Merck & Co. (MRK) 10-K risk factor changes: FY2021 vs FY2020

- [removed: The uncertainty in global] [added: Unfavorable or uncertain] economic [removed: conditions] [added: conditions,] together with cost-reduction measures being taken by certain [removed: governments] [added: governments,] could negatively affect the Company’s operating results.

- [removed: The global COVID-19 pandemic is having] [added: In 2021 and 2020, COVID-19-related disruptions had] an adverse impact on the Company’s business, operations and financial performance.

[removed: The Company is unable to predict the full extent to which the] COVID-19 pandemic or any future pandemic, epidemic or similar public health threat will adversely impact its business, operations, financial performance, results of operations, and financial condition.

- [removed: In the past, the] [added: The] Company [removed: has experienced] [added: may experience] difficulties and delays in manufacturing certain of its products, including vaccines.

- The health care industry in the [removed: United States] [added: U.S.] has been, and will continue to be, subject to increasing regulation and political action.

- The Company is increasingly dependent on sophisticated software [removed: applications, computing infrastructure] [added: applications] and [removed: cloud service providers.][added: computing infrastructure.]

- Social media [added: and mobile messaging] platforms present risks and challenges.

Patent protection is considered, in the aggregate, to be of material importance to the Company’s marketing of human health and animal health products in the [removed: United States] [added: U.S.] and in most major foreign markets.

It is important for the Company’s business to [removed: defend] successfully [added: assert and defend] the patent rights that provide market exclusivity for its products.

The Company [added: asserts and] defends its patents both within and outside the [removed: United States,] [added: U.S.,] including by filing claims of infringement against other parties.

“Financial Statements and Supplementary Data,” Note [removed: 10.][added: 11.]

The Company normally responds by [removed: defending] [added: asserting] its [removed: patent, including by filing lawsuits] [added: patent with a lawsuit] alleging patent [added: infringement.]

Further, court decisions relating to other companies’ patents, potential legislation in both the [removed: United States] [added: U.S.] and certain foreign markets relating to patents, as well as regulatory initiatives may result in a more general weakening of intellectual property protection.

[removed: Loss of patent protection for one of the Company’s products typically leads to a significant and] rapid loss of sales for that product as lower priced generic versions of that drug become available.

[removed: In addition,] *Januvia* and *Janumet* will lose market exclusivity in the [removed: United States] [added: U.S.] in January 2023.

*Januvia* [added: and *Janumet*] will lose market exclusivity in the EU in September [added: 2022 and in China in July] 2022.

The Company anticipates sales of *Januvia* and *Janumet* in these markets will decline substantially after the loss of [removed: market] exclusivity.

The Company’s ability to generate profits and operating cash flow depends largely upon the continued profitability of the Company’s key products, such as *Keytruda, Gardasil/Gardasil* 9, [removed: *Januvia*, *Janumet*,] [added: Lynparza, *Bravecto*,] and *Bridion*.

In particular, in [removed: 2020,] [added: 2021,] the Company’s oncology portfolio, led by *Keytruda,* represented [removed: the vast majority] [added: a substantial portion] of the Company’s revenue growth.

As a result of the Company’s dependence on key products, any event that adversely affects any of these products or the markets for any of these products could have a significant adverse impact on results of operations and [removed: cash flows.][added: financial condition.]

[removed: Failure to do so in the short] term or long term would have a material adverse effect on the Company’s business, results of operations, cash flow, financial condition and prospects.

In the [removed: United States,] [added: U.S.,] these include (i) practices of managed care groups and institutional and governmental purchasers, (ii) U.S. federal laws and regulations related to Medicare and Medicaid, including the Medicare Prescription Drug Improvement and Modernization Act of 2003 and the ACA, and (iii) state activities aimed at increasing price transparency, including new laws as noted above in Item 1.

“Competition and the Health Care Environment.” Changes to the health care system enacted as part of health care reform in the [removed: United States,] [added: U.S.,] as well as increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid, and private sector beneficiaries, could result in further pricing pressures.

In addition, in the [removed: United States,] [added: U.S.,] larger customers have received higher rebates on drugs in certain highly competitive categories.

In order to provide information about the Company’s pricing practices, the Company annually posts on its website its Pricing Transparency Report for the [removed: United States.][added: U.S. The report provides the Company’s average annual list price and net price increases across the Company’s U.S. portfolio dating back to 2010.]

In [removed: 2020,] [added: 2021,] the Company’s gross U.S. sales were reduced by [removed: 45.5%] [added: 43.5%] as a result of rebates, discounts and returns.

Outside the [removed: United States,] [added: U.S.,] numerous major markets, including the EU, Japan and China have pervasive government involvement in funding health care and, in that regard, fix the pricing and reimbursement of pharmaceutical and vaccine products.

In Japan, the pharmaceutical industry is subject to government-mandated [removed: biennial] [added: annual] price reductions of pharmaceutical products and certain vaccines.

[removed: The uncertainty in global] [added: Unfavorable or uncertain] economic [removed: conditions] [added: conditions,] together with cost-reduction measures being taken by certain [removed: governments] [added: governments,] could negatively affect the Company’s operating results.

In addition, the Company’s revenue performance in [removed: 2020] [added: 2021] was negatively affected by other cost-reduction measures taken by governments and other [removed: third-parties] [added: third parties] to lower health care costs.

In addition, in some countries, patent protection is significantly weaker than in the [removed: United States] [added: U.S.] or in the EU.

In the [removed: United States] [added: U.S.] and the EU, political pressure to reduce spending on prescription drugs has led to legislation and other measures that encourage the use of generic and biosimilar products.

In addition, proposals emerge from time to time in the [removed: United States] [added: U.S.] and other countries for legislation to further encourage the early and rapid approval of generic drugs.

[removed: In addition, if products that were measured at fair value and capitalized in] connection with acquisitions experience difficulties in the market that negatively impact product cash flows, the Company may recognize material non-cash impairment charges with respect to the value of those products.

[removed: The global COVID-19 pandemic is having] [added: In 2021 and 2020, COVID-19-related disruptions had] an adverse impact on the Company’s business, operations and financial performance.

The Company’s business and financial results were negatively impacted by [removed: the outbreak of COVID-19] [added: COVID-19-related disruptions] in [added: 2021 and] 2020.

The degree to which [removed: COVID-19 impacts] [added: COVID-19-related disruptions impact] the Company’s results in [removed: 2021] [added: 2022] will depend on future developments, beyond the Company’s knowledge or control, including, but not limited to, the duration of the [removed: outbreak,] [added: pandemic,] its severity, the success of actions taken to contain or prevent the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume.

In [removed: 2020,] [added: 2021,] the COVID-19 pandemic impacted the Company’s business in numerous ways.

As expected, within the Company’s human health business, [added: which is comprised largely of physician-administered products,] revenue was negatively impacted by [removed: reduced access to health care providers given] social distancing [removed: measures,] [added: measures and fewer well visits,] which negatively affected vaccine and oncology sales in particular.

The estimated [removed: overall] negative impact of [removed: the COVID-19 pandemic] [added: COVID-19-related disruptions] to Merck’s revenue for the full year [removed: 2020] [added: 2021] was approximately [removed: $2.5] [added: $1.3] billion, [removed: largely] attributable to the Pharmaceutical [removed: segment, with approximately $50 million attributable to the Animal Health] segment.

The Company is unable to predict the full extent to which the

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

- Climate change or legal, regulatory or market measures to address climate change may negatively affect the Company’s business, results of operations, cash flows and prospects.

- Environmental, social and governance (ESG) matters may impact the Company’s business and reputation.

- Adverse outcomes in current or future legal matters could negatively affect Merck’s business.

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

Loss of patent protection for one of the Company’s products typically leads to a significant and

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

Failure to do so in the short

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

The Company’s business may be adversely affected by local and global economic conditions, including with respect to inflation, interest rates, and costs of raw materials and packaging.

In addition, the COVID-19 pandemic has caused some disruption and volatility in the Company’s global supply chain network, and the Company may experience disruptions in availability and delays in shipments of raw materials and packaging, as well as related cost inflation.

Any such disruptions, delays or costs may result in the Company’s inability to meet demand for the Company’s products.

In addition, if products that were measured at fair value and capitalized in

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

Merck believes that global health systems and patients have largely adapted to the impacts of COVID-19, however, roughly 75% of Merck’s Pharmaceutical segment revenue is comprised of physician-administered products which could be adversely affected by the pandemic if its effects worsen.

In particular, in February 2022, armed conflict escalated between Russia and Ukraine.

It is not possible to predict the broader consequences of this conflict, which could include sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, currency exchange rates and financial markets.

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

Climate change or legal, regulatory or market measures to address climate change may negatively affect the Company’s business, results of operations, cash flows and prospects.

The Company believes that climate change has the potential to negatively affect its business and results of operations, cash flows and prospects.

The Company is exposed to physical risks (such as extreme weather conditions or rising sea levels), risks in transitioning to a low-carbon economy (such as additional legal or regulatory requirements, changes in technology, market risk and reputational risk) and social and human effects (such as population dislocations and harm to health and well-being) associated with climate change.

These risks can be either acute (short-term) or chronic (long-term).

The adverse impacts of climate change include increased frequency and severity of natural disasters and extreme weather events such as hurricanes, tornados, wildfires (exacerbated by drought), flooding, and extreme heat.

Extreme weather and sea-level rise pose physical risks to the Company’s facilities as well as those of its suppliers.

Such risks include losses incurred as a result of physical damage to facilities, loss or spoilage of inventory, and business interruption caused by such natural disasters and extreme weather events.

Other potential physical impacts due to climate change include reduced access to high-quality water in certain regions and the loss of biodiversity, which could impact future product development.

These risks could disrupt the Company’s operations and its supply chain, which may result in increased costs.

New legal or regulatory requirements may be enacted to prevent, mitigate, or adapt to the implications of a changing climate and its effects on the environment.

These regulations, which may differ across jurisdictions, could result in the Company being subject to new or expanded carbon pricing or taxes, increased compliance costs, restrictions on greenhouse gas emissions, investment in new technologies, increased carbon disclosure and transparency, upgrade of facilities to meet new building codes, and the redesign of utility systems, which could increase the Company’s operating costs, including the cost of electricity and energy used by the Company.

The Company’s supply chain would likely be subject to these same transitional risks and would likely pass along any increased costs to the Company.

Environmental, social and governance (ESG) matters may impact the Company’s business and reputation.

Governmental authorities, non-governmental organizations, customers, investors, external stakeholders and employees are increasingly sensitive to ESG concerns, such as diversity and inclusion, climate change, water use, recyclability or recoverability of packaging, and plastic waste.

This focus on ESG concerns may lead to new requirements that could result in increased costs associated with developing, manufacturing and distributing the Company’s products.

The Company’s ability to compete could also be affected by changing customer preferences and requirements, such as growing demand for more environmentally friendly products, packaging or supplier practices, or by failure to meet such customer expectations or demand.

