What it does
Merck describes itself as a global health care company delivering health solutions through prescription medicines, including biologic therapies, vaccines and animal health products. Its two reportable operating segments are Pharmaceutical and Animal Health. The Pharmaceutical segment covers human health medicines and preventive vaccines. Animal Health covers veterinary pharmaceuticals, vaccines, health-management solutions and services, plus digitally connected identification, traceability and monitoring products for livestock and companion animals.
Source: Merck & Co., Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov
How it makes money
The company reports sales in its Pharmaceutical and Animal Health segments, with other revenues primarily comprising miscellaneous corporate revenues, revenue hedging activities and third-party manufacturing arrangements. Its pharmaceutical sales include prescription therapeutic and preventive agents and vaccines. The filing’s product-sales table identifies Keytruda/Keytruda Qlex, Gardasil/Gardasil 9 and Januvia/Janumet among the listed pharmaceutical products, while Animal Health is presented across livestock and companion-animal products. Alliance revenue is Merck’s share of profits from specified collaborative products, net of cost of sales and commercialization costs.
Source: Merck & Co., Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov
Customers and geography
For human health pharmaceutical products, the company states that it sells primarily to drug wholesalers and retailers, hospitals, government agencies, managed health care providers and other institutions. It sells human health vaccines primarily to physicians, wholesalers, distributors and government entities. Animal Health products are sold to veterinarians, distributors, animal producers, farmers and pet owners. The filing describes Merck as global and says its operations outside the U.S. are significant, but the provided excerpts do not give geographic revenue figures or identify specific sales geographies.
Source: Merck & Co., Inc. Form 10-K for fiscal 2025, Item 1 and Item 1A — sec.gov
Competition
The filing states that the markets in which Merck operates, and the pharmaceutical industry generally, are highly competitive and highly regulated. It lists competitors as other worldwide research-based pharmaceutical companies, smaller research companies with narrower therapeutic focuses, generic drug manufacturers and animal health care companies. The filing does not name specific competitors in its competition discussion. It also states that generic and biosimilar competition, competitors’ technological advances, industry consolidation, patent challenges, combination products and new clinical information may adversely affect operations.
Source: Merck & Co., Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov
Key risks
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The company is dependent on patent rights; invalidation or circumvention could materially adversely affect its business, and loss of market exclusivity generally brings a significant and rapid loss of sales.
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Product candidates or uses may not reach the market or succeed because of regulatory, clinical, reimbursement, proprietary-rights, clinical-preference or manufacturing-cost factors.
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Continued global pricing pressure, particularly in mature markets, from managed care organizations, government agencies and programs could negatively affect sales and profit margins.
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Its significant operations outside the U.S. expose it to reimbursement and pricing restrictions, regulatory requirements, trade measures, tariffs, foreign-exchange fluctuations and diminished intellectual-property protection.
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Development, testing, manufacturing and commercialization of biologics and vaccines is long, complex, expensive and uncertain.
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Developments after approval, including trial results, re-review, recalls, loss of marketing approval, changing standards and advertising scrutiny, may decrease product demand.
Source: Merck & Co., Inc. Form 10-K for fiscal 2025, Item 1A — sec.gov
People and operations
The filing reports 75,000 employees for FY2025. The company states that its operations are principally managed on a product basis. It describes an employee approach centered on collaboration and an environment of respect, engagement and empowerment, while seeking to hire and develop talent through equal opportunity in employment. The provided excerpts do not state facility counts, facility locations or seasonality.
Source: Merck & Co., Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov