidated Statement of Cash Flows. The Company does not enter into derivatives for trading or speculative purposes.
The Company manages operating activities and net asset positions at each local subsidiary in order to mitigate the effects of exchange on monetary assets and liabilities. The Company also uses a balance sheet risk management program to mitigate the exposure of net monetary assets that are denominated in a currency other than a subsidiary’s functional currency from the effects of volatility in foreign exchange. In these instances, Merck principally utilizes forward exchange contracts to offset the effects of exchange on exposures denominated in developed country currencies, primarily the euro and Japanese yen. For exposures in developing country currencies, the Company will enter into forward contracts to partially offset the effects of exchange on exposures when it is deemed economical to do so based on a cost-benefit analysis that considers the magnitude of the exposure, the volatility of the exchange rate and the cost of the hedging instrument. The cash flows from these contracts are reported as operating activities in the Condensed Consolidated Statement of Cash Flows.
Monetary assets and liabilities denominated in a currency other than the functional currency of a given subsidiary are remeasured at spot rates in effect on the balance sheet date with the effects of changes in spot rates reported in Other (income) expense, net. The forward contracts are not designated as hedges and are marked to market through Other (income) expense, net. Accordingly, fair value changes in the forward contracts help mitigate the changes in the value of the remeasured assets and liabilities attributable to changes in foreign currency exchange rates, except to the extent of the spot-forward differences. These differences are not significant due to the short-term nature of the contracts, which typically have average maturities at inception of less than one year.
The Company also uses forward exchange contracts to hedge a portion of its net investment in foreign operations against movements in exchange rates. The forward contracts are designated as hedges of the net investment in a foreign operation. The unrealized gains or losses on these contracts are recorded in foreign currency translation adjustment within OCI and remain in AOCL until either the sale or complete or substantially complete liquidation of the subsidiary. The Company excludes certain portions of the change in fair value of its derivative instruments from the assessment of hedge effectiveness (excluded components). Changes in fair value of the excluded components are recognized in OCI. The Company recognizes in earnings the initial value of the excluded components on a straight-line basis over the life of the derivative instrument, rather than using the mark-to-market approach. The cash flows from these contracts are reported as investing activities in the Condensed Consolidated Statement of Cash Flows.
Foreign exchange risk is also managed through the use of foreign currency debt. The Company’s senior unsecured euro-denominated notes have been designated as, and are effective as, economic hedges of the net investment in a foreign operation. Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on the euro-denominated debt instruments are included in foreign currency translation adjustment within OCI.
The effects of the Company’s net investment hedges on OCI and the Consolidated Statement of Income are shown below:
Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income (1)
Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
($ in millions)20212020202120202021202020212020
Net Investment Hedging Relationships
Foreign exchange contracts
$1 $10 $(27)$15 $(4)$(4)$(12)$(15)
Euro-denominated notes(77)162 (199)182 — — — — 
(1) No amounts were reclassified from AOCL into income related to the sale of a subsidiary.
Interest Rate Risk Management
The Company may use interest rate swap contracts on certain investing and borrowing transactions to manage its net exposure to interest rate changes and to reduce its overall cost of borrowing. The Company does not use leveraged swaps and, in general, does not leverage any of its investment activities that would put principal capital at risk.
In January 2021, five interest rate swaps with a total notional amount of $1.15 billion matured. These swaps effectively converted the Company’s $1.15 billion, 3.875% fixed-rate notes due 2021 to variable rate debt. At September 30, 2021, the Company was a party to nine pay-floating, receive-fixed interest rate swap contracts designated as fair value hedges of fixed-rate notes in which the notional amounts match the amount of the hedged fixed-rate notes as detailed in the table below.
September 30, 2021
($ in millions)Par Value of DebtNumber of Interest Rate Swaps HeldTotal Swap Notional Amount
2.40% notes due 2022
$1,000 4 $1,000 
2.35% notes due 2022
1,250 5 1,250 
The interest rate swap contracts are designated hedges of the fair value changes in the notes attributable to changes in the benchmark LIBOR swap rate. The fair value changes in the notes attributable to changes in the LIBOR swap rate are recorded in interest expense along with the offsetting fair value changes in the swap contracts. The cash flows from these contracts are reported as operating activities in the Condensed Consolidated Statement of Cash Flows.
The table below presents the location of amounts recorded on the Condensed Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges:
Carrying Amount of Hedged LiabilitiesCumulative Amount of Fair Value Hedging Adjustment Increase (Decrease) Included in the Carrying Amount
($ in millions)September 30, 2021December 31, 2020September 30, 2021December 31, 2020
Loans payable and current portion of long-term debt$2,274 $1,150 $25 $— 
Long-Term Debt— 2,301 — 53 
Presented in the table below is the fair value of derivatives on a gross basis segregated between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
  September 30, 2021December 31, 2020
  Fair Value of DerivativeU.S. Dollar
Notional		Fair Value of DerivativeU.S. Dollar
Notional
($ in millions)AssetLiabilityAssetLiability
Derivatives Designated as Hedging Instruments
Balance Sheet Caption
Interest rate swap contractsOther current assets$26 $— $2,250 $1 $— $1,150 
Interest rate swap contractsOther Assets— — — 54 — 2,250 
Foreign exchange contractsOther current assets224 — 7,138 12 — 3,183 
Foreign exchange contractsOther Assets45 — 1,469 45 — 2,030 
Foreign exchange contractsAccrued and other current liabilities— 15 1,601 — 217 5,049 
Foreign exchange contractsOther Noncurrent Liabilities— 1 145 — 1 52 
  $295 $16 $12,603 $112 $218 $13,714 
Derivatives Not Designated as Hedging Instruments
Balance Sheet Caption      
Foreign exchange contractsOther current assets$82 $— $6,333 $70 $— $7,260 
Foreign exchange contractsAccrued and other current liabilities— 117 9,522 — 307 11,810 
  $82 $117 $15,855 $70 $307 $19,070 
  $377 $133 $28,458 $182 $525 $32,784 
As noted above, the Company records its derivatives on a gross basis in the Condensed Consolidated Balance Sheet. The Company has master netting agreements with several of its financial institution counterparties (see Concentrations of Credit Risk below). The following table provides information on the Company’s derivative positions subject to these master netting arrangements as if they were presented on a net basis, allowing for the right of offset by counterparty and cash collateral exchanged per the master agreements and related credit support annexes:
 September 30, 2021December 31, 2020
($ in millions)AssetLiabilityAssetLiability
Gross amounts recognized in the condensed consolidated balance sheet$377 $133 $182 $525 
Gross amounts subject to offset in master netting arrangements not offset in the condensed consolidated balance sheet
(120)(120)(156)(156)
Cash collateral received/posted(65)— — (36)
Net amounts$192 $13 $26 $333 
The table below provides information regarding the location and amount of pretax (gains) losses of derivatives designated in fair value or cash flow hedging relationships (including amounts attributable to discontinued operations):
Sales
Other (income) expense, net (1)
Other comprehensive income (loss)Sales
Other (income) expense, net (1)
Other comprehensive income (loss)
Three Months Ended September 30,Three Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,Nine Months Ended September 30,Nine Months Ended September 30,
($ in millions)202120202021202020212020202120202021202020212020
Financial Statement Line Items in which Effects of Fair Value or Cash Flow Hedges are Recorded$13,154 $10,929 $(450)$(312)$38 $10 $35,183 $30,570 $(1,007)$(637)$1,595 $(190)
(Gain) loss on fair value hedging relationships
Interest rate swap contracts
Hedged items
— — (9)(14)— — — — (29)54 — — 
Derivatives designated as hedging instruments
— — (1)— — — — — (1)(76)— — 
Impact of cash flow hedging relationships
Foreign exchange contracts
Amount of gain (loss) recognized in OCI on derivatives
— — — — 72 (195)— — — — 193 (126)
(Decrease) increase in Sales as a result of AOCL reclassifications
(36)(23)— — 36 23 (219)65 — — 219 (65)
Interest rate contracts
Amount of gain recognized in Other (income) expense, net on derivatives
— — — (1)— — — — (2)(3)— — 
Amount of loss recognized in OCI on derivatives
— — — — — (1)— — — — (2)(3)
(1) Interest expense is a component of Other (income) expense, net.
The table below provides information regarding the income statement effects of derivatives not designated as hedging instruments (including amounts attributable to discontinued operations):
Amount of Derivative Pretax (Gain) Loss Recognized in Income
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Derivatives Not Designated as Hedging InstrumentsIncome Statement Caption
Foreign exchange contracts (1)
Other (income) expense, net$18 $(7)$234 $(138)
Foreign exchange contracts (2)
Sales(4)7 6 4 
Interest rate contracts (3)
Other (income) expense, net— — — 9 
Forward contract related to Seagen common stockResearch and development— 22 — 22 
(1) These derivative contracts primarily mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates. Amount in the first nine months of 2021 includes a loss on forward exchange contracts entered into in conjunction with the spin-off of Organon.
(2) These derivative contracts serve as economic hedges of forecasted transactions.
(3) These derivative contracts serve as economic hedges against rising treasury rates.
At September 30, 2021, the Company estimates $55 million of pretax net unrealized gains on derivatives maturing within the next 12 months that hedge foreign currency denominated sales over that same period will be reclassified from AOCL to Sales. The amount ultimately reclassified to Sales may differ as foreign exchange rates change. Realized gains and losses are ultimately determined by actual exchange rates at maturity.
Investments in Debt and Equity Securities
Information on investments in debt and equity securities is as follows:
 September 30, 2021December 31, 2020
 Amortized
Cost		Gross UnrealizedFair
Value		Amortized
Cost		Gross UnrealizedFair
Value
($ in millions)GainsLossesGainsLosses
U.S. government and agency securities$83 $— $— $83 $84 $— $— $84 
Corporate notes and bonds4 — — 4 — — — — 
Foreign government bonds2 — — 2 5 — — 5 
Total debt securities$89 $— $— $89 $89 $— $— $89 
Publicly traded equity securities (1)
1,915 1,787 
Total debt and publicly traded equity securities
$2,004 $1,876 
(1) Unrealized net gains of $90 million and unrealized net losses of $109 million were recorded in Other (income) expense, net on equity securities still held at September 30, 2021 in the third quarter and first nine months of 2021, respectively. Unrealized net gains recorded in Other (income) expense, net on equity securities still held at September 30, 2020 were $43 million and $512 million in the third quarter and first nine months of 2020, respectively.
At September 30, 2021 and September 30, 2020, the Company also had $578 million and $508 million, respectively, of equity investments without readily determinable fair values included in Other Assets. The Company recognizes unrealized gains on these equity investments based on favorable observable price changes from transactions involving similar investments of the same investee and recognizes unrealized losses based on unfavorable observable price changes. During the first nine months of 2021, the Company recorded unrealized gains of $104 million and unrealized losses of $1 million in Other (income) expense, net related to these equity investments held at September 30, 2021. During the first nine months of 2020, the Company recorded unrealized gains of $21 million and unrealized losses of $3 million in Other (income) expense, net related to these equity investments held at September 30, 2020. Cumulative unrealized gains and cumulative unrealized losses based on observable prices changes for investments in equity investments without readily determinable fair values still held at September 30, 2021 were $229 million and $7 million, respectively.
Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses a fair value hierarchy which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. There are three levels of inputs used to measure fair value with Level 1 having the highest priority and Level 3 having the lowest: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; Level 3 - Unobservable inputs that are supported by little or no market activity. Level 3 assets or liabilities are those whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques with significant unobservable inputs, as well as assets or liabilities for which the determination of fair value requires significant judgment or estimation. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
Fair Value Measurements UsingFair Value Measurements Using
 Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
($ in millions)September 30, 2021December 31, 2020
Assets
Investments
Foreign government bonds$— $2 $— $2 $— $5 $— $5 
Publicly traded equity securities433 — — 433 780 — — 780 
 433 2 — 435 780 5 — 785 
Other assets (1)
U.S. government and agency securities83 — — 83 84 — — 84 
Corporate notes and bonds4 — — 4 — — — — 
Publicly traded equity securities1,482 — — 1,482 1,007 — — 1,007 
1,569 — — 1,569 1,091 — — 1,091 
Derivative assets (2)
Forward exchange contracts— 230 — 230 — 90 — 90 
Purchased currency options— 121 — 121 — 37 — 37 
Interest rate swaps— 26 — 26 — 55 — 55 
 — 377 — 377 — 182 — 182 
Total assets$2,002 $379 $— $2,381 $1,871 $187 $— $2,058 
Liabilities
Other liabilities
Contingent consideration$— $— $902 $902 $— $— $841 $841 
Derivative liabilities (2)
Forward exchange contracts— 132 — 132 — 505 — 505 
Written currency options— 1 — 1 — 20 — 20 
— 133 — 133 — 525 — 525 
Total liabilities$— $133 $902 $1,035 $— $525 $841 $1,366 
(1) Investments included in other assets are restricted as to use, including for the payment of benefits under employee benefit plans.
(2)    The fair value determination of derivatives includes the impact of the credit risk of counterparties to the derivatives and the Company’s own credit risk, the effects of which were not significant.
As of September 30, 2021 and December 31, 2020, Cash and cash equivalents included $9.2 billion and $6.8 billion of cash equivalents, respectively (which would be considered Level 2 in the fair value hierarchy).
Contingent Consideration
Summarized information about the changes in the fair value of liabilities for contingent consideration associated with business acquisitions is as follows:
Nine Months Ended September 30,
($ in millions)20212020
January 1$841 $767 
Additions— 97 
Changes in estimated fair value (1)
73 71 
Payments— (106)
Other(12)— 
September 30 (2)(3)
$902 $829 
(1) Recorded in Cost of sales, Research and development expenses, and Other (income) expense, net. Includes cumulative translation adjustments.
(2) Balance at September 30, 2021 includes $289 million recorded as a current liability for amounts expected to be paid within the next 12 months.
(3) At September 30, 2021 and December 31, 2020, $747 million and $711 million, respectively, of the liabilities relate to the termination of the Sanofi Pasteur MSD joint venture in 2016. As part of the termination, Merck recorded a liability for contingent future royalty payments of 11.5% on net sales of all Merck products that were previously sold by the joint venture through December 31, 2024. The fair value of this liability is determined utilizing the estimated amount and timing of projected cash flows using a risk-adjusted discount rate of 8% to present value the cash flows.
The additions to contingent consideration in 2020 relate to the acquisition of Themis (see Note 3). The payments of contingent consideration in 2020 relate to liabilities recorded in connection with the termination of the Sanofi-Pasteur MSD joint venture in 2016.
Other Fair Value Measurements
Some of the Company’s financial instruments, such as cash and cash equivalents, receivables and payables, are reflected in the balance sheet at carrying value, which approximates fair value due to their short-term nature.
The estimated fair value of loans payable and long-term debt (including current portion) at September 30, 2021, was $29.1 billion compared with a carrying value of $26.4 billion and at December 31, 2020, was $36.0 billion compared with a carrying value of $31.8 billion. Fair value was estimated using recent observable market prices and would be considered Level 2 in the fair value hierarchy.
Concentrations of Credit Risk
On an ongoing basis, the Company monitors concentrations of credit risk associated with corporate and government issuers of securities and financial institutions with which it conducts business. Credit exposure limits are established to limit a concentration with any single issuer or institution. Cash and investments are placed in instruments that meet high credit quality standards as specified in the Company’s investment policy guidelines.
The majority of the Company’s accounts receivable arise from product sales in the U.S., Europe and China and are primarily due from drug wholesalers and retailers, hospitals, government agencies, managed health care providers and pharmacy benefit managers. The Company monitors the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in their credit profile. The Company also continues to monitor global economic conditions, including the volatility associated with international sovereign economies, and associated impacts on the financial markets and its business.
The Company has accounts receivable factoring agreements with financial institutions in certain countries to sell accounts receivable. The Company factored $2.4 billion and $2.1 billion of accounts receivable at September 30, 2021 and December 31, 2020, respectively, under these factoring arrangements, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within operating activities in the Consolidated Statement of Cash Flows. In certain of these factoring arrangements, for ease of administration, the Company will collect customer payments related to the factored receivables, which it then remits to the financial institutions. The net cash flows relating to these collections are reported as financing activities in the Consolidated Statement of Cash Flows. The cost of factoring such accounts receivable was de minimis.
Derivative financial instruments are executed under International Swaps and Derivatives Association master agreements. The master agreements with several of the Company’s financial institution counterparties also include credit support annexes. These annexes contain provisions that require collateral to be exchanged depending on the value of the derivative assets and liabilities, the Company’s credit rating, and the credit rating of the counterparty. Cash collateral received by the Company from various counterparties was $65 million at September 30, 2021. The obligation to return such collateral is recorded in Accrued and other current liabilities. Cash collateral advanced by the Company to counterparties was $36 million at December 31, 2020.
v3.21.2
Inventories
 9 Months Ended
Sep. 30, 2021
Inventory Disclosure [Abstract]  
Inventories Inventories
Inventories consisted of:
($ in millions)September 30, 2021December 31, 2020
Finished goods$1,628 $1,610 
Raw materials and work in process6,135 5,949 
Supplies190 146 
Total (approximates current cost)7,953 7,705 
Increase (decrease) to LIFO cost23 (81)
 $7,976 $7,624 
Recognized as:
Inventories$5,603 $5,554 
Other assets2,373 2,070 
Amounts recognized as Other Assets are comprised almost entirely of raw materials and work in process inventories. At September 30, 2021 and December 31, 2020, these amounts included $1.9 billion and $1.8 billion, respectively, of inventories not expected to be sold within one year. In addition, these amounts included $519 million and $279 million at September 30, 2021 and December 31, 2020, respectively, of inventories produced in preparation for product launches.
v3.21.2
Goodwill and Intangibles
 9 Months Ended
Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangibles Goodwill and IntangiblesIn connection with the spin-off of Organon (see Note 2), goodwill was reduced by $1.4 billion. Additionally, other intangibles, on a net basis, were reduced by $519 million, including products and products rights of $394 million and licenses of $125 million.
v3.21.2
Contingencies
 9 Months Ended
Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract]  
Contingencies Contingencies
The Company is involved in various claims and legal proceedings of a nature considered normal to its business, including product liability, intellectual property, and commercial litigation, as well as certain additional matters including governmental and environmental matters. In the opinion of the Company, it is unlikely that the resolution of these matters will be material to the Company’s financial condition, results of operations or cash flows.
Given the nature of the litigation discussed below and the complexities involved in these matters, the Company is unable to reasonably estimate a possible loss or range of possible loss for such matters until the Company knows, among other factors, (i) what claims, if any, will survive dispositive motion practice, (ii) the extent of the claims, including the size of any potential class, particularly when damages are not specified or are indeterminate, (iii) how the discovery process will affect the litigation, (iv) the settlement posture of the other parties to the litigation and (v) any other factors that may have a material effect on the litigation.
The Company records accruals for contingencies when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available. For product liability claims, a portion of the overall accrual is actuarially determined and considers such factors as past experience, number of claims reported and estimates of claims incurred but not yet reported. Individually significant contingent losses are accrued when probable and reasonably estimable. Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable.
The Company’s decision to obtain insurance coverage is dependent on market conditions, including cost and availability, existing at the time such decisions are made. The Company has evaluated its risks and has determined that the cost of obtaining product liability insurance outweighs the likely benefits of the coverage that is available and, as such, has no insurance for most product liabilities.
Product Liability Litigation
Fosamax
As previously disclosed, Merck is a defendant in product liability lawsuits in the U.S. involving Fosamax (Fosamax Litigation). As of September 30, 2021, approximately 3,470 cases are pending against Merck in either a federal multidistrict litigation (Femur Fracture MDL) or state court. Plaintiffs in the vast majority of these cases generally allege that they sustained femur fractures and/or other bone injuries (Femur Fractures) in association with the use of Fosamax.
In March 2014, the Femur Fracture MDL court dismissed with prejudice approximately 650 cases on preemption grounds. Plaintiffs in approximately 515 of those cases appealed that decision to the U.S. Court of Appeals for the Third Circuit (Third Circuit). In March 2017, the Third Circuit issued a decision reversing the Femur Fracture MDL court’s preemption ruling and remanding the appealed cases back to the Femur Fracture MDL court. In May 2019, the U.S. Supreme Court decided that the Third Circuit had incorrectly concluded that the issue of preemption should be resolved by a jury, and accordingly vacated the judgment of the Third Circuit and remanded the proceedings back to the Third Circuit to address the issue in a manner consistent with the Supreme Court’s opinion. In November 2019, the Third Circuit remanded the cases back to the District Court in order to allow that court to determine in the first instance whether the plaintiffs’ state law claims are preempted by federal law under the standards described by the Supreme Court in its opinion. Briefing on the issue is closed, and the parties await the decision of the District Court.
Discovery is presently stayed in the Femur Fracture MDL and in the state court in California. As part of the spin-off of Organon, Organon is required to indemnify Merck for all liabilities relating to, arising from, or resulting from the Fosamax Litigation.
Januvia/Janumet
As previously disclosed, Merck is a defendant in product liability lawsuits in the U.S. involving Januvia and/or Janumet. As of September 30, 2021, Merck is aware of approximately 730 product users alleging that Januvia and/or Janumet caused the development of pancreatic cancer and other injuries.
Most claims have been filed in multidistrict litigation before the U.S. District Court for the Southern District of California (MDL). On March 9, 2021, the MDL Court issued an omnibus order granting defendants’ summary judgment motions based on preemption and failure to establish general causation, as well as granting defendants’ motions to exclude
plaintiffs’ expert witnesses. The plaintiffs appealed that order. Since that time, more than half of these claims have been dismissed with prejudice as to Merck, and on October 5, 2021, the U.S. Court of Appeals for the Ninth Circuit dismissed the appeal as to Merck and two of its codefendants.
Outside of the MDL, the majority of claims have been filed in coordinated proceedings before the Superior Court of California, County of Los Angeles (California State Court). On April 6, 2021, the court in California issued an omnibus order granting defendants’ summary judgment motions and also granting defendants’ motions to exclude plaintiffs’ expert witnesses.
As of September 30, 2021, six product users have claims pending against Merck in state courts other than California, including Illinois. In June 2017, the Illinois trial court denied Merck’s motion for summary judgment based on federal preemption. Merck appealed, and the Illinois appellate court affirmed in December 2018. Merck filed a petition for leave to appeal to the Illinois Supreme Court in February 2019. In April 2019, the Illinois Supreme Court stayed consideration of the pending petition to appeal until the U.S. Supreme Court issued its opinion in Merck Sharp & Dohme Corp. v. Albrecht (relating to the Fosamax matter discussed above). Merck filed the opinion in Albrecht with the Illinois Supreme Court in June 2019. The petition for leave to appeal was decided in September 2019, in which the Illinois Supreme Court directed the intermediate appellate court to reconsider its earlier ruling. The Illinois Appellate Court issued a favorable decision concluding, consistent with Albrecht, that preemption presents a legal question to be resolved by the court. In May 2020, the Illinois Appellate Court issued a mandate to the state trial court, which, as of September 30, 2021, had not scheduled a case management conference or otherwise taken action.
In addition to the claims noted above, the Company has agreed to toll the statute of limitations for approximately 50 additional claims. The Company intends to continue defending against any remaining lawsuits.
Governmental Proceedings
As previously disclosed, the Company’s subsidiaries in China have received and may continue to receive inquiries regarding their operations from various Chinese governmental agencies. Some of these inquiries may be related to matters involving other multinational pharmaceutical companies, as well as Chinese entities doing business with such companies. The Company’s policy is to cooperate with these authorities and to provide responses as appropriate.
As previously disclosed, from time to time, the Company receives inquiries and is the subject of preliminary investigation activities from competition and other governmental authorities in markets outside the U.S. These authorities may include regulators, administrative authorities, and law enforcement and other similar officials, and these preliminary investigation activities may include site visits, formal or informal requests or demands for documents or materials, inquiries or interviews and similar matters. Certain of these preliminary inquiries or activities may lead to the commencement of formal proceedings. Should those proceedings be determined adversely to the Company, monetary fines and/or remedial undertakings may be required.
Commercial and Other Litigation
Zetia Antitrust Litigation
As previously disclosed, Merck, MSD, Schering Corporation, Schering-Plough Corporation, and MSP Singapore Company LLC (collectively, the Merck Defendants) are defendants in putative class action and opt-out lawsuits filed in 2018 on behalf of direct and indirect purchasers of Zetia alleging violations of federal and state antitrust laws, as well as other state statutory and common law causes of action. The cases have been consolidated for pretrial purposes in a federal multidistrict litigation before Judge Rebecca Beach Smith in the Eastern District of Virginia. In December 2018, the court denied the Merck Defendants’ motions to dismiss or stay the direct purchaser putative class actions pending bilateral arbitration. In August 2019, the district court adopted in full the report and recommendation of the magistrate judge with respect to the Merck Defendants’ motions to dismiss on non-arbitration issues, thereby granting in part and denying in part Merck Defendants’ motions to dismiss. In addition, in June 2019, the representatives of the putative direct purchaser class filed an amended complaint, and in August 2019, retailer opt-out plaintiffs filed an amended complaint. In December 2019, the district court granted the Merck Defendants’ motion to dismiss to the extent the motion sought dismissal of claims for overcharges paid by entities that purchased generic ezetimibe from Par Pharmaceutical, Inc. (Par Pharmaceutical) and dismissed any claims for such overcharges. In November 2019, the direct purchaser plaintiffs and the indirect purchaser plaintiffs filed motions for class certification. In August 2020, the district court granted in part the direct purchasers’ motion for class certification and certified a class of 35 direct purchasers and, in November 2020, the U.S. Court of Appeals for the Fourth Circuit granted the Merck Defendants’ motion for permission to appeal the district court’s order. In August 2021, the Fourth Circuit vacated the district court’s class certification order and remanded for further proceedings consistent with the court’s ruling. In September 2021, the direct purchaser plaintiffs filed a renewed motion for class certification and briefing regarding that motion is pending.
In August 2020, the Merck Defendants filed a motion for summary judgment and other motions, and plaintiffs filed a motion for partial summary judgment, and other motions. Those motions are now fully briefed, and the court has heard
argument on certain of the motions. The court may hold additional hearings on the other motions. Trial in this matter has been adjourned.
Also in August 2020, the magistrate judge recommended that the court grant the motion for class certification filed by the putative indirect purchaser class. The Merck Defendants objected to this report and recommendation. In August 2021, the district court overruled the Merck Defendants’ objections to the report and recommendation and granted certification of a class of indirect purchasers. In September 2021, the Merck Defendants petitioned to appeal the class certification decision to the Fourth Circuit. The Fourth Circuit denied that petition on September 30, 2021.
In September 2020, United Healthcare Services, Inc. filed a lawsuit in the U.S. District Court for the District of Minnesota against the Merck Defendants and others (the UHC Action). The UHC Action makes similar allegations as those made in the Zetia class action. In September 2020, the U.S. Judicial Panel on Multidistrict Litigation transferred the case to the Eastern District of Virginia to proceed with the multidistrict Zetia litigation already in progress. Defendants have filed a motion to dismiss.
In December 2020, Humana Inc. filed a lawsuit in the Superior Court of the State of California, County of San Francisco, against Merck and others, alleging defendants violated state antitrust laws in multiple states. Also, in December 2020, Centene Corporation and others filed a lawsuit in the Superior Court of the State of California, County of San Francisco, against the same defendants as Humana. Both lawsuits allege similar anticompetitive acts to those alleged in the Zetia class action. In July 2021, the California Court ruled on defendants’ Motion to Quash for lack of personal jurisdiction, granting the motion as to the out-of-state claims against defendants, and ordering limited jurisdictional discovery with regard to the California claims. In September 2021, the parties reached an agreement that Humana and Centene would file their claims in New Jersey federal court, seek a transfer of those claims to the multidistrict Zetia litigation already in progress, and subsequently dismiss the actions previously filed in California. The parties jointly sought a stay of the Superior Court action, pending filing of the federal action. The Superior Court granted the stay on September 17, 2021.
Also, on July 16, 2021, Humana and Centene filed actions against the Merck Defendants in New Jersey in the Bergen County Superior Court, re-asserting the claims that were dismissed in their California action. Those complaints have not yet been served, and Humana and Centene have agreed to dismiss those actions once they have filed their complaints in New Jersey federal court.
In June 2021, Kaiser Foundation Health Plan, Inc. similarly filed a lawsuit in the Superior Court of the State of California, County of San Francisco, against the same defendants as Humana and Centene. The Kaiser lawsuit alleges similar anticompetitive acts to those alleged in the Zetia class action. The Kaiser action was removed to the U.S. District Court for the Northern District of California on July 16, 2021. In September 2021, the U.S. Judicial Panel on Multidistrict Litigation transferred the case to the Eastern District of Virginia to proceed with the multidistrict Zetia litigation already in progress.
Patent Litigation
From time to time, generic manufacturers of pharmaceutical products file abbreviated New Drug Applications (NDAs) with the FDA seeking to market generic forms of the Company’s products prior to the expiration of relevant patents owned by the Company. To protect its patent rights, the Company may file patent infringement lawsuits against such generic companies. Similar lawsuits defending the Company’s patent rights may exist in other countries. The Company intends to vigorously defend its patents, which it believes are valid, against infringement by companies attempting to market products prior to the expiration of such patents. As with any litigation, there can be no assurance of the outcomes, which, if adverse, could result in significantly shortened periods of exclusivity for these products and, with respect to products acquired through acquisitions, potentially significant intangible asset impairment charges.
Bridion — Between January and November 2020, the Company received multiple Paragraph IV Certification Letters under the Hatch-Waxman Act notifying the Company that generic drug companies have filed applications to the FDA seeking pre-patent expiry approval to sell generic versions of Bridion (sugammadex) Injection. In March, April and December 2020, the Company filed patent infringement lawsuits in the U.S. District Courts for the District of New Jersey and the Northern District of West Virginia against those generic companies. All actions in the District of New Jersey have been consolidated. These lawsuits, which assert one or more patents covering sugammadex and methods of using sugammadex, automatically stay FDA approval of the generic applications until June 2023 or until adverse court decisions, if any, whichever may occur earlier.
Mylan Pharmaceuticals Inc., Mylan API US LLC, and Mylan Inc. (Mylan) have filed motions to dismiss in the District of New Jersey for lack of venue and failure to state a claim against certain defendants, and in the Northern District of West Virginia for failure to state a claim against certain defendants. The New Jersey motion has not yet been decided, and the West Virginia action is stayed pending resolution of the New Jersey motion.
The Company has settled with three generic companies providing that these generic companies can bring their generic versions of Bridion to the market in January 2026 (which may be delayed by any applicable pediatric exclusivity) or earlier under certain circumstances.
Januvia, Janumet, Janumet XR — As previously disclosed, the FDA has granted pediatric exclusivity with respect to Januvia, Janumet, and Janumet XR, which provides a further six months of exclusivity in the U.S. beyond the expiration of all patents listed in the FDA’s Orange Book. Adding this exclusivity to the term of the key patent protection extends exclusivity on these products to January 2023. The Company anticipates that sales of Januvia and Janumet in the U.S. will decline significantly after this loss of market exclusivity. However, Januvia, Janumet, and Janumet XR contain sitagliptin phosphate monohydrate and the Company has another patent covering certain phosphate salt and polymorphic forms of sitagliptin (2027 salt/polymorph patent), which, if determined to be valid, would preclude generic manufacturers from making sitagliptin phosphate salt and polymorphic forms until 2027 with the expiration of that patent, plus pediatric exclusivity. In 2019, Par Pharmaceutical filed suit against the Company in the U.S. District Court for the District of New Jersey, seeking a declaratory judgment of invalidity of the 2027 salt/polymorph patent. In response, the Company filed a patent infringement lawsuit in the U.S. District Court for the District of Delaware against Par Pharmaceutical and additional companies that also indicated an intent to market generic versions of Januvia, Janumet, and Janumet XR following expiration of key patent protection, but prior to the expiration of the 2027 salt/polymorph patent, and a later granted patent owned by the Company covering the Janumet formulation where its term plus the pediatric exclusivity ends in 2029. The Company also filed a patent infringement lawsuit against Mylan in the Northern District of West Virginia. The Judicial Panel on Multidistrict Litigation entered an order transferring the Company’s lawsuit against Mylan to the U.S. District Court for the District of Delaware for coordinated and consolidated pretrial proceedings with the other cases pending in that district.
Prior to the beginning of the October 2021 trial in the U.S. District Court for the District of Delaware on invalidity issues, the Company settled with all defendants scheduled to participate in that trial. In the Company’s case against Mylan, the U.S. District Court for the Northern District of West Virginia has scheduled a five-day bench trial in December 2021.
In total, the Company has settled with 16 generic companies providing that these generic companies can bring their generic versions of Januvia and Janumet to the market in May 2026 or earlier under certain circumstances, and their generic versions of Janumet XR to the market in July 2026 or earlier under certain circumstances.
Additionally, in 2019, Mylan filed a petition for Inter Partes Review (IPR) at the U.S. Patent and Trademark Office (USPTO) seeking invalidity of some, but not all, of the claims of the 2027 salt/polymorph patent. The USPTO instituted IPR proceedings in May 2020, finding a reasonable likelihood that the challenged claims are not valid. A trial was held in February 2021 and a final decision was rendered in May 2021, holding that all of the challenged claims were not invalid. Mylan has appealed the USPTO’s decision to the U.S. Court of Appeals for the Federal Circuit.
On March 1, 2021, the Company filed a patent infringement lawsuit in the U.S. District Court for the District of Delaware against Zydus Worldwide DMCC, Zydus Pharmaceuticals (USA) Inc., and Cadila Healthcare Ltd. (collectively, Zydus). In that lawsuit, the Company alleged infringement of the 2027 salt/polymorph patent based on the filing of Zydus’s application seeking approval under 21 U.S.C. § 355(b)(2) of its sitagliptin tablets. The U.S. District Court for the District of Delaware has set a three-day bench trial in this matter beginning on October 31, 2022.
In Germany, generic companies have sought the revocation of the Supplementary Protection Certificate (SPC) for Janumet. If the generic companies are successful, Janumet could lose market exclusivity in Germany at the same time as the expiry of Januvia pediatric market exclusivity in September 2022. A hearing was held in June 2021 and the court decided that the SPC for Janumet is invalid, which decision the Company has appealed. Challenges to the Janumet SPC have also occurred in the following European countries: Austria, Czech Republic, Finland, France, Hungary, Italy, Portugal, Romania, Slovakia, and Sweden.
Other Litigation
There are various other pending legal proceedings involving the Company, principally product liability and intellectual property lawsuits. While it is not feasible to predict the outcome of such proceedings, in the opinion of the Company, either the likelihood of loss is remote or any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to the Company’s financial condition, results of operations or cash flows either individually or in the aggregate.
Legal Defense Reserves
Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable. Some of the significant factors considered in the review of these legal defense reserves are as follows: the actual costs incurred by the Company; the development of the Company’s legal defense strategy and structure in light of the
scope of its litigation; the number of cases being brought against the Company; the costs and outcomes of completed trials and the most current information regarding anticipated timing, progression, and related costs of pre-trial activities and trials in the associated litigation. The amount of legal defense reserves as of September 30, 2021 and December 31, 2020 of approximately $225 million and $235 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 Company will continue to monitor its legal defense costs and review the adequacy of the associated reserves and may determine to increase the reserves at any time in the future if, based upon the factors set forth, it believes it would be appropriate to do so.
v3.21.2
Equity
 9 Months Ended
Sep. 30, 2021
Equity [Abstract]  
Equity Equity
Three Months Ended September 30,
 
  
Common Stock
Other
Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Loss
 
Treasury Stock
Non-
controlling
Interests		Total
($ and shares in millions except per share amounts)SharesPar ValueSharesCost
Balance at July 1, 20203,577 $1,788 $39,373 $49,724 $(6,393)1,048 $(56,850)$102 $27,744 
Net income attributable to Merck & Co., Inc.— — — 2,941 — — — — 2,941 
Other comprehensive income, net of taxes— — — — 10 — — — 10 
Cash dividends declared on common stock ($0.61 per share)
— — — (1,558)— — — — (1,558)
Share-based compensation plans and other— — 116 — — (1)35 — 151 
Net income attributable to noncontrolling interests
— — — — — — — 4 4 
Distributions attributable to noncontrolling interests— — — — — — — (22)(22)
Balance at September 30, 20203,577 $1,788 $39,489 $51,107 $(6,383)1,047 $(56,815)$84 $29,270 
Balance at July 1, 20213,577 $1,788 $44,039 $48,777 $(4,628)1,044 $(56,682)$94 $33,388 
Net income attributable to Merck & Co., Inc.— — — 4,567 — — — — 4,567 
Other comprehensive income, net of taxes— — — — 38 — — — 38 
Cash dividends declared on common stock ($0.65 per share)
— — — (1,653)— — — — (1,653)
Treasury stock shares purchased— — — — — 8 (583)— (583)
Share-based compensation plans and other— — 110 — — — 21 — 131 
Net income attributable to noncontrolling interests— — — — — — — 4 4 
Distributions attributable to noncontrolling interests— — — — — — — (29)(29)
Balance at September 30, 20213,577 1,788 44,149 51,691 (4,590)1,052 (57,244)69 35,863 
Nine Months Ended September 30,
 
  
Common Stock
Other
Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Loss
 
Treasury Stock
Non-
controlling
Interests		Total
($ and shares in millions except per share amounts)SharesPar ValueSharesCost
Balance at January 1, 20203,577 $1,788 $39,660 $46,602 $(6,193)1,038 $(55,950)$94 $26,001 
Net income attributable to Merck & Co., Inc.— — — 9,161 — — — — 9,161 
Other comprehensive loss, net of taxes— — — — (190)— — — (190)
Cash dividends declared on common stock ($1.83 per share)
— — — (4,656)— — — — (4,656)
Treasury stock shares purchased— — — — — 16 (1,281)— (1,281)
Share-based compensation plans and other— — (171)— — (7)416 — 245 
Net income attributable to noncontrolling interests— — — — — — — 12 12 
Distributions attributable to noncontrolling interests— — — — — — — (22)(22)
Balance at September 30, 20203,577 1,788 39,489 51,107 (6,383)1,047 (56,815)84 29,270 
Balance at January 1, 20213,577 $1,788 $39,588 $47,362 $(6,634)1,047 $(56,787)$87 $25,404 
Net income attributable to Merck & Co., Inc.— — — 9,291 — — — — 9,291 
Other comprehensive income, net of taxes— — — — 1,595 — — — 1,595 
Cash dividends declared on common stock ($1.95 per share)
— — — (4,962)— — — — (4,962)
Treasury stock shares purchased— — — — — 11 (822)— (822)
Spin-off of Organon & Co.— — 4,643 — 449 — — (1)5,091 
Share-based compensation plans and other— — (82)— — (6)365 — 283 
Net income attributable to noncontrolling interests
— — — — — — — 12 12 
Distributions attributable to noncontrolling interests— — — — — — — (29)(29)
Balance at September 30, 20213,577 1,788 44,149 51,691 (4,590)1,052 (57,244)69 35,863 
v3.21.2
Pension and Other Postretirement Benefit Plans
 9 Months Ended
Sep. 30, 2021
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefit Plans Pension and Other Postretirement Benefit Plans
The Company has defined benefit pension plans covering eligible employees in the U.S. and in certain of its international subsidiaries. The net periodic benefit cost of such plans (including certain costs reported as part of discontinued operations) consisted of the following components: 
  Three Months Ended
September 30,		Nine Months Ended
September 30,
2021202020212020
($ in millions)U.S.InternationalU.S.InternationalU.S.InternationalU.S.International
Service cost$104 $75 $96 $76 $302 $254 $270 $222 
Interest cost102 33 107 35 305 92 323 102 
Expected return on plan assets(188)(105)(193)(104)(568)(313)(581)(309)
Amortization of unrecognized prior service credit
(9)(3)(12)(3)(29)(12)(37)(9)
Net loss amortization75 32 75 32 218 110 228 94 
Termination benefits2 — 1 1 54 3 5 2 
Curtailments(1)— 1 — 15 (27)4 (1)
Settlements139 — 2 — 139 2 11 2 
 $224 $32 $77 $37 $436 $109 $223 $103 
The Company provides medical benefits, principally to its eligible U.S. retirees and similar benefits to their dependents, through its other postretirement benefit plans. The net credit of such plans consisted of the following components: 
  Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Service cost$11 $13 $37 $39 
Interest cost12 14 34 43 
Expected return on plan assets(20)(19)(59)(56)
Amortization of unrecognized prior service credit(16)(18)(48)(54)
Net gain amortization(12)(5)(30)(13)
Termination benefits— — 37 — 
Curtailments(1)— (29)(1)
 $(26)$(15)$(58)$(42)
Net periodic benefit cost (credit) for pension and other postretirement benefit plans in the first nine months of 2021 includes expenses for curtailments, settlements and termination benefits provided to certain employees in connection with the spin-off of Organon.
In connection with restructuring actions (see Note 5), termination charges were recorded on pension plans related to expanded eligibility for certain employees exiting Merck. Also, in connection with these restructuring actions, curtailments and settlements were recorded on pension plans. In addition, lump sum payments to U.S. pension plan participants triggered a partial settlement resulting in a charge of approximately $125 million in the third quarter and first nine months of 2021. This partial settlement triggered a remeasurement of some of the Company’s U.S. pension plans. This remeasurement, which was calculated using discount rates and asset values as of September 30, 2021, resulted in a net increase of $160 million to net pension liabilities and also resulted in a related adjustment to AOCL.
The components of net periodic benefit cost (credit) other than the service cost component are included in Other (income) expense, net (see Note 12), with the exception of certain amounts for termination benefits, curtailments and settlements, which are recorded in Restructuring costs if the event giving rise to the termination benefits, curtailment or settlement is related to restructuring actions or in Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests if related to the spin-off of Organon (each as noted above).
The transfer of employees to Organon in connection with the spin-off triggered remeasurements of some of the Company’s pension plans. These remeasurements, which were calculated using discount rates and asset values as of the date of the spin-off, resulted in a $1.7 billion reduction to net pension liabilities primarily due to higher discount rates. In addition, $99 million of net pension liabilities were transferred to Organon. The remeasurements and plan transfers also resulted in a related adjustment to AOCL (see Note 15).
v3.21.2
Other (Income) Expense, Net
 9 Months Ended
Sep. 30, 2021
Other Income and Expenses [Abstract]  
Other (Income) Expense, Net Other (Income) Expense, Net
Other (income) expense, net, consisted of: 
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Interest income$(7)$(9)$(27)$(48)
Interest expense196 203 597 624 
Exchange losses46 10 202 89 
Income from investments in equity securities, net (1)
(683)(360)(1,535)(964)
Net periodic defined benefit plan cost (credit) other than service cost40 (88)(159)(259)
Other, net(42)(68)(85)(79)
 $(450)$(312)$(1,007)$(637)
(1)    Includes net realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds. Unrealized gains and losses from investments that are directly owned are determined at the end of the reporting period, while ownership interests in investment funds are accounted for on a one quarter lag. The Company estimates that gains of approximately $540 million will be recorded in the fourth quarter of 2021 from ownership interests in investment funds.
Interest paid for the nine months ended September 30, 2021 and 2020 was $570 million and $605 million, respectively.
v3.21.2
Taxes on Income
 9 Months Ended
Sep. 30, 2021
Income Tax Disclosure [Abstract]  
Taxes on Income Taxes on Income
The effective income tax rates from continuing operations were 13.2% and 14.0% for the third quarter of 2021 and 2020, respectively, and 14.4% and 15.1% for the first nine months of 2021 and 2020, respectively. The effective tax rates from continuing operations in the third quarter and first nine months of 2021 reflect the beneficial impact of the settlement of a foreign tax matter. The effective income tax rate from continuing operations for the first nine months of 2021 reflects the unfavorable effect of a charge for the acquisition of Pandion for which no tax benefit was recognized, as well as a net tax benefit of $207 million related to the settlement of certain federal income tax matters as discussed below.
In the first quarter of 2021, the Internal Revenue Service (IRS) concluded its examinations of Merck’s 2015-2016 U.S. federal income tax returns. As a result, the Company was required to make a payment of $190 million (of which $172 million related to Merck continuing operations and $18 million related to Organon discontinued operations). The Company’s reserves for unrecognized tax benefits for the years under examination exceeded the adjustments relating to this examination period and therefore the Company recorded a $236 million net tax benefit in the first nine months of 2021 (of which $207 million related to Merck continuing operations and $29 million related to Organon discontinued operations). This net benefit reflects reductions in reserves for unrecognized tax benefits and other related liabilities for tax positions relating to the years that were under examination.
v3.21.2
Earnings Per Share
 9 Months Ended
Sep. 30, 2021
Earnings Per Share [Abstract]  
Earnings Per Share Earnings Per Share
The calculations of earnings per share are as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ and shares in millions except per share amounts)2021202020212020
Net Income from Continuing Operations Attributable to Merck & Co., Inc.$4,567 $2,324 $8,525 $7,136 
Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests— 617 766 2,025 
Net Income Attributable to Merck & Co., Inc.$4,567 $2,941 $9,291 $9,161 
Average common shares outstanding2,530 2,529 2,531 2,530 
Common shares issuable (1)
6 9 8 11 
Average common shares outstanding assuming dilution 2,536 2,538 2,539 2,541 
Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders:
Income from Continuing Operations$1.81 $0.92 $3.37 $2.82 
Income from Discontinued Operations— 0.24 0.30 0.80 
Net Income$1.81 $1.16 $3.67 $3.62 
Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders:
Income from Continuing Operations$1.80 $0.92 $3.36 $2.81 
Income from Discontinued Operations— 0.24 0.30 0.80 
Net Income$1.80 $1.16 $3.66 $3.61 
(1)Issuable primarily under share-based compensation plans.
For the third quarter of 2021 and 2020, 8 million and 5 million, respectively, and for the first nine months of 2021 and 2020, 10 million and 5 million, respectively, of common shares issuable under share-based compensation plans were excluded from the computation of earnings per common share assuming dilution because the effect would have been antidilutive.
v3.21.2
Other Comprehensive Income (Loss)
 9 Months Ended
Sep. 30, 2021
Equity [Abstract]  
Other Comprehensive Income (Loss) Other Comprehensive Income (Loss)
Changes in each component of other comprehensive income (loss) are as follows:
Three Months Ended September 30,
($ in millions)DerivativesInvestmentsEmployee
Benefit
Plans		Foreign Currency
Translation
Adjustment		Accumulated Other
Comprehensive
Income (Loss)
Balance July 1, 2020, net of taxes$15 $— $(4,162)$(2,246)$(6,393)
Other comprehensive income (loss) before reclassification adjustments, pretax(195)— 2 50 (143)
Tax41 — 1 35 77 
Other comprehensive income (loss) before reclassification adjustments, net of taxes(154)— 3 85 (66)
Reclassification adjustments, pretax22 
(1)
— 72 
(3)
— 94 
Tax(5)— (13)— (18)
Reclassification adjustments, net of taxes17 

— 

59 

— 76 
Other comprehensive income (loss), net of taxes(137)— 62 85 10 
Balance September 30, 2020, net of taxes$(122)$— $(4,100)$(2,161)$(6,383)
Balance July 1, 2021, net of taxes$(26)$— $(3,028)$(1,574)$(4,628)
Other comprehensive income (loss) before reclassification adjustments, pretax72 — (24)(96)(48)
Tax(16)— 16 12 12 
Other comprehensive income (loss) before reclassification adjustments, net of taxes56 — (8)(84)(36)
Reclassification adjustments, pretax36 
(1)
— 68 
(3)
— 104 
Tax(8)— (22)— (30)
Reclassification adjustments, net of taxes28 

— 

46 

— 74 
Other comprehensive income (loss), net of taxes84 — 38 (84)38 
Balance September 30, 2021, net of taxes$58 $— $(2,990)$(1,658)$(4,590)
Nine Months Ended September 30,
($ in millions)DerivativesInvestmentsEmployee
Benefit
Plans		Foreign Currency
Translation
Adjustment		Accumulated Other
Comprehensive
Income (Loss)
Balance January 1, 2020, net of taxes$31 $18 $(4,261)$(1,981)$(6,193)
Other comprehensive income (loss) before reclassification adjustments, pretax(126)3 (19)(220)(362)
Tax27 — 12 40 79 
Other comprehensive income (loss) before reclassification adjustments, net of taxes(99)3 (7)(180)(283)
Reclassification adjustments, pretax(68)
(1)
(21)
(2)
210 
(3)
— 121 
Tax14 — (42)— (28)
Reclassification adjustments, net of taxes(54)(21)168 — 93 
Other comprehensive income (loss), net of taxes(153)(18)161 (180)(190)
Balance September 30, 2020, net of taxes$(122)$— $(4,100)$(2,161)$(6,383)
Balance January 1, 2021, net of taxes$(266)$— $(4,540)$(1,828)$(6,634)
Other comprehensive income (loss) before reclassification adjustments, pretax193 — 1,739 (167)1,765 
Tax(41)— (385)(84)(510)
Other comprehensive income (loss) before reclassification adjustments, net of taxes152 — 1,354 (251)1,255 
Reclassification adjustments, pretax218 
(1)
— 210 
(3)
— 428 
Tax(46)— (42)— (88)
Reclassification adjustments, net of taxes172 — 168 — 340 
Other comprehensive income (loss), net of taxes324 — 1,522 (251)1,595 
Spin-off of Organon (see Note 2)— — 28 421 449 
Balance September 30, 2021, net of taxes$58 $— $(2,990)$(1,658)$(4,590)
(1) Primarily relates to foreign currency cash flow hedges that were reclassified from AOCL to Sales.
(2) Represents net realized gains on the sales of available-for-sale debt securities that were reclassified from AOCL to Other (income) expense, net.
(3) Includes net amortization of prior service cost and actuarial gains and losses included in net periodic benefit cost (see Note 11).
v3.21.2
Segment Reporting
 9 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
The Company’s operations are principally managed on a products basis and include two operating segments, which are the Pharmaceutical and Animal Health segments, both of which are reportable segments.
The Pharmaceutical segment includes human health pharmaceutical and vaccine products. Human health pharmaceutical products consist of therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. The Company sells these human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies and managed health care providers such as health maintenance organizations, pharmacy benefit managers and other institutions. Human health vaccine products consist of preventive pediatric, adolescent and adult vaccines, primarily administered at physician offices. The Company sells these human health vaccines primarily to physicians, wholesalers, physician distributors and government entities. A large component of pediatric and adolescent vaccine sales are made to the U.S. Centers for Disease Control and Prevention Vaccines for Children program, which is funded by the U.S. government. Additionally, the Company sells vaccines to the Federal government for placement into vaccine stockpiles.
The Animal Health segment discovers, develops, manufactures and markets a wide range of veterinary pharmaceutical and vaccine products, as well as health management solutions and services, for the prevention, treatment and control of disease in all major livestock and companion animal species. The Company also offers an extensive suite of digitally connected identification, traceability and monitoring products. The Company sells its products to veterinarians, distributors and animal producers.
The Company previously had a Healthcare Services segment that provided services and solutions focused on engagement, health analytics and clinical services to improve the value of care delivered to patients. The Company divested the remaining businesses in this segment during the first quarter of 2020.
Sales of the Company’s products were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
 ($ in millions)U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$2,580 $1,954 $4,534 $2,157 $1,559 $3,715 $7,108 $5,501 $12,609 $6,106 $4,281 $10,387 
Alliance revenue - Lynparza (1)
129 117 246 107 89 196 371 350 721 297 223 519 
Alliance revenue - Lenvima (1)
114 74 188 82 60 142 287 211 498 270 152 421 
Vaccines
Gardasil/Gardasil 9
839 1,154 1,993 579 608 1,187 1,605 2,539 4,144 1,209 1,732 2,941 
ProQuad/M-M-R II/Varivax
537 125 661 437 139 576 1,255 371 1,626 1,033 356 1,390 
Pneumovax 23
181 97 277 276 99 375 354 247 600 478 270 748 
RotaTeq135 92 227 114 96 210 364 229 593 355 246 601 
Vaqta32 16 48 32 19 51 80 58 138 79 60 139 
Hospital Acute Care
Bridion181 188 369 162 157 320 545 551 1,096 412 431 843 
Prevymis39 57 96 32 46 77 111 159 270 87 113 200 
Noxafil19 45 64 13 66 79 48 149 197 27 220 247 
Primaxin— 69 70 1 73 74 — 194 194 2 187 189 
Cancidas1 56 56 1 49 50 4 164 168 2 147 148 
Invanz(2)55 53 1 50 51 (2)159 157 7 152 159 
Zerbaxa(1)(1)(2)20 23 43 (5)(6)(11)57 54 112 
Immunology
Simponi— 203 203 — 209 209 — 619 619 — 615 615 
Remicade— 73 73 — 82 82 — 233 233 — 242 242 
Neuroscience
Belsomra23 58 81 18 63 81 56 183 238 67 177 244 
Virology
Isentress/Isentress HD
77 112 189 92 113 205 222 368 590 243 403 646 
Cardiovascular
Alliance revenue-Adempas/Verquvo (2)
73 27 100 78 5 83 222 26 248 200 16 216 
Adempas— 59 59 — 55 55 — 188 188 — 167 167 
Diabetes
Januvia365 487 852 342 479 821 997 1,448 2,445 1,110 1,339 2,449 
Janumet86 401 487 105 400 506 244 1,205 1,449 361 1,138 1,499 
Other pharmaceutical (3)
262 308 572 193 333 526 745 957 1,704 706 969 1,675 
Total Pharmaceutical segment sales5,670 5,826 11,496 4,842 4,872 9,714 14,611 16,103 30,714 13,108 13,690 26,797 
Animal Health:
Livestock190 675 864 165 593 758 508 1,996 2,503 448 1,697 2,145 
Companion Animals277 276 553 234 228 462 855 948 1,804 676 714 1,390 
Total Animal Health segment sales467 951 1,417 399 821 1,220 1,363 2,944 4,307 1,124 2,411 3,535 
Other segment sales (4)
— — — — — — — — — 23 — 23 
Total segment sales6,137 6,777 12,913 5,241 5,693 10,934 15,974 19,047 35,021 14,255 16,101 30,355 
Other (5)
139 101 241 9 (14)(5)192 (30)162 46 168 215 
 $6,276 $6,878 $13,154 $5,250 $5,679 $10,929 $16,166 $19,017 $35,183 $14,301 $16,269 $30,570 
U.S. plus international may not equal total due to rounding.
(1)    Alliance revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs (see Note 4).
(2)    Alliance revenue represents Merck’s share of profits from sales in Bayer’s marketing territories, which are product sales net of cost of sales and commercialization costs (see Note 4).
(3)    Other pharmaceutical primarily reflects sales of other human health pharmaceutical products, including products within the franchises not listed separately.
(4)    Represents sales for the Healthcare Services segment. All the businesses in the Healthcare Services segment were fully divested in the first quarter of 2020.
(5)    Other is primarily comprised of miscellaneous corporate revenues, including revenue hedging activities, as well as third-party manufacturing sales. Other for the three and nine months ended September 30, 2021 also includes $135 million and $185 million, respectively, related to the achievement of milestones for an out-licensed product that triggered contingent payments to Merck.
Product sales are recorded net of the provision for discounts, including chargebacks, which are customer discounts that occur when a contracted customer purchases through an intermediary wholesale purchaser, and rebates that are owed based upon definitive contractual agreements or legal requirements with private sector and public sector (Medicaid and Medicare Part D) benefit providers, after the final dispensing of the product by a pharmacy to a benefit plan participant. These discounts, in the aggregate, reduced U.S. sales by $3.1 billion and $2.9 billion for the three months ended September 30, 2021 and 2020, respectively, and $9.1 billion and $8.3 billion for the nine months ended September 30, 2021 and 2020, respectively.
Consolidated sales by geographic area where derived are as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
United States$6,276 $5,250 $16,166 $14,301 
Europe, Middle East and Africa3,342 2,946 9,912 8,537 
China1,307 791 3,004 2,060 
Japan638 671 1,929 1,875 
Asia Pacific (other than China and Japan)613 545 1,782 1,560 
Latin America599 499 1,631 1,374 
Other379 227 759 863 
 $13,154 $10,929 $35,183 $30,570 
A reconciliation of segment profits to Income from Continuing Operations Before Taxes is as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Segment profits:
Pharmaceutical segment$8,606 $7,026 $22,450 $19,235 
Animal Health segment505 459 1,629 1,347 
Other segment— (1)— 1 
Total segment profits9,111 7,484 24,079 20,583 
Other profits141 (28)29 135 
Unallocated:
Interest income7 9 27 48 
Interest expense(196)(203)(597)(624)
Amortization(360)(406)(1,231)(1,393)
Depreciation(358)(367)(1,031)(1,105)
Research and development(2,312)(3,231)(8,775)(7,251)
Restructuring costs(107)(113)(487)(265)
Other unallocated, net(660)(439)(2,044)(1,720)
 $5,266 $2,706 $9,970 $8,408 
Pharmaceutical segment profits are comprised of segment sales less standard costs, as well as selling, general and administrative expenses directly incurred by the segment. Animal Health segment profits are comprised of segment sales, less all cost of sales, as well as selling, general and administrative expenses and research and development costs directly incurred by the segment. For internal management reporting presented to the chief operating decision maker, Merck does not allocate the remaining cost of sales not included in segment profits as described above, research and development expenses incurred in Merck Research Laboratories, the Company’s research and development division that focuses on human health-related activities, or general and administrative expenses, nor the cost of financing these activities. Separate divisions maintain responsibility for monitoring and managing these costs, including depreciation related to fixed assets utilized by these divisions and, therefore, they are not included in segment profits. In addition, costs related to restructuring activities, as well as the amortization of intangible assets and purchase accounting adjustments are not allocated to segments.
Other profits are primarily comprised of miscellaneous corporate profits, as well as operating profits related to third-party manufacturing sales.
Other unallocated, net, includes expenses from corporate and manufacturing cost centers, goodwill and other intangible asset impairment charges, gains or losses on sales of businesses, expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration, and other miscellaneous income or expense items.
v3.21.2
Basis of Presentation (Policies)
 9 Months Ended
Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation Basis of PresentationThe accompanying unaudited condensed consolidated financial statements of Merck & Co., Inc. (Merck or the Company) have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by accounting principles generally accepted in the United States (U.S.) (GAAP) for complete consolidated financial statements are not included herein. These interim statements should be read in conjunction with the audited financial statements and notes thereto included in Merck’s Form 10-K filed on February 25, 2021.The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. In the Company’s opinion, all adjustments necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature.
Recently Adopted Accounting Standards and Recently Issued Accounting Standards Not Yet Adopted
Recently Adopted Accounting Standards
In December 2019, the Financial Accounting Standards Board (FASB) issued amended guidance on the accounting and reporting of income taxes. The guidance is intended to simplify the accounting for income taxes by removing exceptions related to certain intraperiod tax allocations and deferred tax liabilities, clarifying guidance primarily related to evaluating the step-up tax basis for goodwill in a business combination, and reflecting enacted changes in tax laws or rates in the annual effective tax rate. The Company adopted the new guidance effective January 1, 2021. There was no impact to the Company’s consolidated financial statements upon adoption.
In January 2020, the FASB issued new guidance intended to clarify certain interactions between accounting standards related to equity securities, equity method investments and certain derivatives. The guidance addresses accounting for the transition into and out of the equity method of accounting and measuring certain purchased options and forward contracts to acquire investments. The Company adopted the new guidance effective January 1, 2021. There was no impact to the Company’s consolidated financial statements upon adoption.
Recently Issued Accounting Standards Not Yet Adopted
In March 2020, the FASB issued optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and subsequently issued clarifying amendments. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The optional guidance is effective upon issuance and can be applied on a prospective basis at any time between January 1, 2020 through December 31, 2022. The Company is currently evaluating the impact of adoption on its consolidated financial statements.
In August 2020, the FASB issued amended guidance on the accounting for convertible instruments and contracts in an entity’s own equity. The guidance removes the separation model for convertible debt instruments and preferred stock, amends requirements for conversion options to be classified in equity as well as amends diluted earnings per share (EPS) calculations for certain convertible debt instruments. The amended guidance is effective for interim and annual periods in 2022. Early adoption is permitted. The application of the amendments in the new guidance are to be applied either on a modified retrospective or a retrospective basis. The Company is currently evaluating the impact of adoption on its consolidated financial statements.
In October 2021, the FASB issued amended guidance that requires acquiring entities to recognize and measure contract assets and liabilities in a business combination in accordance with existing revenue recognition guidance. The amended guidance is effective for interim and annual periods in 2023 and is to be applied prospectively. Early adoption is permitted on a retrospective basis to the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of adoption on its consolidated financial statements.
Legal Costs Legal defense costs expected to be incurred in connection with a loss contingency are accrued when probable and reasonably estimable.
v3.21.2
Spin-Off of Organon & Co. (Tables)
 9 Months Ended
Sep. 30, 2021
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations
Details of Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests are as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2020
2021 (1)
2020
Sales$1,622 $2,512 $4,911 
Costs, Expenses and Other
Cost of sales468 789 1,362 
Selling, general and administrative390 877 1,046 
Research and development41 103 113 
Restructuring costs1 1 4 
Other (income) expense, net— (15)7 
900 1,755 2,532 
Income from discontinued operations before taxes722 757 2,379 
Tax provision (benefit)103 (12)343 
Income from discontinued operations, net of taxes619 769 2,036 
Less: Income of discontinued operations attributable to noncontrolling interests2 3 11 
Income from discontinued operations, net of taxes and amounts attributable to noncontrolling interests$617 $766 $2,025 
(1) Reflects amounts through the June 2, 2021 spin-off date.
Details of assets and liabilities of discontinued operations are as follows: 
($ in millions)December 31, 2020
Cash and cash equivalents$12 
Accounts receivable, less allowance for doubtful accounts1,048 
Inventories756 
Other current assets867 
Current assets of discontinued operations$2,683 
Property, plant and equipment, net$986 
Goodwill1,356 
Other intangibles, net503 
Other assets330 
Noncurrent Assets of Discontinued Operations$3,175 
Trade accounts payable$267 
Accrued and other current liabilities841 
Income taxes payable(22)
Total current liabilities of discontinued operations$1,086 
Deferred income taxes$10 
Other noncurrent liabilities176 
Noncurrent Liabilities of Discontinued Operations$186 
v3.21.2
Acquisitions, Research Collaborations and License Agreements (Tables)
 9 Months Ended
Sep. 30, 2021
Business Combination and Asset Acquisition [Abstract]  
Fair Value of Assets Acquired and Liabilities Assumed
The estimated fair value of assets acquired and liabilities assumed from ArQule is as follows:
($ in millions)January 16, 2020
Cash and cash equivalents$145 
IPR&D MK-1026 (formerly ARQ 531) (1)
2,280 
Licensing arrangement for ARQ 08780 
Deferred income tax liabilities(361)
Other assets and liabilities, net34 
Total identifiable net assets2,178 
Goodwill (2)
512 
Consideration transferred$2,690 
(1) The estimated fair value of the identifiable intangible asset related to IPR&D was determined using an income approach. The future net cash flows were discounted to present value utilizing a discount rate of 12.5%. Actual cash flows are likely to be different than those assumed.
(2) The goodwill was allocated to the Pharmaceutical segment and is not deductible for tax purposes.
v3.21.2
Collaborative Arrangements (Tables)
 9 Months Ended
Sep. 30, 2021
Collaborative Arrangements [Abstract]  
Collaboration Arrangements
Summarized financial information related to this collaboration is as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Alliance revenue - Lynparza$246 $196 $721 $519 
Alliance revenue - Koselugo6 3 20 3 
Total alliance revenue$252 $199 $741 $522 
Cost of sales (1)
42 41 125 205 
Selling, general and administrative44 40 127 112 
Research and development27 20 87 93 
($ in millions)September 30, 2021December 31, 2020
Receivables from AstraZeneca included in Other current assets
$248 $215 
Payables to AstraZeneca included in Accrued and other current liabilities (2)
415 423 
(1) Represents amortization of capitalized milestone payments.
(2) Includes accrued milestone payments.
Summarized financial information related to this collaboration is as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Alliance revenue - Lenvima$188 $142 $498 $421 
Cost of sales (1)
49 46 143 215 
Selling, general and administrative34 18 88 48 
Research and development43 48 165 168 
($ in millions)September 30, 2021December 31, 2020
Receivables from Eisai included in Other current assets
$223 $157 
Payables to Eisai included in Accrued and other current liabilities (2)
600 335 
Payables to Eisai included in Other Noncurrent Liabilities (3)
— 600 
(1) Represents amortization of capitalized milestone payments.
(2) Includes accrued milestone and future option payments.
(3) Includes accrued milestone payments.
Summarized financial information related to this collaboration is as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Alliance revenue - Adempas/Verquvo$100 $83 $248 $216 
Net sales of Adempas recorded by Merck59 55 188 167 
Net sales of Verquvo recorded by Merck2 — 3 — 
Total sales$161 $138 $439 $383 
Cost of sales (1)
53 81 328 229 
Selling, general and administrative31 12 84 32 
Research and development16 12 36 53 
($ in millions)September 30, 2021December 31, 2020
Receivables from Bayer included in Other current assets
$139 $65 
Payables to Bayer included in Accrued and other current liabilities (2)
467 — 
(1) Includes amortization of intangible assets. Amount in the first nine months of 2021 includes $153 million of cumulative amortization as noted above. In addition, cost of sales in all periods now includes Bayer’s share of profits from sales in Merck’s marketing territories.
(2) Includes accrued milestone payment.
v3.21.2
Restructuring (Tables)
 9 Months Ended
Sep. 30, 2021
Restructuring and Related Activities [Abstract]  
Charges Related to Restructuring Program Activities by Type of Cost
The following tables summarize the charges related to restructuring program activities by type of cost:
 Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
($ in millions)Separation
Costs		Accelerated
Depreciation		OtherTotalSeparation
Costs		Accelerated
Depreciation		OtherTotal
Cost of sales$— $11 $37 $48 $— $32 $81 $113 
Selling, general and administrative— 4 1 5 — 8 1 9 
Research and development— 7 1 8 — 20 1 21 
Restructuring costs17 — 90 107 310 — 177 487 
$17 $22 $129 $168 $310 $60 $260 $630 
 Three Months Ended September 30, 2020Nine Months Ended September 30, 2020
($ in millions)Separation
Costs		Accelerated
Depreciation		OtherTotalSeparation
Costs		Accelerated
Depreciation		OtherTotal
Cost of sales$— $33 $5 $38 $— $89 $42 $131 
Selling, general and administrative— 15 — 15 — 37 — 37 
Research and development— 18 1 19 — 66 1 67 
Restructuring costs61 — 52 113 143 — 122 265 
$61 $66 $58 $185 $143 $192 $165 $500 
Charges and Spending Relating to Restructuring Activities by Program
The following table summarizes the charges and spending relating to restructuring program activities for the nine months ended September 30, 2021:
($ in millions)Separation
Costs		Accelerated
Depreciation		OtherTotal
Restructuring reserves January 1, 2021
$567 $— $19 $586 
Expense310 60 260 630 
(Payments) receipts, net(305)— (155)(460)
Non-cash activity— (60)(84)(144)
Restructuring reserves September 30, 2021 (1)
$572 $— $40 $612 
(1)The remaining cash outlays are expected to be substantially completed by the end of 2023.
v3.21.2
Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Effect of Net Investment Hedges on OCI and the Consolidated Statement of Income
The effects of the Company’s net investment hedges on OCI and the Consolidated Statement of Income are shown below:
Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income (1)
Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
($ in millions)20212020202120202021202020212020
Net Investment Hedging Relationships
Foreign exchange contracts
$1 $10 $(27)$15 $(4)$(4)$(12)$(15)
Euro-denominated notes(77)162 (199)182 — — — — 
(1) No amounts were reclassified from AOCL into income related to the sale of a subsidiary.
Summary of Interest Rate Swaps Held At September 30, 2021, the Company was a party to nine pay-floating, receive-fixed interest rate swap contracts designated as fair value hedges of fixed-rate notes in which the notional amounts match the amount of the hedged fixed-rate notes as detailed in the table below.
September 30, 2021
($ in millions)Par Value of DebtNumber of Interest Rate Swaps HeldTotal Swap Notional Amount
2.40% notes due 2022
$1,000 4 $1,000 
2.35% notes due 2022
1,250 5 1,250 
Amounts Recorded on Balance Sheet Related to Fair Value Hedges
The table below presents the location of amounts recorded on the Condensed Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges:
Carrying Amount of Hedged LiabilitiesCumulative Amount of Fair Value Hedging Adjustment Increase (Decrease) Included in the Carrying Amount
($ in millions)September 30, 2021December 31, 2020September 30, 2021December 31, 2020
Loans payable and current portion of long-term debt$2,274 $1,150 $25 $— 
Long-Term Debt— 2,301 — 53 
Fair Value of Derivatives on a Gross Basis Segregated between those Derivatives that are Designated as Hedging Instruments and those that are Not Designated as Hedging Instruments
Presented in the table below is the fair value of derivatives on a gross basis segregated between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
  September 30, 2021December 31, 2020
  Fair Value of DerivativeU.S. Dollar
Notional		Fair Value of DerivativeU.S. Dollar
Notional
($ in millions)AssetLiabilityAssetLiability
Derivatives Designated as Hedging Instruments
Balance Sheet Caption
Interest rate swap contractsOther current assets$26 $— $2,250 $1 $— $1,150 
Interest rate swap contractsOther Assets— — — 54 — 2,250 
Foreign exchange contractsOther current assets224 — 7,138 12 — 3,183 
Foreign exchange contractsOther Assets45 — 1,469 45 — 2,030 
Foreign exchange contractsAccrued and other current liabilities— 15 1,601 — 217 5,049 
Foreign exchange contractsOther Noncurrent Liabilities— 1 145 — 1 52 
  $295 $16 $12,603 $112 $218 $13,714 
Derivatives Not Designated as Hedging Instruments
Balance Sheet Caption      
Foreign exchange contractsOther current assets$82 $— $6,333 $70 $— $7,260 
Foreign exchange contractsAccrued and other current liabilities— 117 9,522 — 307 11,810 
  $82 $117 $15,855 $70 $307 $19,070 
  $377 $133 $28,458 $182 $525 $32,784 
Information on Derivative Positions Subject to Master Netting Arrangements as if they were Presented on a Net Basis The following table provides information on the Company’s derivative positions subject to these master netting arrangements as if they were presented on a net basis, allowing for the right of offset by counterparty and cash collateral exchanged per the master agreements and related credit support annexes:
 September 30, 2021December 31, 2020
($ in millions)AssetLiabilityAssetLiability
Gross amounts recognized in the condensed consolidated balance sheet$377 $133 $182 $525 
Gross amounts subject to offset in master netting arrangements not offset in the condensed consolidated balance sheet
(120)(120)(156)(156)
Cash collateral received/posted(65)— — (36)
Net amounts$192 $13 $26 $333 
Location and Amount of Pretax (Gains) Losses of Derivatives
The table below provides information regarding the location and amount of pretax (gains) losses of derivatives designated in fair value or cash flow hedging relationships (including amounts attributable to discontinued operations):
Sales
Other (income) expense, net (1)
Other comprehensive income (loss)Sales
Other (income) expense, net (1)
Other comprehensive income (loss)
Three Months Ended September 30,Three Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,Nine Months Ended September 30,Nine Months Ended September 30,
($ in millions)202120202021202020212020202120202021202020212020
Financial Statement Line Items in which Effects of Fair Value or Cash Flow Hedges are Recorded$13,154 $10,929 $(450)$(312)$38 $10 $35,183 $30,570 $(1,007)$(637)$1,595 $(190)
(Gain) loss on fair value hedging relationships
Interest rate swap contracts
Hedged items
— — (9)(14)— — — — (29)54 — — 
Derivatives designated as hedging instruments
— — (1)— — — — — (1)(76)— — 
Impact of cash flow hedging relationships
Foreign exchange contracts
Amount of gain (loss) recognized in OCI on derivatives
— — — — 72 (195)— — — — 193 (126)
(Decrease) increase in Sales as a result of AOCL reclassifications
(36)(23)— — 36 23 (219)65 — — 219 (65)
Interest rate contracts
Amount of gain recognized in Other (income) expense, net on derivatives
— — — (1)— — — — (2)(3)— — 
Amount of loss recognized in OCI on derivatives
— — — — — (1)— — — — (2)(3)
(1) Interest expense is a component of Other (income) expense, net.
Income Statement Effects of Derivatives Not Designated as Hedging Instruments
The table below provides information regarding the income statement effects of derivatives not designated as hedging instruments (including amounts attributable to discontinued operations):
Amount of Derivative Pretax (Gain) Loss Recognized in Income
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Derivatives Not Designated as Hedging InstrumentsIncome Statement Caption
Foreign exchange contracts (1)
Other (income) expense, net$18 $(7)$234 $(138)
Foreign exchange contracts (2)
Sales(4)7 6 4 
Interest rate contracts (3)
Other (income) expense, net— — — 9 
Forward contract related to Seagen common stockResearch and development— 22 — 22 
(1) These derivative contracts primarily mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates. Amount in the first nine months of 2021 includes a loss on forward exchange contracts entered into in conjunction with the spin-off of Organon.
(2) These derivative contracts serve as economic hedges of forecasted transactions.
(3) These derivative contracts serve as economic hedges against rising treasury rates.
Information on Investments in Debt and Equity Securities
Information on investments in debt and equity securities is as follows:
 September 30, 2021December 31, 2020
 Amortized
Cost		Gross UnrealizedFair
Value		Amortized
Cost		Gross UnrealizedFair
Value
($ in millions)GainsLossesGainsLosses
U.S. government and agency securities$83 $— $— $83 $84 $— $— $84 
Corporate notes and bonds4 — — 4 — — — — 
Foreign government bonds2 — — 2 5 — — 5 
Total debt securities$89 $— $— $89 $89 $— $— $89 
Publicly traded equity securities (1)
1,915 1,787 
Total debt and publicly traded equity securities
$2,004 $1,876 
(1) Unrealized net gains of $90 million and unrealized net losses of $109 million were recorded in Other (income) expense, net on equity securities still held at September 30, 2021 in the third quarter and first nine months of 2021, respectively. Unrealized net gains recorded in Other (income) expense, net on equity securities still held at September 30, 2020 were $43 million and $512 million in the third quarter and first nine months of 2020, respectively.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
Fair Value Measurements UsingFair Value Measurements Using
 Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
($ in millions)September 30, 2021December 31, 2020
Assets
Investments
Foreign government bonds$— $2 $— $2 $— $5 $— $5 
Publicly traded equity securities433 — — 433 780 — — 780 
 433 2 — 435 780 5 — 785 
Other assets (1)
U.S. government and agency securities83 — — 83 84 — — 84 
Corporate notes and bonds4 — — 4 — — — — 
Publicly traded equity securities1,482 — — 1,482 1,007 — — 1,007 
1,569 — — 1,569 1,091 — — 1,091 
Derivative assets (2)
Forward exchange contracts— 230 — 230 — 90 — 90 
Purchased currency options— 121 — 121 — 37 — 37 
Interest rate swaps— 26 — 26 — 55 — 55 
 — 377 — 377 — 182 — 182 
Total assets$2,002 $379 $— $2,381 $1,871 $187 $— $2,058 
Liabilities
Other liabilities
Contingent consideration$— $— $902 $902 $— $— $841 $841 
Derivative liabilities (2)
Forward exchange contracts— 132 — 132 — 505 — 505 
Written currency options— 1 — 1 — 20 — 20 
— 133 — 133 — 525 — 525 
Total liabilities$— $133 $902 $1,035 $— $525 $841 $1,366 
(1) Investments included in other assets are restricted as to use, including for the payment of benefits under employee benefit plans.
(2)    The fair value determination of derivatives includes the impact of the credit risk of counterparties to the derivatives and the Company’s own credit risk, the effects of which were not significant.
Information About the Changes in Liabilities for Contingent Consideration
Summarized information about the changes in the fair value of liabilities for contingent consideration associated with business acquisitions is as follows:
Nine Months Ended September 30,
($ in millions)20212020
January 1$841 $767 
Additions— 97 
Changes in estimated fair value (1)
73 71 
Payments— (106)
Other(12)— 
September 30 (2)(3)
$902 $829 
(1) Recorded in Cost of sales, Research and development expenses, and Other (income) expense, net. Includes cumulative translation adjustments.
(2) Balance at September 30, 2021 includes $289 million recorded as a current liability for amounts expected to be paid within the next 12 months.
(3) At September 30, 2021 and December 31, 2020, $747 million and $711 million, respectively, of the liabilities relate to the termination of the Sanofi Pasteur MSD joint venture in 2016. As part of the termination, Merck recorded a liability for contingent future royalty payments of 11.5% on net sales of all Merck products that were previously sold by the joint venture through December 31, 2024. The fair value of this liability is determined utilizing the estimated amount and timing of projected cash flows using a risk-adjusted discount rate of 8% to present value the cash flows.
v3.21.2
Inventories (Tables)
 9 Months Ended
Sep. 30, 2021
Inventory Disclosure [Abstract]  
Inventories
Inventories consisted of:
($ in millions)September 30, 2021December 31, 2020
Finished goods$1,628 $1,610 
Raw materials and work in process6,135 5,949 
Supplies190 146 
Total (approximates current cost)7,953 7,705 
Increase (decrease) to LIFO cost23 (81)
 $7,976 $7,624 
Recognized as:
Inventories$5,603 $5,554 
Other assets2,373 2,070 
v3.21.2
Equity (Tables)
 9 Months Ended
Sep. 30, 2021
Equity [Abstract]  
Schedule of Equity
Three Months Ended September 30,
 
  
Common Stock
Other
Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Loss
 
Treasury Stock
Non-
controlling
Interests		Total
($ and shares in millions except per share amounts)SharesPar ValueSharesCost
Balance at July 1, 20203,577 $1,788 $39,373 $49,724 $(6,393)1,048 $(56,850)$102 $27,744 
Net income attributable to Merck & Co., Inc.— — — 2,941 — — — — 2,941 
Other comprehensive income, net of taxes— — — — 10 — — — 10 
Cash dividends declared on common stock ($0.61 per share)
— — — (1,558)— — — — (1,558)
Share-based compensation plans and other— — 116 — — (1)35 — 151 
Net income attributable to noncontrolling interests
— — — — — — — 4 4 
Distributions attributable to noncontrolling interests— — — — — — — (22)(22)
Balance at September 30, 20203,577 $1,788 $39,489 $51,107 $(6,383)1,047 $(56,815)$84 $29,270 
Balance at July 1, 20213,577 $1,788 $44,039 $48,777 $(4,628)1,044 $(56,682)$94 $33,388 
Net income attributable to Merck & Co., Inc.— — — 4,567 — — — — 4,567 
Other comprehensive income, net of taxes— — — — 38 — — — 38 
Cash dividends declared on common stock ($0.65 per share)
— — — (1,653)— — — — (1,653)
Treasury stock shares purchased— — — — — 8 (583)— (583)
Share-based compensation plans and other— — 110 — — — 21 — 131 
Net income attributable to noncontrolling interests— — — — — — — 4 4 
Distributions attributable to noncontrolling interests— — — — — — — (29)(29)
Balance at September 30, 20213,577 1,788 44,149 51,691 (4,590)1,052 (57,244)69 35,863 
Nine Months Ended September 30,
 
  
Common Stock
Other
Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Loss
 
Treasury Stock
Non-
controlling
Interests		Total
($ and shares in millions except per share amounts)SharesPar ValueSharesCost
Balance at January 1, 20203,577 $1,788 $39,660 $46,602 $(6,193)1,038 $(55,950)$94 $26,001 
Net income attributable to Merck & Co., Inc.— — — 9,161 — — — — 9,161 
Other comprehensive loss, net of taxes— — — — (190)— — — (190)
Cash dividends declared on common stock ($1.83 per share)
— — — (4,656)— — — — (4,656)
Treasury stock shares purchased— — — — — 16 (1,281)— (1,281)
Share-based compensation plans and other— — (171)— — (7)416 — 245 
Net income attributable to noncontrolling interests— — — — — — — 12 12 
Distributions attributable to noncontrolling interests— — — — — — — (22)(22)
Balance at September 30, 20203,577 1,788 39,489 51,107 (6,383)1,047 (56,815)84 29,270 
Balance at January 1, 20213,577 $1,788 $39,588 $47,362 $(6,634)1,047 $(56,787)$87 $25,404 
Net income attributable to Merck & Co., Inc.— — — 9,291 — — — — 9,291 
Other comprehensive income, net of taxes— — — — 1,595 — — — 1,595 
Cash dividends declared on common stock ($1.95 per share)
— — — (4,962)— — — — (4,962)
Treasury stock shares purchased— — — — — 11 (822)— (822)
Spin-off of Organon & Co.— — 4,643 — 449 — — (1)5,091 
Share-based compensation plans and other— — (82)— — (6)365 — 283 
Net income attributable to noncontrolling interests
— — — — — — — 12 12 
Distributions attributable to noncontrolling interests— — — — — — — (29)(29)
Balance at September 30, 20213,577 1,788 44,149 51,691 (4,590)1,052 (57,244)69 35,863 
v3.21.2
Pension and Other Postretirement Benefit Plans (Tables)
 9 Months Ended
Sep. 30, 2021
Pension Plans  
Defined Benefit Plan Disclosure [Line Items]  
Net Benefit Costs
The Company has defined benefit pension plans covering eligible employees in the U.S. and in certain of its international subsidiaries. The net periodic benefit cost of such plans (including certain costs reported as part of discontinued operations) consisted of the following components: 
  Three Months Ended
September 30,		Nine Months Ended
September 30,
2021202020212020
($ in millions)U.S.InternationalU.S.InternationalU.S.InternationalU.S.International
Service cost$104 $75 $96 $76 $302 $254 $270 $222 
Interest cost102 33 107 35 305 92 323 102 
Expected return on plan assets(188)(105)(193)(104)(568)(313)(581)(309)
Amortization of unrecognized prior service credit
(9)(3)(12)(3)(29)(12)(37)(9)
Net loss amortization75 32 75 32 218 110 228 94 
Termination benefits2 — 1 1 54 3 5 2 
Curtailments(1)— 1 — 15 (27)4 (1)
Settlements139 — 2 — 139 2 11 2 
 $224 $32 $77 $37 $436 $109 $223 $103 
Other Postretirement Benefit Plans  
Defined Benefit Plan Disclosure [Line Items]  
Net Benefit Costs
The Company provides medical benefits, principally to its eligible U.S. retirees and similar benefits to their dependents, through its other postretirement benefit plans. The net credit of such plans consisted of the following components: 
  Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Service cost$11 $13 $37 $39 
Interest cost12 14 34 43 
Expected return on plan assets(20)(19)(59)(56)
Amortization of unrecognized prior service credit(16)(18)(48)(54)
Net gain amortization(12)(5)(30)(13)
Termination benefits— — 37 — 
Curtailments(1)— (29)(1)
 $(26)$(15)$(58)$(42)
v3.21.2
Other (Income) Expense, Net (Tables)
 9 Months Ended
Sep. 30, 2021
Other Income and Expenses [Abstract]  
Other (Income) Expense, Net
Other (income) expense, net, consisted of: 
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Interest income$(7)$(9)$(27)$(48)
Interest expense196 203 597 624 
Exchange losses46 10 202 89 
Income from investments in equity securities, net (1)
(683)(360)(1,535)(964)
Net periodic defined benefit plan cost (credit) other than service cost40 (88)(159)(259)
Other, net(42)(68)(85)(79)
 $(450)$(312)$(1,007)$(637)
(1)    Includes net realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds. Unrealized gains and losses from investments that are directly owned are determined at the end of the reporting period, while ownership interests in investment funds are accounted for on a one quarter lag. The Company estimates that gains of approximately $540 million will be recorded in the fourth quarter of 2021 from ownership interests in investment funds.
v3.21.2
Earnings Per Share (Tables)
 9 Months Ended
Sep. 30, 2021
Earnings Per Share [Abstract]  
Calculations of Earnings Per Share
The calculations of earnings per share are as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ and shares in millions except per share amounts)2021202020212020
Net Income from Continuing Operations Attributable to Merck & Co., Inc.$4,567 $2,324 $8,525 $7,136 
Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests— 617 766 2,025 
Net Income Attributable to Merck & Co., Inc.$4,567 $2,941 $9,291 $9,161 
Average common shares outstanding2,530 2,529 2,531 2,530 
Common shares issuable (1)
6 9 8 11 
Average common shares outstanding assuming dilution 2,536 2,538 2,539 2,541 
Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders:
Income from Continuing Operations$1.81 $0.92 $3.37 $2.82 
Income from Discontinued Operations— 0.24 0.30 0.80 
Net Income$1.81 $1.16 $3.67 $3.62 
Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders:
Income from Continuing Operations$1.80 $0.92 $3.36 $2.81 
Income from Discontinued Operations— 0.24 0.30 0.80 
Net Income$1.80 $1.16 $3.66 $3.61 
(1)Issuable primarily under share-based compensation plans.
v3.21.2
Other Comprehensive Income (Loss) (Tables)
 9 Months Ended
Sep. 30, 2021
Equity [Abstract]  
Changes in AOCI by Component
Changes in each component of other comprehensive income (loss) are as follows:
Three Months Ended September 30,
($ in millions)DerivativesInvestmentsEmployee
Benefit
Plans		Foreign Currency
Translation
Adjustment		Accumulated Other
Comprehensive
Income (Loss)
Balance July 1, 2020, net of taxes$15 $— $(4,162)$(2,246)$(6,393)
Other comprehensive income (loss) before reclassification adjustments, pretax(195)— 2 50 (143)
Tax41 — 1 35 77 
Other comprehensive income (loss) before reclassification adjustments, net of taxes(154)— 3 85 (66)
Reclassification adjustments, pretax22 
(1)
— 72 
(3)
— 94 
Tax(5)— (13)— (18)
Reclassification adjustments, net of taxes17 

— 

59 

— 76 
Other comprehensive income (loss), net of taxes(137)— 62 85 10 
Balance September 30, 2020, net of taxes$(122)$— $(4,100)$(2,161)$(6,383)
Balance July 1, 2021, net of taxes$(26)$— $(3,028)$(1,574)$(4,628)
Other comprehensive income (loss) before reclassification adjustments, pretax72 — (24)(96)(48)
Tax(16)— 16 12 12 
Other comprehensive income (loss) before reclassification adjustments, net of taxes56 — (8)(84)(36)
Reclassification adjustments, pretax36 
(1)
— 68 
(3)
— 104 
Tax(8)— (22)— (30)
Reclassification adjustments, net of taxes28 

— 

46 

— 74 
Other comprehensive income (loss), net of taxes84 — 38 (84)38 
Balance September 30, 2021, net of taxes$58 $— $(2,990)$(1,658)$(4,590)
Nine Months Ended September 30,
($ in millions)DerivativesInvestmentsEmployee
Benefit
Plans		Foreign Currency
Translation
Adjustment		Accumulated Other
Comprehensive
Income (Loss)
Balance January 1, 2020, net of taxes$31 $18 $(4,261)$(1,981)$(6,193)
Other comprehensive income (loss) before reclassification adjustments, pretax(126)3 (19)(220)(362)
Tax27 — 12 40 79 
Other comprehensive income (loss) before reclassification adjustments, net of taxes(99)3 (7)(180)(283)
Reclassification adjustments, pretax(68)
(1)
(21)
(2)
210 
(3)
— 121 
Tax14 — (42)— (28)
Reclassification adjustments, net of taxes(54)(21)168 — 93 
Other comprehensive income (loss), net of taxes(153)(18)161 (180)(190)
Balance September 30, 2020, net of taxes$(122)$— $(4,100)$(2,161)$(6,383)
Balance January 1, 2021, net of taxes$(266)$— $(4,540)$(1,828)$(6,634)
Other comprehensive income (loss) before reclassification adjustments, pretax193 — 1,739 (167)1,765 
Tax(41)— (385)(84)(510)
Other comprehensive income (loss) before reclassification adjustments, net of taxes152 — 1,354 (251)1,255 
Reclassification adjustments, pretax218 
(1)
— 210 
(3)
— 428 
Tax(46)— (42)— (88)
Reclassification adjustments, net of taxes172 — 168 — 340 
Other comprehensive income (loss), net of taxes324 — 1,522 (251)1,595 
Spin-off of Organon (see Note 2)— — 28 421 449 
Balance September 30, 2021, net of taxes$58 $— $(2,990)$(1,658)$(4,590)
(1) Primarily relates to foreign currency cash flow hedges that were reclassified from AOCL to Sales.
(2) Represents net realized gains on the sales of available-for-sale debt securities that were reclassified from AOCL to Other (income) expense, net.
(3) Includes net amortization of prior service cost and actuarial gains and losses included in net periodic benefit cost (see Note 11).
v3.21.2
Segment Reporting (Tables)
 9 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
Sales from Products
Sales of the Company’s products were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
 ($ in millions)U.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotalU.S.Int’lTotal
Pharmaceutical:
Oncology
Keytruda$2,580 $1,954 $4,534 $2,157 $1,559 $3,715 $7,108 $5,501 $12,609 $6,106 $4,281 $10,387 
Alliance revenue - Lynparza (1)
129 117 246 107 89 196 371 350 721 297 223 519 
Alliance revenue - Lenvima (1)
114 74 188 82 60 142 287 211 498 270 152 421 
Vaccines
Gardasil/Gardasil 9
839 1,154 1,993 579 608 1,187 1,605 2,539 4,144 1,209 1,732 2,941 
ProQuad/M-M-R II/Varivax
537 125 661 437 139 576 1,255 371 1,626 1,033 356 1,390 
Pneumovax 23
181 97 277 276 99 375 354 247 600 478 270 748 
RotaTeq135 92 227 114 96 210 364 229 593 355 246 601 
Vaqta32 16 48 32 19 51 80 58 138 79 60 139 
Hospital Acute Care
Bridion181 188 369 162 157 320 545 551 1,096 412 431 843 
Prevymis39 57 96 32 46 77 111 159 270 87 113 200 
Noxafil19 45 64 13 66 79 48 149 197 27 220 247 
Primaxin— 69 70 1 73 74 — 194 194 2 187 189 
Cancidas1 56 56 1 49 50 4 164 168 2 147 148 
Invanz(2)55 53 1 50 51 (2)159 157 7 152 159 
Zerbaxa(1)(1)(2)20 23 43 (5)(6)(11)57 54 112 
Immunology
Simponi— 203 203 — 209 209 — 619 619 — 615 615 
Remicade— 73 73 — 82 82 — 233 233 — 242 242 
Neuroscience
Belsomra23 58 81 18 63 81 56 183 238 67 177 244 
Virology
Isentress/Isentress HD
77 112 189 92 113 205 222 368 590 243 403 646 
Cardiovascular
Alliance revenue-Adempas/Verquvo (2)
73 27 100 78 5 83 222 26 248 200 16 216 
Adempas— 59 59 — 55 55 — 188 188 — 167 167 
Diabetes
Januvia365 487 852 342 479 821 997 1,448 2,445 1,110 1,339 2,449 
Janumet86 401 487 105 400 506 244 1,205 1,449 361 1,138 1,499 
Other pharmaceutical (3)
262 308 572 193 333 526 745 957 1,704 706 969 1,675 
Total Pharmaceutical segment sales5,670 5,826 11,496 4,842 4,872 9,714 14,611 16,103 30,714 13,108 13,690 26,797 
Animal Health:
Livestock190 675 864 165 593 758 508 1,996 2,503 448 1,697 2,145 
Companion Animals277 276 553 234 228 462 855 948 1,804 676 714 1,390 
Total Animal Health segment sales467 951 1,417 399 821 1,220 1,363 2,944 4,307 1,124 2,411 3,535 
Other segment sales (4)
— — — — — — — — — 23 — 23 
Total segment sales6,137 6,777 12,913 5,241 5,693 10,934 15,974 19,047 35,021 14,255 16,101 30,355 
Other (5)
139 101 241 9 (14)(5)192 (30)162 46 168 215 
 $6,276 $6,878 $13,154 $5,250 $5,679 $10,929 $16,166 $19,017 $35,183 $14,301 $16,269 $30,570 
U.S. plus international may not equal total due to rounding.
(1)    Alliance revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs (see Note 4).
(2)    Alliance revenue represents Merck’s share of profits from sales in Bayer’s marketing territories, which are product sales net of cost of sales and commercialization costs (see Note 4).
(3)    Other pharmaceutical primarily reflects sales of other human health pharmaceutical products, including products within the franchises not listed separately.
(4)    Represents sales for the Healthcare Services segment. All the businesses in the Healthcare Services segment were fully divested in the first quarter of 2020.
(5)    Other is primarily comprised of miscellaneous corporate revenues, including revenue hedging activities, as well as third-party manufacturing sales. Other for the three and nine months ended September 30, 2021 also includes $135 million and $185 million, respectively, related to the achievement of milestones for an out-licensed product that triggered contingent payments to Merck.
Consolidated Sales by Geographic Area
Consolidated sales by geographic area where derived are as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
United States$6,276 $5,250 $16,166 $14,301 
Europe, Middle East and Africa3,342 2,946 9,912 8,537 
China1,307 791 3,004 2,060 
Japan638 671 1,929 1,875 
Asia Pacific (other than China and Japan)613 545 1,782 1,560 
Latin America599 499 1,631 1,374 
Other379 227 759 863 
 $13,154 $10,929 $35,183 $30,570 
Reconciliation of Segment Profits to Income before Taxes
A reconciliation of segment profits to Income from Continuing Operations Before Taxes is as follows:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
($ in millions)2021202020212020
Segment profits:
Pharmaceutical segment$8,606 $7,026 $22,450 $19,235 
Animal Health segment505 459 1,629 1,347 
Other segment— (1)— 1 
Total segment profits9,111 7,484 24,079 20,583 
Other profits141 (28)29 135 
Unallocated:
Interest income7 9 27 48 
Interest expense(196)(203)(597)(624)
Amortization(360)(406)(1,231)(1,393)
Depreciation(358)(367)(1,031)(1,105)
Research and development(2,312)(3,231)(8,775)(7,251)
Restructuring costs(107)(113)(487)(265)
Other unallocated, net(660)(439)(2,044)(1,720)
 $5,266 $2,706 $9,970 $8,408 
v3.21.2
Spin-Off of Organon & Co. - Narrative (Details)
shares in Thousands, $ in Millions
 3 Months Ended 9 Months Ended
Jun. 02, 2021
USD ($)
shares
Sep. 30, 2020
USD ($)
Sep. 30, 2021
USD ($)
Sep. 30, 2020
USD ($)
Dec. 31, 2020
USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Consideration received $ 9,000.0        
Disposal group, other expense   $ 193.0 $ 556.0 $ 483.0  
Disposal group, including discontinued operations, liabilities 5,100.0        
Disposal group, including discontinued operations, debt 9,400.0        
Disposal group, including discontinued operations, goodwill 1,400.0       $ 1,356.0
Disposal group, including discontinued operations, property, plant and equipment 981.0       986.0
Disposal group, including discontinued operation, cash 929.0        
Disposal group, including discontinued operations, inventory 815.0       756.0
Disposal group, including discontinued operations, other intangible assets 519.0       $ 503.0
Disposal group, including discontinued operation, other net liabilities $ 328.0        
Spinoff transaction     5,091.0    
Stock options, converted awards (in shares) | shares 1,900        
Accumulated Other Comprehensive Loss          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Spinoff transaction $ 449.0   449.0    
Foreign Currency Translation Adjustment          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Spinoff transaction 421.0   421.0    
Employee Benefit Plans          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Spinoff transaction 28.0   28.0    
Other Paid-In Capital          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Spinoff transaction $ 4,600.0   4,643.0    
Restricted Stock Units (RSUs)          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Equity instruments other than options, converted awards (in shares) | shares 1,300        
Performance Share Units (PSUs)          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Equity instruments other than options, converted awards (in shares) | shares 248        
Organon & Co.          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Stock conversion ratio 0.1        
Due from related parties, current     1,400.0    
Due to related parties, current     $ 930.0    
Maximum | Transition services agreement          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Period of continuing involvement after disposal 25 months        
Maximum | Manufacturing and supply agreements          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Period of continuing involvement after disposal 10 years        
Minimum | Manufacturing and supply agreements          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Period of continuing involvement after disposal 4 years        
Organon & Co.          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Face amount of debt $ 9,500.0        
v3.21.2
Spin-Off of Organon & Co. - Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract]        
Sales   $ 1,622 $ 2,512 $ 4,911
Costs, Expenses and Other        
Cost of sales   468 789 1,362
Selling, general and administrative   390 877 1,046
Research and development   41 103 113
Restructuring costs   1 1 4
Other (income) expense, net   0 (15) 7
Operating expenses   900 1,755 2,532
Income from discontinued operations before taxes   722 757 2,379
Tax provision (benefit)   103 (12) 343
Income from discontinued operations, net of taxes   619 769 2,036
Less: Income of discontinued operations attributable to noncontrolling interests   2 3 11
Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests $ 0 $ 617 $ 766 $ 2,025
v3.21.2
Spin-Off of Organon & Co. - Assets and Liabilities of Discontinued Operations (Details) - USD ($)
$ in Millions
Sep. 30, 2021
Jun. 02, 2021
Dec. 31, 2020
Discontinued Operations and Disposal Groups [Abstract]      
Cash and cash equivalents     $ 12
Accounts receivable, less allowance for doubtful accounts     1,048
Inventories   $ 815 756
Other current assets     867
Current assets of discontinued operations $ 0   2,683
Property, plant and equipment, net   981 986
Goodwill   1,400 1,356
Other intangibles, net   $ 519 503
Other assets     330
Noncurrent Assets of Discontinued Operations 0   3,175
Trade accounts payable     267
Accrued and other current liabilities     841
Income taxes payable     (22)
Current liabilities of discontinued operations 0   1,086
Deferred income taxes     10
Other noncurrent liabilities     176
Noncurrent Liabilities of Discontinued Operations $ 0   $ 186
v3.21.2
Acquisitions, Research Collaborations and License Agreements - Narrative (Details)
$ / shares in Units, € in Millions, shares in Millions, $ in Millions
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Apr. 30, 2021
USD ($)
Mar. 31, 2021
USD ($)
Jan. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Oct. 31, 2020
USD ($)
Sep. 30, 2020
USD ($)
$ / shares
shares
Sep. 30, 2020
EUR (€)
Jul. 31, 2020
USD ($)
Jun. 30, 2020
USD ($)
Jan. 31, 2020
USD ($)
Dec. 31, 2021
USD ($)
$ / shares
Sep. 30, 2021
USD ($)
Dec. 31, 2020
USD ($)
Sep. 30, 2020
USD ($)
$ / shares
shares
Sep. 30, 2021
USD ($)
Sep. 30, 2020
USD ($)
$ / shares
shares
Dec. 31, 2020
USD ($)
Jan. 16, 2020
USD ($)
Dec. 31, 2019
USD ($)
Business Acquisition [Line Items]                                      
Research and development                       $ 2,445.0   $ 3,349.0 $ 9,177.0 $ 7,609.0      
Reduction to research and development expenses         $ 6.0                            
Contingent consideration       $ 841.0   $ 829.0           902.0 $ 841.0 829.0 902.0 829.0 $ 841.0   $ 767.0
Goodwill       18,882.0               18,862.0 18,882.0   18,862.0   18,882.0    
Decrease in contingent consideration liability                             (73.0) (71.0)      
Inventories       5,554.0               $ 5,603.0 5,554.0   5,603.0   5,554.0    
Pandion Therapeutics                                      
Business Acquisition [Line Items]                                      
Consideration transferred, asset acquisition $ 1,900.0                                    
Transaction cost, asset acquisition 147.0                                    
Research and development                             1,700.0        
OncoImmune                                      
Business Acquisition [Line Items]                                      
Consideration transferred, asset acquisition       423.0                              
Net assets (liabilities)       (22.0)                 $ (22.0)       $ (22.0)    
Amount paid for investment       $ 50.0                              
Ownership percentage       20.00%                 20.00%       20.00%    
Value of investment       $ 33.0                 $ 33.0       $ 33.0    
Premium on shares acquired       17.0                              
Research and development expenses                                 462.0    
Dunboyne                                      
Business Acquisition [Line Items]                                      
Consideration transferred, asset acquisition           302.0 € 256                        
Net assets (liabilities)           13.0               13.0   13.0      
Property, plant and equipment           289.0               289.0   289.0      
Research and development                                      
Business Acquisition [Line Items]                                      
Premium on shares acquired           22.0                          
COVID-19                                      
Business Acquisition [Line Items]                                      
Charges related to program discontinuation                             $ 207.0        
Sentinel                                      
Business Acquisition [Line Items]                                      
Consideration transferred, asset acquisition               $ 410.0                      
Inventories               9.0                      
Sentinel | Technology Rights                                      
Business Acquisition [Line Items]                                      
Acquired intangible assets               $ 401.0                      
Acceleron Pharma Inc. | Forecast                                      
Business Acquisition [Line Items]                                      
Share price in acquisition of business (in dollars per share) | $ / shares                     $ 180                
Payment to acquire business                     $ 11,500.0                
Termination fee to be paid by acquiree in acquisition of business                     345.0                
Acceleron Pharma Inc. | Minimum | Forecast                                      
Business Acquisition [Line Items]                                      
Reverse termination fee in acquisition of business                     650.0                
Acceleron Pharma Inc. | Maximum | Forecast                                      
Business Acquisition [Line Items]                                      
Reverse termination fee in acquisition of business                     $ 750.0                
Pandion Therapeutics                                      
Business Acquisition [Line Items]                                      
Net assets (liabilities) $ 156.0                                    
Themis                                      
Business Acquisition [Line Items]                                      
Payment to acquire business                 $ 366.0                    
Contingent consideration, maximum                 740.0                    
Contingent consideration                 85.0                    
In-process research and development                 113.0                    
Cash and cash equivalents                 59.0                    
Deferred tax assets                 72.0                    
Other assets (liabilities), net                 (32.0)                    
Goodwill                 $ 239.0                    
Future milestone payments                                 450.0    
Themis | COVID-19                                      
Business Acquisition [Line Items]                                      
Impairment charge                         90.0            
Decrease in contingent consideration liability                         45.0            
ArQule                                      
Business Acquisition [Line Items]                                      
Payment to acquire business                   $ 2,700.0                  
In-process research and development                                   $ 2,280.0  
Cash and cash equivalents                                   145.0  
Other assets (liabilities), net                                   34.0  
Goodwill                                   $ 512.0  
Share-based compensation payments attributable to precombination service                   138.0                  
Transaction costs                   $ 95.0                  
Development Milestones | Themis                                      
Business Acquisition [Line Items]                                      
Contingent consideration, maximum       60.0                 60.0       60.0    
Regulatory Milestones | Themis                                      
Business Acquisition [Line Items]                                      
Contingent consideration, maximum       196.0                 196.0       196.0    
Sales-Based Milestones | Themis                                      
Business Acquisition [Line Items]                                      
Contingent consideration, maximum       $ 194.0                 $ 194.0       $ 194.0    
Gilead Sciences | oral and injectable formulations programs | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement                                      
Business Acquisition [Line Items]                                      
Profit share by counterparty   60.00%                                  
Profit share   40.00%                                  
Gilead Sciences | oral formulation | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement                                      
Business Acquisition [Line Items]                                      
Profit share by counterparty   65.00%                                  
Profit share   35.00%                                  
Sales threshold   $ 2,000.0                                  
Gilead Sciences | injectable formulation | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement                                      
Business Acquisition [Line Items]                                      
Profit share by counterparty   65.00%                                  
Profit share   35.00%                                  
Sales threshold   $ 3,500.0                                  
Artiva Biotherapeutics, Inc. | Licensing Agreements                                      
Business Acquisition [Line Items]                                      
Upfront and milestone payments     $ 30.0                                
Upfront and milestone payments to be made     $ 15.0                                
Artiva Biotherapeutics, Inc. | Minimum | Licensing Agreements                                      
Business Acquisition [Line Items]                                      
Royalty rate     7.00%                                
Artiva Biotherapeutics, Inc. | Maximum | Licensing Agreements                                      
Business Acquisition [Line Items]                                      
Royalty rate     14.00%                                
Artiva Biotherapeutics, Inc. | Development Milestones | Licensing Agreements                                      
Business Acquisition [Line Items]                                      
Contingent milestone payments collaborative arrangement     $ 217.5                                
Artiva Biotherapeutics, Inc. | Regulatory Milestones | Licensing Agreements                                      
Business Acquisition [Line Items]                                      
Contingent milestone payments collaborative arrangement     570.0                                
Artiva Biotherapeutics, Inc. | Sales-Based Milestones | Licensing Agreements                                      
Business Acquisition [Line Items]                                      
Contingent milestone payments collaborative arrangement     $ 1,050.0                                
Seagen                                      
Business Acquisition [Line Items]                                      
Research and development                           $ 622.0   $ 622.0      
Upfront and milestone payments           600.0                          
Contingent milestone payments collaborative arrangement           2,600.0                          
Amount paid for investment           $ 1,000.0                          
Number of shares acquired through equity investment | shares           5               5   5      
Share price (in dollars per share) | $ / shares           $ 200               $ 200   $ 200      
Seagen | Tukysa                                      
Business Acquisition [Line Items]                                      
Upfront and milestone payments                           $ 210.0   $ 210.0      
Seagen | Tukysa | Minimum                                      
Business Acquisition [Line Items]                                      
Royalty rate           20.00% 20.00%                        
Seagen | Tukysa | Maximum                                      
Business Acquisition [Line Items]                                      
Royalty rate           33.00% 33.00%                        
Seagen | Development Milestones                                      
Business Acquisition [Line Items]                                      
Contingent milestone payments collaborative arrangement           $ 850.0                          
Seagen | Regulatory Milestones | Tukysa                                      
Business Acquisition [Line Items]                                      
Contingent milestone payments collaborative arrangement           65.0                          
Seagen | Sales-Based Milestones                                      
Business Acquisition [Line Items]                                      
Contingent milestone payments collaborative arrangement           $ 1,750.0                          
Sentinel | Technology Rights                                      
Business Acquisition [Line Items]                                      
Weighted average useful life of acquired finite-lived intangible assets               15 years                      
v3.21.2
Acquisitions, Research Collaborations and License Agreements - Fair Values of Assets Acquired and Liabilities Assumed (Details)
$ in Millions
Sep. 30, 2021
USD ($)
Dec. 31, 2020
USD ($)
Jan. 16, 2020
USD ($)
Business Acquisition [Line Items]      
Goodwill $ 18,862 $ 18,882  
ArQule      
Business Acquisition [Line Items]      
Cash and cash equivalents     $ 145
IPR&D MK-1026 (formerly ARQ 531)     2,280
Licensing arrangement for ARQ 087     80
Deferred income tax liabilities     (361)
Other assets (liabilities), net     34
Total identifiable net assets     2,178
Goodwill     512
Consideration transferred     $ 2,690
ArQule | Measurement Input, Discount Rate      
Business Acquisition [Line Items]      
Present value discount rate     0.125
v3.21.2
Collaborative Arrangements - Narrative (Details) - USD ($)
$ in Millions
 1 Months Ended 3 Months Ended 9 Months Ended
Mar. 31, 2021
Sep. 30, 2021
Sep. 30, 2021
Sep. 30, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]        
Amortization     $ 1,231 $ 1,393
Lynparza | Other Noncurrent Assets        
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]        
Finite-lived intangible assets   $ 1,100 1,100  
Lenvima | Other Noncurrent Assets        
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]        
Finite-lived intangible assets   1,000 1,000  
Verquvo        
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]        
Amortization     153  
Verquvo | Other Intangible Assets        
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]        
Finite-lived intangible assets   72 72  
Adempas | Other Intangible Assets        
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]        
Finite-lived intangible assets   869 869  
AstraZeneca | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | Lynparza        
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]        
Milestone payments accrued but not yet paid   400 400  
Potential future sales-based milestone payments   2,700 2,700  
Potential future regulatory milestone payments   1,400 1,400  
Eisai        
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]        
License option payment related to collaborative arrangement $ 125      
Eisai | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | Lenvima        
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]        
Milestone payments accrued but not yet paid   600 600  
Potential future sales-based milestone payments   2,600 2,600  
Potential future regulatory milestone payments   50 50  
Sales-based milestone payments     $ 200  
Eisai | Regulatory Milestones | Lenvima        
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]        
Capitalized milestone payment   $ 75    
Bayer AG | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement        
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]        
Milestone payments accrued but not yet paid 400      
Liabilities $ 400      
v3.21.2
Collaborative Arrangements - Financial Information (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Dec. 31, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Sales $ 13,154 $ 10,929 $ 35,183 $ 30,570  
Cost of sales 3,450 3,013 9,752 8,589  
Selling, general and administrative 2,336 2,060 6,804 6,336  
Research and development 2,445 3,349 9,177 7,609  
Payables included in Accrued and other liabilities 23,728   23,728   $ 27,327
Other current assets | AstraZeneca | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Receivables included in Other current assets 248   248   215
Other current assets | Eisai | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Receivables included in Other current assets 223   223   157
Other current assets | Bayer AG | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Receivables included in Other current assets 139   139   65
Accounts Payable and Accrued Liabilities | AstraZeneca | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Payables included in Accrued and other liabilities 415   415   423
Accounts Payable and Accrued Liabilities | Eisai | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Payables included in Accrued and other liabilities 600   600   335
Accounts Payable and Accrued Liabilities | Bayer AG | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Payables included in Accrued and other liabilities 467   467   0
Other Noncurrent Liabilities | Eisai | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Payables included in Other Noncurrent Liabilities 0   0   $ 600
Revenue | AstraZeneca | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Alliance revenue - profit sharing 252 199 741 522  
Revenue | AstraZeneca | Collaborative Arrangement | Alliance revenue - Lynparza          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Alliance revenue - profit sharing 246 196 721 519  
Revenue | AstraZeneca | Collaborative Arrangement | Alliance revenue - Koselugo          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Alliance revenue - profit sharing 6 3 20 3  
Revenue | Eisai | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Alliance revenue - profit sharing 188 142 498 421  
Revenue | Bayer AG | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Alliance revenue - profit sharing 100 83 248 216  
Sales 161 138 439 383  
Revenue | Bayer AG | Collaborative Arrangement | Adempas          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Net sales by Merck 59 55 188 167  
Revenue | Bayer AG | Collaborative Arrangement | Verquvo          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Net sales by Merck 2 0 3 0  
Cost of sales | AstraZeneca | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Cost of sales 42 41 125 205  
Cost of sales | Eisai | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Cost of sales 49 46 143 215  
Cost of sales | Bayer AG | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Cost of sales 53 81 328 229  
Amortization of intangible assets     153    
Selling, general and administrative | AstraZeneca | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Selling, general and administrative 44 40 127 112  
Selling, general and administrative | Eisai | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Selling, general and administrative 34 18 88 48  
Selling, general and administrative | Bayer AG | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Selling, general and administrative 31 12 84 32  
Research and development | AstraZeneca | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Research and development 27 20 87 93  
Research and development | Eisai | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Research and development 43 48 165 168  
Research and development | Bayer AG | Collaborative Arrangement          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Research and development $ 16 $ 12 $ 36 $ 53  
v3.21.2
Restructuring - Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]          
Expected restructuring and related cost $ 3,000   $ 3,000    
Estimate of cumulative pre tax costs that will result in cash outlays     70.00%    
Estimate of cumulative pre tax costs that will be noncash     30.00%    
Total pretax restructuring costs 168 $ 185 $ 630 $ 500  
Cumulative costs since program inception $ 2,400   $ 2,400    
Forecast          
Restructuring Cost and Reserve [Line Items]          
Expected restructuring and related cost         $ 700
v3.21.2
Restructuring - Charges Activities by Type of Cost (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs $ 168 $ 185 $ 630 $ 500
Separation Costs        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 17 61 310 143
Accelerated Depreciation        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 22 66 60 192
Other        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 129 58 260 165
Cost of sales        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 48 38 113 131
Cost of sales | Separation Costs        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 0 0 0 0
Cost of sales | Accelerated Depreciation        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 11 33 32 89
Cost of sales | Other        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 37 5 81 42
Selling, general and administrative        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 5 15 9 37
Selling, general and administrative | Separation Costs        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 0 0 0 0
Selling, general and administrative | Accelerated Depreciation        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 4 15 8 37
Selling, general and administrative | Other        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 1 0 1 0
Research and development        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 8 19 21 67
Research and development | Separation Costs        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 0 0 0 0
Research and development | Accelerated Depreciation        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 7 18 20 66
Research and development | Other        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 1 1 1 1
Restructuring costs        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 107 113 487 265
Restructuring costs | Separation Costs        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 17 61 310 143
Restructuring costs | Accelerated Depreciation        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs 0 0 0 0
Restructuring costs | Other        
Restructuring Cost and Reserve [Line Items]        
Total pretax restructuring costs $ 90 $ 52 $ 177 $ 122
v3.21.2
Restructuring - Activities by Program (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Restructuring Reserve [Roll Forward]        
Restructuring reserve, beginning balance     $ 586  
Expense $ 168 $ 185 630 $ 500
(Payments) receipts, net     (460)  
Non-cash activity     (144)  
Restructuring reserve, ending balance 612   612  
Separation Costs        
Restructuring Reserve [Roll Forward]        
Restructuring reserve, beginning balance     567  
Expense 17 61 310 143
(Payments) receipts, net     (305)  
Non-cash activity     0  
Restructuring reserve, ending balance 572   572  
Accelerated Depreciation        
Restructuring Reserve [Roll Forward]        
Restructuring reserve, beginning balance     0  
Expense 22 66 60 192
(Payments) receipts, net     0  
Non-cash activity     (60)  
Restructuring reserve, ending balance 0   0  
Other        
Restructuring Reserve [Roll Forward]        
Restructuring reserve, beginning balance     19  
Expense 129 $ 58 260 $ 165
(Payments) receipts, net     (155)  
Non-cash activity     (84)  
Restructuring reserve, ending balance $ 40   $ 40  
v3.21.2
Financial Instruments - Narrative (Details)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2021
USD ($)
interest_rate_swap
Sep. 30, 2021
USD ($)
interest_rate_swap
Sep. 30, 2020
USD ($)
Dec. 31, 2020
USD ($)
Jan. 31, 2021
USD ($)
interest_rate_swap
Derivative [Line Items]          
Total swap notional amount $ 28,458,000,000 $ 28,458,000,000   $ 32,784,000,000  
Pretax net unrealized gains on derivatives maturing within next 12 months estimated to be reclassified from AOCI to sales   55,000,000      
Equity investments without readily determinable fair values 578,000,000 578,000,000 $ 508,000,000    
Unrealized gains recognized on investments in equity securities without readily determinable fair value   104,000,000 21,000,000    
Unrealized losses recognized on investments in equity securities without readily determinable fair values   1,000,000 $ 3,000,000    
Cumulative unrealized gains on investments 229,000,000 229,000,000      
Cumulative unrealized losses on investments 7,000,000 7,000,000      
Fair value of loans payable and long-term debt, including current portion 29,100,000,000 29,100,000,000   36,000,000,000  
Debt, carrying amount 26,400,000,000 26,400,000,000   31,800,000,000  
Factored accounts receivable 2,400,000,000     2,100,000,000  
Cash collateral received from counterparties 65,000,000 65,000,000   0  
Cash collateral advanced to counterparties 0 0   36,000,000  
Level 2          
Derivative [Line Items]          
Cash equivalents 9,200,000,000 9,200,000,000   6,800,000,000  
Derivatives Designated as Hedging Instruments          
Derivative [Line Items]          
Total swap notional amount 12,603,000,000 $ 12,603,000,000   13,714,000,000  
Derivatives Designated as Hedging Instruments | Maximum          
Derivative [Line Items]          
Maximum average period of maturities of contracts in years (less than)   2 years      
Derivatives Not Designated as Hedging Instruments          
Derivative [Line Items]          
Total swap notional amount $ 15,855,000,000 $ 15,855,000,000   $ 19,070,000,000  
Derivatives Not Designated as Hedging Instruments | Maximum          
Derivative [Line Items]          
Maximum average period of maturities of contracts in years (less than)   1 year      
3.875% Notes Due 2021 [Member]          
Derivative [Line Items]          
Face amount of debt         $ 1,150,000,000
Stated interest rate         3.875%
Interest rate swap contracts          
Derivative [Line Items]          
Number of interest rate swaps held (in interest rate swaps) | interest_rate_swap 9 9     5
Total swap notional amount         $ 1,150,000,000
v3.21.2
Financial Instruments - Effect of Net Investment Hedges (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Foreign exchange contracts        
Derivative Instruments, Gain (Loss) [Line Items]        
Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income $ 1 $ 10 $ (27) $ 15
Foreign exchange contracts | Other (income) expense, net        
Derivative Instruments, Gain (Loss) [Line Items]        
Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing (4) (4) (12) (15)
Euro-denominated notes        
Derivative Instruments, Gain (Loss) [Line Items]        
Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income (77) 162 (199) 182
Euro-denominated notes | Other (income) expense, net        
Derivative Instruments, Gain (Loss) [Line Items]        
Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing $ 0 $ 0 $ 0 $ 0
v3.21.2
Financial Instruments - Summary of Interest Rate Swaps Held (Details)
Sep. 30, 2021
USD ($)
interest_rate_swap
Jan. 31, 2021
USD ($)
interest_rate_swap
Dec. 31, 2020
USD ($)
Derivative [Line Items]      
Total swap notional amount $ 28,458,000,000   $ 32,784,000,000
Interest rate swap contracts      
Derivative [Line Items]      
Number of Interest Rate Swaps Held (in interest rate swaps) | interest_rate_swap 9 5  
Total swap notional amount   $ 1,150,000,000  
2.40% notes due 2022 | Interest rate swap contracts      
Derivative [Line Items]      
Stated interest rate 2.40%    
Par Value of Debt $ 1,000,000,000    
Number of Interest Rate Swaps Held (in interest rate swaps) | interest_rate_swap 4    
Total swap notional amount $ 1,000,000,000    
2.35% notes due 2022 | Interest rate swap contracts      
Derivative [Line Items]      
Stated interest rate 2.35%    
Par Value of Debt $ 1,250,000,000    
Number of Interest Rate Swaps Held (in interest rate swaps) | interest_rate_swap 5    
Total swap notional amount $ 1,250,000,000    
v3.21.2
Financial Instruments - Fair Value Hedges (Details) - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
Loans payable and current portion of long-term debt    
Derivative Instruments and Hedging Activities Disclosures [Line Items]    
Carrying Amount of Hedged Liabilities $ 2,274 $ 1,150
Cumulative Amount of Fair Value Hedging Adjustment Increase (Decrease) Included in the Carrying Amount 25 0
Long-Term Debt    
Derivative Instruments and Hedging Activities Disclosures [Line Items]    
Carrying Amount of Hedged Liabilities 0 2,301
Cumulative Amount of Fair Value Hedging Adjustment Increase (Decrease) Included in the Carrying Amount $ 0 $ 53
v3.21.2
Financial Instruments - Fair Value of Derivatives Segregated between those Derivatives that are Designated as Hedging Instruments and those that are Not Designated as Hedging Instruments (Details) - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
Derivatives, Fair Value [Line Items]    
Fair Value of Derivative, Asset $ 377 $ 182
Fair Value of Derivative, Liability 133 525
U.S Dollar Notional Amount 28,458 32,784
Derivatives Designated as Hedging Instruments    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivative, Asset 295 112
Fair Value of Derivative, Liability 16 218
U.S Dollar Notional Amount 12,603 13,714
Derivatives Not Designated as Hedging Instruments    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivative, Asset 82 70
Fair Value of Derivative, Liability 117 307
U.S Dollar Notional Amount 15,855 19,070
Interest Rate Contract | Derivatives Designated as Hedging Instruments | Other current assets    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivative, Asset 26 1
U.S Dollar Notional Amount 2,250 1,150
Interest Rate Contract | Derivatives Designated as Hedging Instruments | Other Assets    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivative, Asset   54
U.S Dollar Notional Amount 0 2,250
Foreign exchange contracts | Derivatives Designated as Hedging Instruments | Other current assets    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivative, Asset 224 12
U.S Dollar Notional Amount 7,138 3,183
Foreign exchange contracts | Derivatives Designated as Hedging Instruments | Other Assets    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivative, Asset 45 45
U.S Dollar Notional Amount 1,469 2,030
Foreign exchange contracts | Derivatives Designated as Hedging Instruments | Accrued and other current liabilities    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivative, Liability 15 217
U.S Dollar Notional Amount 1,601 5,049
Foreign exchange contracts | Derivatives Designated as Hedging Instruments | Other Noncurrent Liabilities    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivative, Liability 1 1
U.S Dollar Notional Amount 145 52
Foreign exchange contracts | Derivatives Not Designated as Hedging Instruments | Other current assets    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivative, Asset 82 70
U.S Dollar Notional Amount 6,333 7,260
Foreign exchange contracts | Derivatives Not Designated as Hedging Instruments | Accrued and other current liabilities    
Derivatives, Fair Value [Line Items]    
Fair Value of Derivative, Liability 117 307
U.S Dollar Notional Amount $ 9,522 $ 11,810
v3.21.2
Financial Instruments - Information on Derivative Positions Subject to Master Netting Arrangements as if they were Presented on a Net Basis (Details) - USD ($)
Sep. 30, 2021
Dec. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]    
Gross amounts recognized in the consolidated balance sheet, asset $ 377,000,000 $ 182,000,000
Gross amount subject to offset in master netting arrangements not offset in the condensed balance sheet, asset (120,000,000) (156,000,000)
Cash collateral received, asset (65,000,000) 0
Net amounts, asset 192,000,000 26,000,000
Gross amounts recognized in the consolidated balance sheet, liability 133,000,000 525,000,000
Gross amount subject to offset in master netting arrangements not offset in the condensed balance sheet, liability (120,000,000) (156,000,000)
Cash collateral received, liability 0 (36,000,000)
Net amounts, liability $ 13,000,000 $ 333,000,000
v3.21.2
Financial Instruments - Location and Amount of Pretax (Gains) Losses of Derivatives (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Derivative Instruments, Gain (Loss) [Line Items]        
Sales $ 13,154 $ 10,929 $ 35,183 $ 30,570
Other (income) expense, net (450) (312) (1,007) (637)
Other comprehensive income (loss) 38 10 1,595 (190)
Interest rate swap contracts        
Derivative Instruments, Gain (Loss) [Line Items]        
Amount of gain (loss) recognized in OCI on derivatives 0 (1) (2) (3)
Interest rate swap contracts | Other (income) expense, net        
Derivative Instruments, Gain (Loss) [Line Items]        
Hedged items (9) (14) (29) 54
Derivatives designated as hedging instruments (1) 0 (1) (76)
Amount of gain recognized in Other (income) expense, net on derivatives 0 (1) (2) (3)
Foreign exchange contracts        
Derivative Instruments, Gain (Loss) [Line Items]        
Amount of gain (loss) recognized in OCI on derivatives 72 (195) 193 (126)
(Decrease) increase in Sales as a result of AOCL reclassifications 36 23 219 (65)
Foreign exchange contracts | Reclassification out of Accumulated Other Comprehensive Income | Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest        
Derivative Instruments, Gain (Loss) [Line Items]        
Sales $ (36) $ (23) $ (219) $ 65
v3.21.2
Financial Instruments - Income Statement Effects on Derivatives Not Designated as Hedging Instruments (Details) - USD ($)
$ in Millions
 1 Months Ended 3 Months Ended 9 Months Ended
Oct. 31, 2020
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Derivative Instruments, Gain (Loss) [Line Items]          
Amount of Derivative Pretax (Gain) Loss Recognized in Income $ (6)        
Currency Swap | Other (income) expense, net          
Derivative Instruments, Gain (Loss) [Line Items]          
Amount of Derivative Pretax (Gain) Loss Recognized in Income   $ 18 $ (7) $ 234 $ (138)
Foreign Exchange Future | Sales          
Derivative Instruments, Gain (Loss) [Line Items]          
Amount of Derivative Pretax (Gain) Loss Recognized in Income   (4) 7 6 4
Interest Rate Contract | Other (income) expense, net          
Derivative Instruments, Gain (Loss) [Line Items]          
Amount of Derivative Pretax (Gain) Loss Recognized in Income   0 0 0 9
Forward Contracts | Research and development          
Derivative Instruments, Gain (Loss) [Line Items]          
Amount of Derivative Pretax (Gain) Loss Recognized in Income   $ 0 $ 22 $ 0 $ 22
v3.21.2
Financial Instruments - Information on Available-for-sale Investments (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]          
Debt securities, amortized cost $ 89   $ 89   $ 89
Debt securities, unrealized gains 0   0   0
Debt securities, unrealized losses 0   0   0
Debt securities, fair value 89   89   89
Publicly traded equity securities, fair value 1,915   1,915   1,787
Total debt and publicly traded equity securities, fair value 2,004   2,004   1,876
Unrealized net (losses) gains 90 $ 43 (109) $ 512  
U.S. government and agency securities          
Debt Securities, Available-for-sale [Line Items]          
Debt securities, amortized cost 83   83   84
Debt securities, unrealized gains 0   0   0
Debt securities, unrealized losses 0   0   0
Debt securities, fair value 83   83   84
Corporate notes and bonds          
Debt Securities, Available-for-sale [Line Items]          
Debt securities, amortized cost 4   4   0
Debt securities, unrealized gains 0   0   0
Debt securities, unrealized losses 0   0   0
Debt securities, fair value 4   4   0
Foreign government bonds          
Debt Securities, Available-for-sale [Line Items]          
Debt securities, amortized cost 2   2   5
Debt securities, unrealized gains 0   0   0
Debt securities, unrealized losses 0   0   0
Debt securities, fair value $ 2   $ 2   $ 5
v3.21.2
Financial Instruments - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
Sep. 30, 2020
Dec. 31, 2019
Assets        
Foreign government bonds $ 89 $ 89    
Publicly traded equity securities 1,915 1,787    
Derivative assets 377 182    
Liabilities        
Contingent consideration 902 841 $ 829 $ 767
Derivative liabilities 133 525    
Foreign government bonds        
Assets        
Foreign government bonds 2 5    
U.S. government and agency securities        
Assets        
Foreign government bonds 83 84    
Corporate notes and bonds        
Assets        
Foreign government bonds 4 0    
Fair Value, Measurements, Recurring        
Assets        
Investments 435 785    
Other assets 1,569 1,091    
Derivative assets 377 182    
Total assets 2,381 2,058    
Liabilities        
Contingent consideration 902 841    
Derivative liabilities 133 525    
Total liabilities 1,035 1,366    
Fair Value, Measurements, Recurring | Foreign exchange contracts        
Assets        
Derivative assets 230 90    
Liabilities        
Derivative liabilities 132 505    
Fair Value, Measurements, Recurring | Interest rate swaps        
Assets        
Derivative assets 26 55    
Fair Value, Measurements, Recurring | Currency options        
Assets        
Derivative assets 121 37    
Liabilities        
Derivative liabilities 1 20    
Fair Value, Measurements, Recurring | Level 1        
Assets        
Investments 433 780    
Other assets 1,569 1,091    
Derivative assets 0 0    
Total assets 2,002 1,871    
Liabilities        
Contingent consideration 0 0    
Derivative liabilities 0 0    
Total liabilities 0 0    
Fair Value, Measurements, Recurring | Level 1 | Foreign exchange contracts        
Assets        
Derivative assets 0 0    
Liabilities        
Derivative liabilities 0 0    
Fair Value, Measurements, Recurring | Level 1 | Interest rate swaps        
Assets        
Derivative assets 0 0    
Fair Value, Measurements, Recurring | Level 1 | Currency options        
Assets        
Derivative assets 0 0    
Liabilities        
Derivative liabilities 0 0    
Fair Value, Measurements, Recurring | Level 2        
Assets        
Investments 2 5    
Other assets 0 0    
Derivative assets 377 182    
Total assets 379 187    
Liabilities        
Contingent consideration 0 0    
Derivative liabilities 133 525    
Total liabilities 133 525    
Fair Value, Measurements, Recurring | Level 2 | Foreign exchange contracts        
Assets        
Derivative assets 230 90    
Liabilities        
Derivative liabilities 132 505    
Fair Value, Measurements, Recurring | Level 2 | Interest rate swaps        
Assets        
Derivative assets 26 55    
Fair Value, Measurements, Recurring | Level 2 | Currency options        
Assets        
Derivative assets 121 37    
Liabilities        
Derivative liabilities 1 20    
Fair Value, Measurements, Recurring | Level 3        
Assets        
Investments 0 0    
Other assets 0 0    
Derivative assets 0 0    
Total assets 0 0    
Liabilities        
Contingent consideration 902 841    
Derivative liabilities 0 0    
Total liabilities 902 841    
Fair Value, Measurements, Recurring | Level 3 | Foreign exchange contracts        
Assets        
Derivative assets 0 0    
Liabilities        
Derivative liabilities 0 0    
Fair Value, Measurements, Recurring | Level 3 | Interest rate swaps        
Assets        
Derivative assets 0 0    
Fair Value, Measurements, Recurring | Level 3 | Currency options        
Assets        
Derivative assets 0 0    
Liabilities        
Derivative liabilities 0 0    
Fair Value, Measurements, Recurring | Foreign government bonds        
Assets        
Foreign government bonds 2 5    
Fair Value, Measurements, Recurring | Foreign government bonds | Level 1        
Assets        
Foreign government bonds 0 0    
Fair Value, Measurements, Recurring | Foreign government bonds | Level 2        
Assets        
Foreign government bonds 2 5    
Fair Value, Measurements, Recurring | Foreign government bonds | Level 3        
Assets        
Foreign government bonds 0 0    
Fair Value, Measurements, Recurring | Publicly traded equity securities        
Assets        
Publicly traded equity securities 433 780    
Other assets 1,482 1,007    
Fair Value, Measurements, Recurring | Publicly traded equity securities | Level 1        
Assets        
Publicly traded equity securities 433 780    
Other assets 1,482 1,007    
Fair Value, Measurements, Recurring | Publicly traded equity securities | Level 2        
Assets        
Publicly traded equity securities 0 0    
Other assets 0 0    
Fair Value, Measurements, Recurring | Publicly traded equity securities | Level 3        
Assets        
Publicly traded equity securities 0 0    
Other assets 0 0    
Fair Value, Measurements, Recurring | U.S. government and agency securities        
Assets        
Other assets 83 84    
Fair Value, Measurements, Recurring | U.S. government and agency securities | Level 1        
Assets        
Other assets 83 84    
Fair Value, Measurements, Recurring | U.S. government and agency securities | Level 2        
Assets        
Other assets 0 0    
Fair Value, Measurements, Recurring | U.S. government and agency securities | Level 3        
Assets        
Other assets 0 0    
Fair Value, Measurements, Recurring | Corporate notes and bonds        
Assets        
Other assets 4 0    
Fair Value, Measurements, Recurring | Corporate notes and bonds | Level 1        
Assets        
Other assets 4 0    
Fair Value, Measurements, Recurring | Corporate notes and bonds | Level 2        
Assets        
Other assets 0 0    
Fair Value, Measurements, Recurring | Corporate notes and bonds | Level 3        
Assets        
Other assets $ 0 $ 0    
v3.21.2
Financial Instruments - Information About Changes in Liabilities for Contingent Consideration (Details)
$ in Millions
 3 Months Ended 9 Months Ended
Dec. 31, 2020
USD ($)
Sep. 30, 2021
USD ($)
Sep. 30, 2020
USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]      
Fair value, beginning balance $ 829 $ 841 $ 767
Additions   0 97
Changes in estimated fair value   73 71
Payments   0 (106)
Other   (12) 0
Fair value, ending balance 841 902 829
Current liability   289  
Contingent consideration 841 902 $ 829
Sanofi Pasteur      
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]      
Fair value, beginning balance   711  
Fair value, ending balance 711 747  
Contingent consideration $ 711 $ 747  
Contingent consideration, measurement input, discount rate   0.115  
Measurement Input, Discount Rate | Sanofi Pasteur      
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]      
Contingent consideration, measurement input, discount rate   0.08  
v3.21.2
Inventories - Schedule of Inventories (Details) - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
Inventory Disclosure [Abstract]    
Finished goods $ 1,628 $ 1,610
Raw materials and work in process 6,135 5,949
Supplies 190 146
Total (approximates current cost) 7,953 7,705
Increase (decrease) to LIFO cost 23 (81)
Total current and noncurrent inventories 7,976 7,624
Recognized as:    
Inventories 5,603 5,554
Other assets $ 2,373 $ 2,070
v3.21.2
Inventories - Narrative (Details) - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
Inventory [Line Items]    
Inventories classified in Other assets $ 2,373 $ 2,070
Inventories Not Expected to be Sold Within One Year    
Inventory [Line Items]    
Inventories classified in Other assets 1,900 1,800
Inventories Produced in Preparation for Product Launches    
Inventory [Line Items]    
Inventories classified in Other assets $ 519 $ 279
v3.21.2
Goodwill and Intangibles (Details) - USD ($)
$ in Millions
Jun. 02, 2021
Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]    
Goodwill $ 1,400 $ 1,356
Other intangibles, net 519 $ 503
Technology Rights    
Finite-Lived Intangible Assets [Line Items]    
Other intangibles, net 394  
License    
Finite-Lived Intangible Assets [Line Items]    
Other intangibles, net $ 125  
v3.21.2
Contingencies - Narrative (Details)
$ in Millions
 1 Months Ended 9 Months Ended
Mar. 31, 2014
case
Sep. 30, 2021
USD ($)
case
claim
Dec. 31, 2020
USD ($)
Legal Defense Costs      
Loss Contingencies [Line Items]      
Legal defense costs reserve | $   $ 225 $ 235
Zetia antitrust litigation      
Loss Contingencies [Line Items]      
Loss contingency, pending claims | claim   35  
Fosamax      
Loss Contingencies [Line Items]      
Loss contingency, pending claims   3,470  
Fosamax | Femur Fracture Litigation | Federal      
Loss Contingencies [Line Items]      
Loss contingency, claims on appeal 515    
Loss contingency, claims dismissed 650    
Januvia      
Loss Contingencies [Line Items]      
Loss contingency, pending claims | claim   730  
Januvia | Other State Court      
Loss Contingencies [Line Items]      
Loss contingency, pending claims | claim   6  
Januvia | Cases Company Agreed To Toll Statute Of Limitations      
Loss Contingencies [Line Items]      
Loss contingency, pending claims | claim   50  
Bridion | Patents      
Loss Contingencies [Line Items]      
Loss contingency, claims settled   3  
Januvia and Janumet | Patents      
Loss Contingencies [Line Items]      
Loss contingency, claims settled   16  
v3.21.2
Equity - Rollforward Reconciliations (Details) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 9 Months Ended
Jun. 02, 2021
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Shares, beginning balance (in shares)       3,577,103,522  
Equity, beginning balance   $ 33,388 $ 27,744 $ 25,404 $ 26,001
Net income (loss) attributable to Merck & Co., Inc.   4,567 2,941 9,291 9,161
Other comprehensive income (loss), net of taxes   38 10 1,595 (190)
Cash dividends declared on common stock   (1,653) (1,558) (4,962) (4,656)
Treasury stock shares purchased   (583)   (822) (1,281)
Spin-off of Organon & Co.       5,091  
Share-based compensation plans and other   131 151 283 245
Net income attributable to noncontrolling interests   4 4 12 12
Distributions attributable to noncontrolling interests   $ (29) (22) $ (29) (22)
Shares, ending balance (in shares)   3,577,103,522   3,577,103,522  
Equity, ending balance   $ 35,863 $ 29,270 $ 35,863 $ 29,270
Cash dividends declared on common stock (in dollars per share)   $ 0.65 $ 0.61 $ 1.95 $ 1.83
   Common Stock          
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Shares, beginning balance (in shares)   3,577,000,000 3,577,000,000 3,577,000,000 3,577,000,000
Equity, beginning balance   $ 1,788 $ 1,788 $ 1,788 $ 1,788
Shares, ending balance (in shares)   3,577,000,000 3,577,000,000 3,577,000,000 3,577,000,000
Equity, ending balance   $ 1,788 $ 1,788 $ 1,788 $ 1,788
Other Paid-In Capital          
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Equity, beginning balance   44,039 39,373 39,588 39,660
Spin-off of Organon & Co. $ 4,600     4,643  
Share-based compensation plans and other   110 116 (82) (171)
Equity, ending balance   44,149 39,489 44,149 39,489
Retained Earnings          
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Equity, beginning balance   48,777 49,724 47,362 46,602
Net income (loss) attributable to Merck & Co., Inc.   4,567 2,941 9,291 9,161
Cash dividends declared on common stock   (1,653) (1,558) (4,962) (4,656)
Equity, ending balance   51,691 51,107 51,691 51,107
Accumulated Other Comprehensive Loss          
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Equity, beginning balance   (4,628) (6,393) (6,634) (6,193)
Other comprehensive income (loss), net of taxes   38 10 1,595 (190)
Spin-off of Organon & Co. $ 449     449  
Equity, ending balance   $ (4,590) $ (6,383) $ (4,590) $ (6,383)
  Treasury Stock          
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Shares, beginning balance (in shares)   1,044,000,000 1,048,000,000 1,047,000,000 1,038,000,000
Equity, beginning balance   $ (56,682) $ (56,850) $ (56,787) $ (55,950)
Treasury stock shares purchased (in shares)   8,000,000   11,000,000 16,000,000
Treasury stock shares purchased   $ (583)   $ (822) $ (1,281)
Share-based compensation plans and other (in shares)     (1,000,000) (6,000,000) (7,000,000)
Share-based compensation plans and other   $ 21 $ 35 $ 365 $ 416
Shares, ending balance (in shares)   1,052,000,000 1,047,000,000 1,052,000,000 1,047,000,000
Equity, ending balance   $ (57,244) $ (56,815) $ (57,244) $ (56,815)
Non- controlling Interests          
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Equity, beginning balance   94 102 87 94
Spin-off of Organon & Co.       (1)  
Net income attributable to noncontrolling interests   4 4 12 12
Distributions attributable to noncontrolling interests   (29) (22) (29) (22)
Equity, ending balance   $ 69 $ 84 $ 69 $ 84
v3.21.2
Pension and Other Postretirement Benefit Plans - Net Benefit Costs (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Other Postretirement Benefit Plans        
Defined Benefit Plan Disclosure [Line Items]        
Service cost $ 11 $ 13 $ 37 $ 39
Interest cost 12 14 34 43
Expected return on plan assets (20) (19) (59) (56)
Amortization of unrecognized prior service credit (16) (18) (48) (54)
Net loss (gain) amortization (12) (5) (30) (13)
Termination benefits 0 0 37 0
Curtailments (1) 0 (29) (1)
Net periodic benefit cost (26) (15) (58) (42)
U.S. | Pension Plans        
Defined Benefit Plan Disclosure [Line Items]        
Service cost 104 96 302 270
Interest cost 102 107 305 323
Expected return on plan assets (188) (193) (568) (581)
Amortization of unrecognized prior service credit (9) (12) (29) (37)
Net loss (gain) amortization 75 75 218 228
Termination benefits 2 1 54 5
Curtailments (1) 1 15 4
Settlements 139 2 139 11
Net periodic benefit cost 224 77 436 223
International | Pension Plans        
Defined Benefit Plan Disclosure [Line Items]        
Service cost 75 76 254 222
Interest cost 33 35 92 102
Expected return on plan assets (105) (104) (313) (309)
Amortization of unrecognized prior service credit (3) (3) (12) (9)
Net loss (gain) amortization 32 32 110 94
Termination benefits 0 1 3 2
Curtailments 0 0 (27) (1)
Settlements 0 0 2 2
Net periodic benefit cost $ 32 $ 37 $ 109 $ 103
v3.21.2
Pension and Other Postretirement Benefit Plans - Narrative (Details) - USD ($)
$ in Millions
 1 Months Ended 3 Months Ended 9 Months Ended
Jun. 02, 2021
Sep. 30, 2021
Sep. 30, 2021
Sep. 30, 2021
Retirement Benefits [Abstract]        
Partial settlement charge     $ 125 $ 125
Decrease (increase) to pension liabilities due to remeasurement $ 1,700 $ (160)    
Net pension liabilities transferred $ 99      
v3.21.2
Other (Income) Expense, Net - Schedule of Other (Income) Expense, Net (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Dec. 31, 2021
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Component of Other Income / Expense of Nonoperating [Line Items]          
Interest income   $ (7) $ (9) $ (27) $ (48)
Interest expense   196 203 597 624
Exchange losses   46 10 202 89
Income from investments in equity securities, net   (683) (360) (1,535) (964)
Net periodic defined benefit plan cost (credit) other than service cost   40 (88) (159) (259)
Other, net   (42) (68) (85) (79)
Other (income) expense, net   (450) (312) (1,007) (637)
Unrealized net (losses) gains   $ 90 $ 43 $ (109) $ 512
Forecast          
Component of Other Income / Expense of Nonoperating [Line Items]          
Unrealized net (losses) gains $ 540        
v3.21.2
Other (Income) Expense, Net - Narrative (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Other Income and Expenses [Abstract]    
Interest paid $ 570 $ 605
v3.21.2
Taxes on Income (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Income Tax Examination [Line Items]        
Effective income tax rate 13.20% 14.00% 14.40% 15.10%
Internal Revenue Service (IRS) | Domestic Tax Authority        
Income Tax Examination [Line Items]        
Tax benefit recognized related to settlement     $ 236  
Income taxes paid     190  
Internal Revenue Service (IRS) | Domestic Tax Authority | Continuing Operations        
Income Tax Examination [Line Items]        
Tax benefit recognized related to settlement     207  
Income taxes paid     172  
Internal Revenue Service (IRS) | Domestic Tax Authority | Discontinued Operations        
Income Tax Examination [Line Items]        
Tax benefit recognized related to settlement     29  
Income taxes paid     $ 18  
v3.21.2
Earnings Per Share - Calculations of Earnings Per Share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Earnings Per Share [Abstract]        
Net Income from Continuing Operations Attributable to Merck & Co., Inc. $ 4,567 $ 2,324 $ 8,525 $ 7,136
Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests 0 617 766 2,025
Net income attributable to Merck & Co., Inc., basic 4,567 2,941 9,291 9,161
Net income attributable to Merck & Co., Inc., diluted $ 4,567 $ 2,941 $ 9,291 $ 9,161
Average common shares outstanding (in shares) 2,530 2,529 2,531 2,530
Common shares issuable (in shares) 6 9 8 11
Average common shares outstanding assuming dilution (in shares) 2,536 2,538 2,539 2,541
Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders:        
Income from Continuing Operations (in dollars per share) $ 1.81 $ 0.92 $ 3.37 $ 2.82
Income from Discontinued Operations (in dollars per share) 0 0.24 0.30 0.80
Net Income (in dollars per share) 1.81 1.16 3.67 3.62
Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders:        
Income from Continuing Operations (in dollars per share) 1.80 0.92 3.36 2.81
Income from Discontinued Operations (in dollars per share) 0 0.24 0.30 0.80
Net Income (in dollars per share) $ 1.80 $ 1.16 $ 3.66 $ 3.61
Antidilutive shares (in shares) 8 5 10 5
v3.21.2
Earnings Per Share - Narrative (Details) - shares
shares in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Earnings Per Share [Abstract]        
Antidilutive shares (in shares) 8 5 10 5
v3.21.2
Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Jun. 02, 2021
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Equity, beginning balance   $ 33,388 $ 27,744 $ 25,404 $ 26,001
Other comprehensive income (loss) before reclassification adjustments, pretax   (48) (143) 1,765 (362)
Tax   12 77 (510) 79
Other comprehensive income (loss) before reclassification adjustments, net of taxes   (36) (66) 1,255 (283)
Reclassification adjustments, pretax   104 94 428 121
Tax   (30) (18) (88) (28)
Reclassification adjustments, net of taxes   74 76 340 93
Other comprehensive income (loss), net of taxes   38 10 1,595 (190)
Spin-off of Organon & Co.       5,091  
Equity, ending balance   35,863 29,270 35,863 29,270
Derivatives          
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Equity, beginning balance   (26) 15 (266) 31
Other comprehensive income (loss) before reclassification adjustments, pretax   72 (195) 193 (126)
Tax   (16) 41 (41) 27
Other comprehensive income (loss) before reclassification adjustments, net of taxes   56 (154) 152 (99)
Reclassification adjustments, pretax   36 22 218 (68)
Tax   (8) (5) (46) 14
Reclassification adjustments, net of taxes   28 17 172 (54)
Other comprehensive income (loss), net of taxes   84 (137) 324 (153)
Spin-off of Organon & Co.       0  
Equity, ending balance   58 (122) 58 (122)
Investments          
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Equity, beginning balance   0 0 0 18
Other comprehensive income (loss) before reclassification adjustments, pretax   0 0 0 3
Tax   0 0 0 0
Other comprehensive income (loss) before reclassification adjustments, net of taxes   0 0 0 3
Reclassification adjustments, pretax   0 0 0 (21)
Tax   0 0 0 0
Reclassification adjustments, net of taxes   0 0 0 (21)
Other comprehensive income (loss), net of taxes   0 0 0 (18)
Spin-off of Organon & Co.       0  
Equity, ending balance   0 0 0 0
Employee Benefit Plans          
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Equity, beginning balance   (3,028) (4,162) (4,540) (4,261)
Other comprehensive income (loss) before reclassification adjustments, pretax   (24) 2 1,739 (19)
Tax   16 1 (385) 12
Other comprehensive income (loss) before reclassification adjustments, net of taxes   (8) 3 1,354 (7)
Reclassification adjustments, pretax   68 72 210 210
Tax   (22) (13) (42) (42)
Reclassification adjustments, net of taxes   46 59 168 168
Other comprehensive income (loss), net of taxes   38 62 1,522 161
Spin-off of Organon & Co. $ 28     28  
Equity, ending balance   (2,990) (4,100) (2,990) (4,100)
Foreign Currency Translation Adjustment          
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Equity, beginning balance   (1,574) (2,246) (1,828) (1,981)
Other comprehensive income (loss) before reclassification adjustments, pretax   (96) 50 (167) (220)
Tax   12 35 (84) 40
Other comprehensive income (loss) before reclassification adjustments, net of taxes   (84) 85 (251) (180)
Reclassification adjustments, pretax   0 0 0 0
Tax   0 0 0 0
Reclassification adjustments, net of taxes   0 0 0 0
Other comprehensive income (loss), net of taxes   (84) 85 (251) (180)
Spin-off of Organon & Co. 421     421  
Equity, ending balance   (1,658) (2,161) (1,658) (2,161)
Accumulated Other Comprehensive Income (Loss)          
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Equity, beginning balance   (4,628) (6,393) (6,634) (6,193)
Spin-off of Organon & Co. $ 449     449  
Equity, ending balance   $ (4,590) $ (6,383) $ (4,590) $ (6,383)
v3.21.2
Segment Reporting - Narrative (Details)
$ in Billions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
USD ($)
Sep. 30, 2020
USD ($)
Sep. 30, 2021
USD ($)
segment
Sep. 30, 2020
USD ($)
Segment Reporting [Abstract]        
Number of operating segments | segment     2  
Sales discounts | $ $ 3.1 $ 2.9 $ 9.1 $ 8.3
v3.21.2
Segment Reporting - Sales from Products (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Segment Reporting Information [Line Items]        
Sales $ 13,154 $ 10,929 $ 35,183 $ 30,570
Revenue related to the sale of the marketing rights 135   185  
Operating Segments        
Segment Reporting Information [Line Items]        
Sales 12,913 10,934 35,021 30,355
Corporate, Non-Segment        
Segment Reporting Information [Line Items]        
Sales 241 (5) 162 215
United States        
Segment Reporting Information [Line Items]        
Sales 6,276 5,250 16,166 14,301
United States | Operating Segments        
Segment Reporting Information [Line Items]        
Sales 6,137 5,241 15,974 14,255
United States | Corporate, Non-Segment        
Segment Reporting Information [Line Items]        
Sales 139 9 192 46
Int’l        
Segment Reporting Information [Line Items]        
Sales 6,878 5,679 19,017 16,269
Int’l | Operating Segments        
Segment Reporting Information [Line Items]        
Sales 6,777 5,693 19,047 16,101
Int’l | Corporate, Non-Segment        
Segment Reporting Information [Line Items]        
Sales 101 (14) (30) 168
Pharmaceutical | Operating Segments        
Segment Reporting Information [Line Items]        
Sales 11,496 9,714 30,714 26,797
Pharmaceutical | Operating Segments | Keytruda        
Segment Reporting Information [Line Items]        
Sales 4,534 3,715 12,609 10,387
Pharmaceutical | Operating Segments | Alliance revenue - Lynparza        
Segment Reporting Information [Line Items]        
Sales 246 196 721 519
Pharmaceutical | Operating Segments | Alliance revenue - Lenvima        
Segment Reporting Information [Line Items]        
Sales 188 142 498 421
Pharmaceutical | Operating Segments | Gardasil/Gardasil 9        
Segment Reporting Information [Line Items]        
Sales 1,993 1,187 4,144 2,941
Pharmaceutical | Operating Segments | ProQuad/M-M-R II/Varivax        
Segment Reporting Information [Line Items]        
Sales 661 576 1,626 1,390
Pharmaceutical | Operating Segments | Pneumovax 23        
Segment Reporting Information [Line Items]        
Sales 277 375 600 748
Pharmaceutical | Operating Segments | RotaTeq        
Segment Reporting Information [Line Items]        
Sales 227 210 593 601
Pharmaceutical | Operating Segments | Vaqta        
Segment Reporting Information [Line Items]        
Sales 48 51 138 139
Pharmaceutical | Operating Segments | Bridion        
Segment Reporting Information [Line Items]        
Sales 369 320 1,096 843
Pharmaceutical | Operating Segments | Prevymis        
Segment Reporting Information [Line Items]        
Sales 96 77 270 200
Pharmaceutical | Operating Segments | Noxafil        
Segment Reporting Information [Line Items]        
Sales 64 79 197 247
Pharmaceutical | Operating Segments | Primaxin        
Segment Reporting Information [Line Items]        
Sales 70 74 194 189
Pharmaceutical | Operating Segments | Cancidas        
Segment Reporting Information [Line Items]        
Sales 56 50 168 148
Pharmaceutical | Operating Segments | Invanz        
Segment Reporting Information [Line Items]        
Sales 53 51 157 159
Pharmaceutical | Operating Segments | Zerbaxa        
Segment Reporting Information [Line Items]        
Sales (2) 43 (11) 112
Pharmaceutical | Operating Segments | Simponi        
Segment Reporting Information [Line Items]        
Sales 203 209 619 615
Pharmaceutical | Operating Segments | Remicade        
Segment Reporting Information [Line Items]        
Sales 73 82 233 242
Pharmaceutical | Operating Segments | Belsomra        
Segment Reporting Information [Line Items]        
Sales 81 81 238 244
Pharmaceutical | Operating Segments | Isentress/Isentress HD        
Segment Reporting Information [Line Items]        
Sales 189 205 590 646
Pharmaceutical | Operating Segments | Alliance revenue-Adempas/Verquvo        
Segment Reporting Information [Line Items]        
Sales 100 83 248 216
Pharmaceutical | Operating Segments | Adempas        
Segment Reporting Information [Line Items]        
Sales 59 55 188 167
Pharmaceutical | Operating Segments | Januvia        
Segment Reporting Information [Line Items]        
Sales 852 821 2,445 2,449
Pharmaceutical | Operating Segments | Janumet        
Segment Reporting Information [Line Items]        
Sales 487 506 1,449 1,499
Pharmaceutical | Operating Segments | Other pharmaceutical        
Segment Reporting Information [Line Items]        
Sales 572 526 1,704 1,675
Pharmaceutical | United States | Operating Segments        
Segment Reporting Information [Line Items]        
Sales 5,670 4,842 14,611 13,108
Pharmaceutical | United States | Operating Segments | Keytruda        
Segment Reporting Information [Line Items]        
Sales 2,580 2,157 7,108 6,106
Pharmaceutical | United States | Operating Segments | Alliance revenue - Lynparza        
Segment Reporting Information [Line Items]        
Sales 129 107 371 297
Pharmaceutical | United States | Operating Segments | Alliance revenue - Lenvima        
Segment Reporting Information [Line Items]        
Sales 114 82 287 270
Pharmaceutical | United States | Operating Segments | Gardasil/Gardasil 9        
Segment Reporting Information [Line Items]        
Sales 839 579 1,605 1,209
Pharmaceutical | United States | Operating Segments | ProQuad/M-M-R II/Varivax        
Segment Reporting Information [Line Items]        
Sales 537 437 1,255 1,033
Pharmaceutical | United States | Operating Segments | Pneumovax 23        
Segment Reporting Information [Line Items]        
Sales 181 276 354 478
Pharmaceutical | United States | Operating Segments | RotaTeq        
Segment Reporting Information [Line Items]        
Sales 135 114 364 355
Pharmaceutical | United States | Operating Segments | Vaqta        
Segment Reporting Information [Line Items]        
Sales 32 32 80 79
Pharmaceutical | United States | Operating Segments | Bridion        
Segment Reporting Information [Line Items]        
Sales 181 162 545 412
Pharmaceutical | United States | Operating Segments | Prevymis        
Segment Reporting Information [Line Items]        
Sales 39 32 111 87
Pharmaceutical | United States | Operating Segments | Noxafil        
Segment Reporting Information [Line Items]        
Sales 19 13 48 27
Pharmaceutical | United States | Operating Segments | Primaxin        
Segment Reporting Information [Line Items]        
Sales 0 1 0 2
Pharmaceutical | United States | Operating Segments | Cancidas        
Segment Reporting Information [Line Items]        
Sales 1 1 4 2
Pharmaceutical | United States | Operating Segments | Invanz        
Segment Reporting Information [Line Items]        
Sales (2) 1 (2) 7
Pharmaceutical | United States | Operating Segments | Zerbaxa        
Segment Reporting Information [Line Items]        
Sales (1) 20 (5) 57
Pharmaceutical | United States | Operating Segments | Simponi        
Segment Reporting Information [Line Items]        
Sales 0 0 0 0
Pharmaceutical | United States | Operating Segments | Remicade        
Segment Reporting Information [Line Items]        
Sales 0 0 0 0
Pharmaceutical | United States | Operating Segments | Belsomra        
Segment Reporting Information [Line Items]        
Sales 23 18 56 67
Pharmaceutical | United States | Operating Segments | Isentress/Isentress HD        
Segment Reporting Information [Line Items]        
Sales 77 92 222 243
Pharmaceutical | United States | Operating Segments | Alliance revenue-Adempas/Verquvo        
Segment Reporting Information [Line Items]        
Sales 73 78 222 200
Pharmaceutical | United States | Operating Segments | Adempas        
Segment Reporting Information [Line Items]        
Sales 0 0 0 0
Pharmaceutical | United States | Operating Segments | Januvia        
Segment Reporting Information [Line Items]        
Sales 365 342 997 1,110
Pharmaceutical | United States | Operating Segments | Janumet        
Segment Reporting Information [Line Items]        
Sales 86 105 244 361
Pharmaceutical | United States | Operating Segments | Other pharmaceutical        
Segment Reporting Information [Line Items]        
Sales 262 193 745 706
Pharmaceutical | Int’l | Operating Segments        
Segment Reporting Information [Line Items]        
Sales 5,826 4,872 16,103 13,690
Pharmaceutical | Int’l | Operating Segments | Keytruda        
Segment Reporting Information [Line Items]        
Sales 1,954 1,559 5,501 4,281
Pharmaceutical | Int’l | Operating Segments | Alliance revenue - Lynparza        
Segment Reporting Information [Line Items]        
Sales 117 89 350 223
Pharmaceutical | Int’l | Operating Segments | Alliance revenue - Lenvima        
Segment Reporting Information [Line Items]        
Sales 74 60 211 152
Pharmaceutical | Int’l | Operating Segments | Gardasil/Gardasil 9        
Segment Reporting Information [Line Items]        
Sales 1,154 608 2,539 1,732
Pharmaceutical | Int’l | Operating Segments | ProQuad/M-M-R II/Varivax        
Segment Reporting Information [Line Items]        
Sales 125 139 371 356
Pharmaceutical | Int’l | Operating Segments | Pneumovax 23        
Segment Reporting Information [Line Items]        
Sales 97 99 247 270
Pharmaceutical | Int’l | Operating Segments | RotaTeq        
Segment Reporting Information [Line Items]        
Sales 92 96 229 246
Pharmaceutical | Int’l | Operating Segments | Vaqta        
Segment Reporting Information [Line Items]        
Sales 16 19 58 60
Pharmaceutical | Int’l | Operating Segments | Bridion        
Segment Reporting Information [Line Items]        
Sales 188 157 551 431
Pharmaceutical | Int’l | Operating Segments | Prevymis        
Segment Reporting Information [Line Items]        
Sales 57 46 159 113
Pharmaceutical | Int’l | Operating Segments | Noxafil        
Segment Reporting Information [Line Items]        
Sales 45 66 149 220
Pharmaceutical | Int’l | Operating Segments | Primaxin        
Segment Reporting Information [Line Items]        
Sales 69 73 194 187
Pharmaceutical | Int’l | Operating Segments | Cancidas        
Segment Reporting Information [Line Items]        
Sales 56 49 164 147
Pharmaceutical | Int’l | Operating Segments | Invanz        
Segment Reporting Information [Line Items]        
Sales 55 50 159 152
Pharmaceutical | Int’l | Operating Segments | Zerbaxa        
Segment Reporting Information [Line Items]        
Sales (1) 23 (6) 54
Pharmaceutical | Int’l | Operating Segments | Simponi        
Segment Reporting Information [Line Items]        
Sales 203 209 619 615
Pharmaceutical | Int’l | Operating Segments | Remicade        
Segment Reporting Information [Line Items]        
Sales 73 82 233 242
Pharmaceutical | Int’l | Operating Segments | Belsomra        
Segment Reporting Information [Line Items]        
Sales 58 63 183 177
Pharmaceutical | Int’l | Operating Segments | Isentress/Isentress HD        
Segment Reporting Information [Line Items]        
Sales 112 113 368 403
Pharmaceutical | Int’l | Operating Segments | Alliance revenue-Adempas/Verquvo        
Segment Reporting Information [Line Items]        
Sales 27 5 26 16
Pharmaceutical | Int’l | Operating Segments | Adempas        
Segment Reporting Information [Line Items]        
Sales 59 55 188 167
Pharmaceutical | Int’l | Operating Segments | Januvia        
Segment Reporting Information [Line Items]        
Sales 487 479 1,448 1,339
Pharmaceutical | Int’l | Operating Segments | Janumet        
Segment Reporting Information [Line Items]        
Sales 401 400 1,205 1,138
Pharmaceutical | Int’l | Operating Segments | Other pharmaceutical        
Segment Reporting Information [Line Items]        
Sales 308 333 957 969
Animal Health | Operating Segments        
Segment Reporting Information [Line Items]        
Sales 1,417 1,220 4,307 3,535
Animal Health | Operating Segments | Livestock        
Segment Reporting Information [Line Items]        
Sales 864 758 2,503 2,145
Animal Health | Operating Segments | Companion Animals        
Segment Reporting Information [Line Items]        
Sales 553 462 1,804 1,390
Animal Health | United States | Operating Segments        
Segment Reporting Information [Line Items]        
Sales 467 399 1,363 1,124
Animal Health | United States | Operating Segments | Livestock        
Segment Reporting Information [Line Items]        
Sales 190 165 508 448
Animal Health | United States | Operating Segments | Companion Animals        
Segment Reporting Information [Line Items]        
Sales 277 234 855 676
Animal Health | Int’l | Operating Segments        
Segment Reporting Information [Line Items]        
Sales 951 821 2,944 2,411
Animal Health | Int’l | Operating Segments | Livestock        
Segment Reporting Information [Line Items]        
Sales 675 593 1,996 1,697
Animal Health | Int’l | Operating Segments | Companion Animals        
Segment Reporting Information [Line Items]        
Sales 276 228 948 714
Other Segments | Operating Segments        
Segment Reporting Information [Line Items]        
Sales 0 0 0 23
Other Segments | United States | Operating Segments        
Segment Reporting Information [Line Items]        
Sales 0 0 0 23
Other Segments | Int’l | Operating Segments        
Segment Reporting Information [Line Items]        
Sales $ 0 $ 0 $ 0 $ 0
v3.21.2
Segment Reporting - Consolidated Sales by Geographic Area (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Revenue from External Customer [Line Items]        
Sales $ 13,154 $ 10,929 $ 35,183 $ 30,570
United States        
Revenue from External Customer [Line Items]        
Sales 6,276 5,250 16,166 14,301
Europe, Middle East and Africa        
Revenue from External Customer [Line Items]        
Sales 3,342 2,946 9,912 8,537
China        
Revenue from External Customer [Line Items]        
Sales 1,307 791 3,004 2,060
Japan        
Revenue from External Customer [Line Items]        
Sales 638 671 1,929 1,875
Asia Pacific (other than China and Japan)        
Revenue from External Customer [Line Items]        
Sales 613 545 1,782 1,560
Latin America        
Revenue from External Customer [Line Items]        
Sales 599 499 1,631 1,374
Other        
Revenue from External Customer [Line Items]        
Sales $ 379 $ 227 $ 759 $ 863
v3.21.2
Segment Reporting - Reconciliation of Segment Profits to Income before Taxes (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Segment Reporting Information [Line Items]        
Profits $ 5,266 $ 2,706 $ 9,970 $ 8,408
Interest income 7 9 27 48
Interest expense (196) (203) (597) (624)
Amortization     (1,231) (1,393)
Depreciation     (1,148) (1,210)
Research and development (2,445) (3,349) (9,177) (7,609)
Restructuring costs (107) (113) (487) (265)
Operating Segments        
Segment Reporting Information [Line Items]        
Profits 9,111 7,484 24,079 20,583
Operating Segments | Pharmaceutical segment        
Segment Reporting Information [Line Items]        
Profits 8,606 7,026 22,450 19,235
Operating Segments | Animal Health segment        
Segment Reporting Information [Line Items]        
Profits 505 459 1,629 1,347
Operating Segments | Other segment        
Segment Reporting Information [Line Items]        
Profits 0 (1) 0 1
Corporate, Non-Segment        
Segment Reporting Information [Line Items]        
Profits 141 (28) 29 135
Segment Reconciling Items        
Segment Reporting Information [Line Items]        
Interest income 7 9 27 48
Interest expense (196) (203) (597) (624)
Amortization (360) (406) (1,231) (1,393)
Depreciation (358) (367) (1,031) (1,105)
Research and development (2,312) (3,231) (8,775) (7,251)
Restructuring costs (107) (113) (487) (265)
Other unallocated, net $ (660) $ (439) $ (2,044) $ (1,720)