While the Company strives to improve its ESG performance, the Company risks negative stockholder reaction, including from proxy advisory services, as well as damage to its brand and reputation, if the Company does not act responsibly, or if the Company is perceived to not be acting responsibly in key ESG areas, including equitable access to medicines and vaccines, product quality and safety, diversity and inclusion, environmental stewardship, support for local communities, corporate governance and transparency, and addressing human capital factors in the Company’s operations.

If the Company does not meet the ESG expectations of its investors, customers and other stakeholders, the Company could experience reduced demand for its products, loss of customers, and other negative impacts on the Company’s business and results of operations.

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

- The proposed Spin-Off of Organon may not be completed on the terms or timeline currently contemplated, if at all, and may not achieve the expected results.

- The costs to complete the proposed Spin-Off will be significant.

In addition, the Company may be unable to achieve some or all of the strategic and financial benefits that it expects to achieve from the Spin-Off of Organon.

- Following the Spin-Off, the price of shares of the Company’s common stock may fluctuate significantly.

- There could be significant income tax liability if the Spin-Off or certain related transactions are determined to be taxable for U.S. federal income tax purposes.

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

infringement.

For example, the patent that provided U.S. market exclusivity for *NuvaRing* expired in April 2018 and generic competition began in December 2019.

The Company experienced a rapid and substantial decline in U.S. *NuvaRing* sales in 2020 as a result of this generic competition.

Finally, the SPC that provides market exclusivity for *Janumet* in the EU expires in April 2023.

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

The report provides the Company’s average annual list price and net price increases across the Company’s U.S. portfolio dating back to 2010.

The next government-mandated price reduction will occur in April 2021 and is expected to impact many Company products.

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

Roughly two-thirds of Merck’s Pharmaceutical segment revenue is comprised of physician-administered products, which, despite strong underlying demand, have been affected by social distancing measures, fewer well visits and delays in elective surgeries due to the COVID-19 pandemic.

These impacts, as well as the prioritization of COVID-19 patients at health care providers, have resulted in reduced administration of many of the Company’s human health products, in particular for its vaccines, including *Gardasil* 9, as well as for *Keytruda* and *Implanon/*

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

*Nexplanon*.

In addition, declines in elective surgeries negatively affected the demand for *Bridion*.

However, sales of *Pneumovax* 23 have increased due to heightened awareness of pneumococcal vaccination.

Merck believes that global health systems and patients have largely adapted to the impacts of COVID-19, but the Company’s assumption is that ongoing residual negative impacts will persist, particularly during the first half of 2021 and most notably with respect to vaccine sales, with the impact expected to be more acute in the United States.

For the full year of 2021, Merck assumes an unfavorable impact to revenue of approximately 2% due to the COVID-19 pandemic, all of which relates to Pharmaceutical segment sales.

In addition, for the full year of 2021, with respect to the COVID-19 pandemic, Merck expects a net negative impact to operating expenses, as spending on the development of its COVID-19 antiviral programs is expected to exceed the favorable impact of lower spending in other areas due to the COVID-19 pandemic.

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

manufacturing shutdowns, product shortages and delays in product manufacturing; (ii) delays related to the construction of new facilities or the expansion of existing facilities, including those intended to support future demand for the Company’s products; and (iii) other manufacturing or distribution problems including changes in manufacturing production sites and limits to manufacturing capacity due to regulatory requirements, changes in types of products produced, or physical limitations that could impact continuous supply.

In 2017, the Chinese government updated the NRDL for the first time in eight years.

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

In 2010, the United States enacted major health care reform legislation in the form of the ACA.

Various insurance market reforms have advanced and state and federal insurance exchanges were launched in 2014.

The ACA increased the mandated Medicaid rebate from 15.1% to 23.1%, expanded the rebate to Medicaid managed care utilization, and increased the types of entities eligible for the federal 340B drug discount program.

The ACA also requires pharmaceutical manufacturers to pay 70% of the cost of medicine, including biosimilar products, when Medicare Part D beneficiaries are in the Medicare Part D coverage gap (i.e., the so-called “donut hole”).

In 2020, the Company’s revenue was reduced by approximately $700 million due to this requirement.

Also, pharmaceutical manufacturers are required to pay an annual non-tax deductible health care reform fee.

In 2020, the Company recorded $85 million of costs for this annual fee.

More recently, although CMS previously declined to define what constitutes a product “line extension” (beyond the statutory definition), CMS issued a new rule on December 21, 2020 that will significantly expand the definition of the term “line extension” as of January 1, 2022 to include a broad range of products, including products reflecting new strengths, dosage forms, release mechanisms, and routes of administration.

This expanded definition will increase the number of drugs subject to a higher Medicaid rebate.

Human health vaccine products consist of preventive pediatric, adolescent and adult [removed: vaccines, primarily administered at physician offices.][added: vaccines.]

The Company divested the remaining businesses in this segment [removed: in] [added: during] the first quarter of 2020.

[removed: In February 2020,] [added: On June 2, 2021,] Merck [removed: announced its intention to] [added: completed the] spin-off [added: 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 distribution is expected to qualify [added: and has been treated] as tax-free to the Company and its shareholders for U.S. federal income tax purposes.

The established brands included in the transaction [removed: consist] [added: consisted] of dermatology, non-opioid pain management, respiratory, [removed: and] select cardiovascular [removed: products including *Zetia* and *Vytorin*,] [added: products,] as well as the rest of Merck’s diversified brands franchise.

Merck’s existing research pipeline programs [removed: will] continue to be owned and developed within Merck as planned.

[removed: *Financial Highlights*][added: Financial Highlights]

| *($ in millions)* | | | [removed: 2020] [added: 2021] | | | | | | % Change | | | | | | % Change Excluding Foreign Exchange | | | [added: | | | 2020 | | | | | | % Change | | | | | | % Change Excluding Foreign Exchange | | | | | |] 2019 | | |

| Net Income [added: from Continuing Operations] Attributable to Merck & Co., [removed: Inc.] [added: Inc.:] | | | [removed: 7,067] | | | | | | [removed: (28)] | | [removed: %] | | | | [removed: (25)] | | [removed: %] | [removed: 9,843] | | | [added: | | | | | | | | | | | | | | | | | | | | |]

| Non-GAAP [removed: Net Income Attributable] [added: net income attributable] to Merck & Co., Inc. [removed: *(1)*] | | | [removed: 15,082 | | |] [added: $] | [added: 15,282] | | [removed: 13] | | [removed: %] | [added: $] | [added: 11,506] | | [removed: 16] | | [removed: %] | [removed: 13,382] [added: $] | [added: 9,617] | |

| Earnings per Common Share Assuming Dilution [added: from Continuing Operations] Attributable to Merck & Co., Inc. Common [removed: Shareholders] [added: Shareholders:] | | | [removed: $2.78] | | | | | | [removed: (27)] | | [removed: %] | | | | [removed: (24)] | | [removed: %] | [removed: $3.81] | | | [added: | | | | | | | | | | | | | | | | | | | | |]

[removed: *Executive Summary*][added: Executive Summary]

Worldwide sales were [removed: $48.0] [added: $48.7] billion in [removed: 2020,] [added: 2021,] an increase of [removed: 2%] [added: 17%] compared with [removed: 2019,] [added: 2020,] or [removed: 4%] [added: 16%] excluding the [removed: unfavorable] [added: favorable] effect [removed: from] [added: of] foreign exchange.

The sales increase was driven primarily by [added: growth in] oncology, [removed: certain] [added: vaccines,] hospital acute care [removed: products] and animal health.

Growth in these areas was largely offset by the negative effects of the [removed: coronavirus disease 2019 (COVID-19)] [added: COVID-19] pandemic as discussed [removed: below, the effects of generic competition, particularly in the diversified brands and women’s health franchises,] [added: above,] competitive pressure in the virology franchise and pricing pressure in the diabetes franchise.

Roughly [removed: two-thirds] [added: 75%] of Merck’s Pharmaceutical segment revenue is comprised of physician-administered products, [removed: sales of which were negatively] [added: which, despite strong underlying demand, have been] affected [removed: in 2020] by [removed: patients’ inability to access health care providers, fewer well visits, and] social distancing [removed: measures.][added: measures and fewer well visits.]

Merck actively monitors the [removed: business development] landscape for growth opportunities that meet the Company’s strategic criteria.

During [removed: 2020,] [added: 2021,] the Company received numerous regulatory approvals within oncology.

Lynparza [removed: was also] [added: is] approved [removed: in Japan] for the treatment of [removed: three] [added: certain] types of advanced [removed: cancer:] ovarian, [removed: prostate and] [added: breast,] pancreatic [removed: cancer.][added: and prostate cancers.]

[removed: Lenvima,] [added: Lynparza,] which is being developed in collaboration with [removed: Eisai Co., Ltd. (Eisai),] [added: AstraZeneca PLC (AstraZeneca),] received approval in China as monotherapy for the treatment of [removed: differentiated thyroid] [added: certain adult patients with metastatic castration resistant prostate] cancer.

[removed: In January 2021, the Company received FDA approval for] Verquvo [removed: (vericiguat),] [added: was approved in the U.S. in January 2021] to reduce the risk of cardiovascular death and heart failure hospitalization following a hospitalization for heart failure or need for outpatient intravenous diuretics in [removed: adults.][added: adults with symptomatic chronic heart failure and reduced ejection fraction.]

[removed: The Company’s Phase 3 oncology programs include] [added: -] *Keytruda* in the therapeutic areas of [removed: biliary tract, cervical,] [added: biliary,] cutaneous squamous cell, [removed: endometrial,] gastric, hepatocellular, mesothelioma, ovarian, prostate and small-cell lung cancers; [removed: Lynparza as monotherapy for colorectal cancer and in combination with *Keytruda* for non-small-cell lung and small-cell lung cancers; and Lenvima in combination with *Keytruda* for bladder, endometrial, gastric, head and neck, melanoma and non-small-cell lung cancers.]

The Company is allocating resources to support its commercial opportunities in the near term while [removed: making the necessary investments] [added: investing heavily in research] to support [added: future innovations and] long-term growth.

Research and development expenses in [removed: 2020] [added: 2021] reflect higher [removed: costs related to business development activity, higher] clinical development spending and increased investment in discovery research and early drug development.

In November [removed: 2020,] [added: 2021,] Merck’s Board of Directors approved an increase to the Company’s quarterly dividend, raising it to [removed: $0.65] [added: $0.69] per share from [removed: $0.61] [added: $0.65] per share on the Company’s outstanding common stock.

During [removed: 2020,] [added: 2021,] the Company returned $7.5 billion to shareholders through dividends and share repurchases.

[removed: *COVID-19*][added: COVID-19 Update]

[removed: Overall, in response to] [added: During] the COVID-19 [removed: pandemic,] [added: pandemic] Merck [removed: remains] [added: has remained] focused on protecting the safety of its employees, ensuring that its supply of medicines and vaccines reaches its patients, contributing its scientific expertise to the development of [added: an] antiviral [removed: approaches,] [added: therapy, supporting efforts to expand manufacturing capacity] and [added: supply of SARS-CoV-2/COVID-19 medicines and vaccines (see below), and] supporting health care providers and Merck’s communities.

In 2020, the estimated negative impact of [removed: the COVID-19 pandemic] [added: COVID-19-related disruptions] to Merck’s sales was approximately [removed: $2.5] [added: $2.1] billion, [removed: largely] [added: of which approximately $2.0 billion was] attributable to the Pharmaceutical [removed: segment, with] [added: segment and] approximately $50 million [added: was] attributable to the Animal Health segment.

Operating expenses were positively affected in 2020 by approximately [removed: $600] [added: $500] million primarily due to lower promotional and selling costs, as well as lower research and development expenses, net of investments in COVID-19-related antiviral and vaccine research programs.

[removed: *Pricing*][added: Pricing]

Changes to the U.S. health care system as part of health care [removed: reform,] [added: reform enacted in prior years,] as well as increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid, and private sector beneficiaries, have contributed to pricing pressure.

[added: In addition, the Company’s revenue performance in 2021 was negatively] affected by other cost-reduction measures taken by governments and other [removed: third-parties] [added: third parties] to lower health care costs.

[removed: *Sales*][added: Sales]

| *($ in millions)* | | | [removed: 2020] [added: 2021] | | | | | | % Change | | | | | | % Change Excluding Foreign Exchange | | | | | | [removed: 2019] [added: 2020] | | | | | | % Change | | | | | | % Change Excluding Foreign Exchange | | | | | | [removed: 2018] [added: 2019] | | |

Worldwide sales grew [removed: 2%] [added: 17%] in [removed: 2020] [added: 2021 primarily] due to higher sales in the oncology franchise [removed: reflecting] [added: largely driven by] strong growth of [removed: *Keytruda*, as well as] [added: *Keytruda* and] increased alliance revenue from Lynparza and [removed: Lenvima.][added: Lenvima, as well as higher sales in the vaccines franchise, primarily attributable to growth in *Gardasil/Gardasil* 9, *Varivax* and *ProQuad*.]

Also contributing to revenue growth [added: in 2021] were higher sales [removed: of certain vaccines, including *Gardasil/Gardasil* 9 and *Pneumovax* 23, as well as increased] [added: in the virology franchise attributable to molnupiravir, higher] sales [removed: of certain] [added: in the] hospital acute care [removed: products, including *Prevymis*] [added: franchise, reflecting growth in *Bridion*] and [removed: *Bridion.* Higher] [added: *Prevymis*, as well as higher] sales of animal health [removed: products also drove revenue growth in 2020.][added: products.]

Sales in the [removed: United States] [added: U.S.] grew [removed: 2%] [added: 14%] in [removed: 2020] [added: 2021] primarily driven by higher sales of *Keytruda*, [added: sales of molnupiravir, higher sales of *Bridion*, *Gardasil 9*, *Varivax* and *ProQuad*,] increased alliance revenue from Lynparza and Lenvima, [removed: and higher sales of animal health products.]

[removed: The increase in international] [added: International] sales [added: increased 20% in 2021] primarily [removed: reflects] [added: due to] growth in [removed: *Keytruda*,] *Gardasil/Gardasil* 9, [added: *Keytruda*, sales of molnupiravir,] increased alliance revenue from [removed: Lynparza,] [added: Lynparza and Lenvima,] as well as higher sales of [removed: *Pneumovax* 23, *Prevymis*, *Januvia*] [added: *Januvia/Janumet*, *Bridion*, *Prevymis*] and animal health products.

International sales represented [removed: 56%] [added: 54% and 53%] of total sales in [removed: both 2020] [added: 2021] and [removed: 2019.][added: 2020, respectively.]

Spin-Off of Organon & Co.

The historical results of the 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 3 to the consolidated financial statements).

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| Sales | | | $ | 48,704 | | | | | 17 | | % | | | | 16 | | % | | | | $ | 41,518 | | | | | 6 | | % | | | | 8 | | % | | | | $ | 39,121 | |

| GAAP | | | $ | 12,345 | | | | | * | | | | | | * | | | | | | $ | 4,519 | | | | | (21) | | % | | | | (16) | | % | | | | $ | 5,690 | |

| Non-GAAP *(1)* | | | $ | 15,282 | | | | | 33 | | % | | | | 31 | | % | | | | $ | 11,506 | | | | | 20 | | % | | | | 23 | | % | | | | $ | 9,617 | |

| GAAP | | | $ | 4.86 | | | | | * | | | | | | * | | | | | | $ | 1.78 | | | | | (19) | | % | | | | (15) | | % | | | | $ | 2.21 | |

| Non-GAAP *(1)* | | | $ | 6.02 | | | | | 33 | | % | | | | 32 | | % | | | | $ | 4.53 | | | | | 21 | | % | | | | 25 | | % | | | | $ | 3.73 | |

During 2021, Merck delivered on its strategic priorities by executing commercially to drive strong revenue and earnings growth in the year, completing key business development transactions, accelerating its broad pipeline, and achieving notable regulatory milestones.

Also, on June 2, 2021, Merck completed the spin-off of Organon.

The historical results of the 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.

Additionally, revenue in 2021 reflects the benefit of sales of molnupiravir, an investigational oral antiviral COVID-19 treatment.

As discussed below, COVID-19-related disruptions negatively affected sales in 2021, but to a lesser extent than in 2020, which benefited year-over-year sales growth.

Merck continues to execute scientifically compelling business development opportunities to augment its pipeline.

In November 2021, Merck acquired Acceleron Pharma Inc. (Acceleron), a publicly traded biopharmaceutical company evaluating the transforming growth factor (TGF)-beta superfamily of proteins through the development of pulmonary and hematologic therapies.

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.

Additionally, Merck entered into a collaboration with Gilead Sciences, Inc. (Gilead) to jointly develop and commercialize long-acting treatments in HIV.

In 2021, Merck received over 30 approvals and filed over 20 New Drug Applications (NDAs) and supplemental Biologics License Applications (BLAs) across the U.S., the EU, Japan and China.

*Keytruda* received approval for additional indications in the U.S. and/or internationally as monotherapy in the therapeutic areas of breast, colorectal, cutaneous squamous cell, esophageal, melanoma and renal cell cancers, as well as in combination with chemotherapy in the therapeutic areas of breast, cervical, gastric or gastroesophageal junction cancers.

*Keytruda* was also approved in combination with Lenvima both for the treatment of certain adult patients with endometrial cancer and for the treatment of renal cell cancer.

Lenvima is being developed in collaboration with Eisai Co., Ltd. (Eisai).

Additionally, the U.S. Food and Drug Administration (FDA) approved *Welireg* (belzutifan), an oral hypoxia-inducible factor-2 alpha (HIF-2α) inhibitor, for the treatment of adult patients with von Hippel-Lindau (VHL)

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

disease who require therapy for associated renal cell carcinoma (RCC), central nervous system hemangioblastomas, or pancreatic neuroendocrine tumors, not requiring immediate surgery.

Also in 2021, as updated in February 2022, the FDA granted Emergency Use Authorization (EUA) for molnupiravir, an investigational oral antiviral COVID-19 treatment being developed in a collaboration with Ridgeback Biotherapuetics LP (Ridgeback).

Molnupiravir also received conditional marketing authorization in the United Kingdom (UK) and Special Approval for Emergency in Japan.

Also in 2021, the FDA and the European Commission (EC) approved *Vaxneuvance* (Pneumococcal 15-valent Conjugate Vaccine), a pneumococcal conjugate vaccine for use in adults.

In January 2022, the Japan Ministry of Health, Labor and Welfare (MHLW) approved *Lyfnua* (gefapixant) for adults with refractory or unexplained chronic cough.

*Keytruda* is under review in the U.S. and/or internationally for supplemental indications for the treatment of certain patients with triple negative breast, cervical, endometrial, melanoma, renal cell and tumor mutation burden-high (TMBH) cancers.

Lynparza is under review for supplemental indications for the treatment of certain patients with breast and prostate cancers.

Lenvima is under review in combination with *Keytruda* for a supplemental indication for the treatment of certain patients with hepatocellular carcinoma (HCC).

MK-4482, molnupiravir, is under a rolling review by the European Medicines Agency (EMA); MK-7264, gefapixant, a selective, non-narcotic, orally-administered, investigational P2X3-receptor antagonist being developed for the treatment of refractory, chronic cough is under review in the U.S. and the EU; and *Vaxneuvance* (V114), a 15-valent pneumococcal conjugate vaccine, is under priority review by the FDA for the prevention of invasive pneumococcal disease in pediatric patients.

V114 is also under review in Japan for use in adults.

The Company’s Phase 3 oncology programs include:

- Lynparza as monotherapy for colorectal cancer and in combination with *Keytruda* for non-small-cell lung and small-cell lung cancers;

- Lenvima in combination with *Keytruda* for colorectal, esophageal, gastric, head and neck, melanoma and non-small-cell lung cancers;

- *Welireg* for RCC;

- MK-1308A, the coformulation of quavonlimab, Merck’s novel investigational anti-CTLA-4 antibody, and pembrolizumab for RCC;

- MK-3475, pembrolizumab subcutaneous for non-small-cell lung cancer (NSCLC);

- MK-7119, Tukysa (tucatinib), which is being developed in collaboration with Seagen Inc. (Seagen), for breast cancer;

The following section of this Form 10-K generally discusses 2020 and 2019 results and year-to-year comparisons between 2020 and 2019.

Discussion of 2018 results and year-to-year comparisons between 2019 and 2018 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed on February 26, 2020.

The Company previously had an Alliances segment that primarily included activity from the Company’s relationship with AstraZeneca LP related to sales of Nexium and Prilosec, which concluded in 2018.

*Planned Spin-Off of Women’s Health, Biosimilars and Established Brands into a New Company*

Organon will have development capabilities initially focused on late-stage development and life-cycle management and is expected over time to develop research capabilities in selected therapeutic areas.

The spin-off is expected to be completed late in the second quarter of 2021, subject to market and certain other conditions.

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Sales | | | $ | 47,994 | | | | | 2 | | % | | | | 4 | | % | $ | 46,840 | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Non-GAAP Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders *(1)* | | | $5.94 | | | | | | 14 | | % | | | | 17 | | % | $5.19 | | |

During 2020, Merck continued executing on its strategic priorities reporting year-over-year sales growth despite the business challenges posed by the COVID-19 pandemic.

However, in the latter part of the year, the Company experienced a partial recovery in the underlying demand for products across its key growth pillars.

Despite the pandemic, Merck employees across the organization continued their important work, enrolling and maintaining clinical studies, progressing the pipeline and ensuring the supply of and patient access to the Company’s portfolio of medically important medicines and vaccines.

The Company also executed on Merck’s capital allocation priorities by completing business development transactions and investing in its pipeline.

Additionally, the Company remains on track to complete the spin-off of Organon late in the second quarter of 2021 thereby creating two companies, each focused on their strengths and portfolios allowing them to pursue their respective market opportunities and business strategies.

In 2020, the products that will comprise Organon had total sales of $6.5 billion.

To expand its oncology presence, Merck completed the acquisitions of ArQule, Inc. (ArQule), a biopharmaceutical company focused on kinase inhibitor discovery and development for the treatment of cancer and other diseases; and VelosBio Inc. (VelosBio), a clinical-stage biopharmaceutical company committed to developing first-in-class cancer therapies targeting receptor tyrosine kinase-like orphan receptor 1 (ROR1) currently being evaluated for the treatment of patients with hematologic malignancies and solid tumors.

Additionally, Merck entered into strategic collaboration agreements with Seagen to gain access to ladiratuzumab vedotin, an investigational antibody-drug conjugate targeting LIV-1, and Tukysa (tucatinib), a small molecule tyrosine kinase inhibitor for the treatment of human epidermal growth factor receptor 2 (HER2)-positive cancers.

To augment Merck’s animal health business, the Company acquired the U.S. rights to Sentinel Flavor Tabs and Sentinel Spectrum Chews.

As part of industry-wide efforts to develop solutions to the pandemic, the Company acquired OncoImmune, a company developing a therapeutic candidate for the treatment of patients hospitalized with COVID-19; and Themis Bioscience GmbH (Themis), a company focused on vaccines and immune-modulation therapies for infectious diseases, including a COVID-19 vaccine candidate.

Additionally, Merck entered into

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

strategic collaborations with Ridgeback Biotherapeutics LP (Ridgeback Bio) to develop an orally available antiviral candidate in clinical development for the treatment of patients with COVID-19; and with the International AIDS Vaccine Initiative, Inc. (IAVI) to develop an investigational vaccine against SARS-CoV-2 being studied for the prevention of COVID-19.

In January 2021, the Company announced it was discontinuing development of the COVID-19 vaccine candidates (see Note 3 to the consolidated financial statements).

*Keytruda* received approval in the United States as monotherapy in the therapeutic areas of cutaneous squamous cell carcinoma (cSCC), metastatic microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) colorectal cancer, non-muscle invasive bladder cancer (NMIBC) and tumor mutational burden-high (TMB-H) solid tumors, as well as in combination with chemotherapy for the treatment of triple-negative breast cancer (TNBC).

Merck also received approval in the United States for an every six weeks (Q6W) dosing regimen across all adult indications.

Additionally, *Keytruda* received approval in China for the treatment of certain patients with head and neck squamous cell carcinoma (HNSCC) and in both China and Japan for the treatment of certain patients with esophageal squamous cell carcinoma (ESCC).

Lynparza, which is being developed in collaboration with AstraZeneca PLC (AstraZeneca), received approval in the United States: in combination with bevacizumab as a first-line maintenance treatment of certain adult patients with advanced epithelial ovarian, fallopian tube or primary peritoneal cancer who are in complete or partial response to first-line platinum-based chemotherapy; and for the treatment of certain adult patients with metastatic castration-resistant prostate cancer (mCRPC) following progression on prior treatment.

Additionally, Lynparza was approved in the European Union (EU): as monotherapy for the treatment of adult patients with mCRPC and *BRCA*1/2 mutations who have progressed following a prior therapy; and for the maintenance treatment of certain adult patients with metastatic adenocarcinoma of the pancreas.

Also in 2020, *Gardasil* 9 was approved for use in women and girls in Japan where it is marketed as *Silgard* 9.

Additionally, in 2020, the U.S. Food and Drug and Administration (FDA) granted accelerated approval for an expanded indication for *Gardasil* 9 for the prevention of oropharyngeal and other head and neck cancers caused by certain HPV types.

*Keytruda* is under review in United States and/or internationally for the treatment of certain patients with TNBC, classical Hodgkin Lymphoma (cHL), colorectal cancer, cSCC, esophageal and gastric cancer.

Lenvima is under review in Japan as monotherapy for the treatment of thymic cancer.

V114, an investigational 15-valent pneumococcal conjugate vaccine, is under priority review by the FDA for the prevention of invasive pneumococcal disease in adults 18 years of age and older.

The European Medicines Agency (EMA) is also reviewing an application for licensure of V114 in adults.

The Company is involved in litigation challenging the validity of several Pfizer Inc. patents that relate to pneumococcal vaccine technology in the United States and several foreign jurisdictions.

Also within oncology, MK-6482, belzutifan, an investigational hypoxia-inducible factor-2 alpha (HIF-2α) inhibitor being evaluated for the treatment of patients with von Hippel-Lindau disease-associated renal cell carcinoma (RCC), received Breakthrough Therapy designation from the FDA.

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

Human health vaccine products consist of preventive pediatric, adolescent and adult [removed: vaccines, primarily administered at physician offices.][added: vaccines.]

[removed: In February 2020,] [added: On June 2, 2021,] Merck [removed: announced its intention to] [added: completed the] spin-off (the Spin-Off) [added: 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 [removed: consist] [added: consisted] of dermatology, non-opioid pain management, respiratory, [removed: and] select cardiovascular [removed: products including *Zetia* (ezetimibe) and *Vytorin* (ezetimibe/simvastatin),] [added: products,] as well as the rest of Merck’s diversified brands franchise.

Merck’s existing research pipeline programs [removed: will] continue to be owned and developed within Merck as planned.

| *($ in millions)* | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| *Keytruda* | | | [removed: 14,380] [added: 17,186] | | | | | | [removed: 11,084] [added: 14,380] | | | | | | [removed: 7,171] [added: 11,084] | | |

| *Januvia/Janumet* | | | [removed: 5,276] [added: 5,288] | | | | | | [removed: 5,524] [added: 5,276] | | | | | | [removed: 5,914] [added: 5,524] | | |

| *Gardasil/Gardasil* 9 | | | [removed: 3,938] [added: 5,673] | | | | | | [removed: 3,737] [added: 3,938] | | | | | | [removed: 3,151] [added: 3,737] | | |

| *ProQuad/M-M-R* II*/Varivax* | | | [removed: 1,878] [added: 2,135] | | | | | | [removed: 2,275] [added: 1,878] | | | | | | [removed: 1,798] [added: 2,275] | | |

| *Bridion* | | | [removed: 1,198] [added: 1,532] | | | | | | [removed: 1,131] [added: 1,198] | | | | | | [removed: 917] [added: 1,131] | | |

| *Pneumovax* 23 | | | [removed: 1,087] [added: 893] | | | | | | [removed: 926] [added: 1,087] | | | | | | [removed: 907] [added: 926] | | |

| *Isentress/Isentress HD* | | | [removed: 857] [added: 769] | | | | | | [removed: 975] [added: 857] | | | | | | [removed: 1,140] [added: 975] | | |

| *Simponi* | | | [removed: 838] [added: 825] | | | | | | [removed: 830] [added: 838] | | | | | | [removed: 893] [added: 830] | | |

| *RotaTeq* | | | [removed: 797] [added: 807] | | | | | | [removed: 791] [added: 797] | | | | | | [removed: 728] [added: 791] | | |

| Alliance revenue - Lynparza*(1)* | | | [removed: 725] [added: 989] | | | | | | [removed: 444] [added: 725] | | | | | | [removed: 187] [added: 444] | | |

| Alliance revenue - Lenvima*(1)* | | | [removed: 580] [added: 704] | | | | | | [removed: 404] [added: 580] | | | | | | [removed: 149] [added: 404] | | |

| Animal Health | | | [removed: 4,703] [added: 5,568] | | | | | | [removed: 4,393] [added: 4,703] | | | | | | [removed: 4,212] [added: 4,393] | | |

| Livestock | | | [removed: 2,939] [added: 3,295] | | | | | | [removed: 2,784] [added: 2,939] | | | | | | [removed: 2,630] [added: 2,784] | | |

| Companion Animals | | | [removed: 1,764] [added: 2,273] | | | | | | [removed: 1,609] [added: 1,764] | | | | | | [removed: 1,582] [added: 1,609] | | |

Human health vaccine products consist of preventive pediatric, adolescent and adult [removed: vaccines, primarily administered at physician offices.][added: vaccines.]

*Keytruda* (pembrolizumab), the Company’s anti-PD-1 (programmed death receptor-1) therapy, as monotherapy for the treatment of certain patients with cervical cancer, classical Hodgkin Lymphoma (cHL), cutaneous squamous cell carcinoma (cSCC), esophageal [removed: cancer, gastric] or gastroesophageal junction [removed: adenocarcinoma,] [added: (GEJ) carcinoma,] head and neck squamous cell carcinoma (HNSCC), hepatocellular carcinoma (HCC), non-small-cell lung cancer (NSCLC), [removed: small-cell lung cancer (SCLC),] melanoma, Merkel cell carcinoma, microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) [removed: cancer,] [added: cancer (solid tumors),] including MSI-H/dMMR colorectal [removed: cancer,] [added: cancer (CRC),] primary mediastinal large B-cell lymphoma (PMBCL), tumor mutational burden-high (TMB-H) [removed: cancer,] [added: cancer (solid tumors),] and urothelial carcinoma, including non-muscle invasive bladder cancer.

*Keytruda* is also approved for the treatment of certain patients in combination with chemotherapy for metastatic squamous and non-squamous NSCLC, in combination with chemotherapy for HNSCC, in combination with [added: trastuzumab, fluoropyrimidine- and platinum-containing] chemotherapy for [added: human epidermal growth factor 2 (HER2)-positive gastric or GEJ adenocarcinoma, in combination with platinum-and fluoropyrimidine-based chemotherapy for esophageal or GEJ carcinoma, in combination with chemotherapy, with or without bevacizumab, for cervical cancer, in combination with chemotherapy for] triple-negative breast [removed: cancer,] [added: cancer (TNBC),] in combination with axitinib for [added: advanced] renal cell [removed: carcinoma,] [added: carcinoma (RCC),] and in combination with lenvatinib for endometrial [removed: carcinoma; and *Emend* (aprepitant) for the prevention of certain chemotherapy-induced nausea and vomiting.][added: carcinoma or RCC.]

In addition, the Company recognizes alliance revenue related to sales of Lynparza (olaparib), an oral poly (ADP-ribose) polymerase (PARP) inhibitor, for certain types of advanced ovarian, breast, pancreatic, and prostate cancers; and Lenvima (lenvatinib) for certain types of [removed: thyroid cancer, hepatocellular carcinoma, in combination with everolimus for certain patients with renal cell carcinoma, and in combination with *Keytruda* for certain patients with endometrial carcinoma.]

[added: *Gardasil* (Human Papillomavirus Quadrivalent \[Types 6, 11, 16 and 18\] Vaccine, Recombinant)/*Gardasil* 9 (Human Papillomavirus 9-valent Vaccine, Recombinant), vaccines to help prevent certain diseases] caused by certain types of human papillomavirus (HPV); *ProQuad* (Measles, Mumps, Rubella and Varicella Virus Vaccine Live), a pediatric combination vaccine to help protect against measles, mumps, rubella and varicella; *M−M−R* II (Measles, Mumps and Rubella Virus Vaccine Live), a vaccine to help prevent measles, mumps and rubella; *Varivax* (Varicella Virus Vaccine Live), a vaccine to help prevent chickenpox (varicella); *Pneumovax* 23 (pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease; *RotaTeq* (Rotavirus Vaccine, Live Oral, Pentavalent), a vaccine to help protect against rotavirus gastroenteritis in infants and children; and *Vaqta* (hepatitis A vaccine, inactivated) indicated for the prevention of disease caused by hepatitis A virus in persons 12 months of age and older.

*Bridion* (sugammadex) Injection, a medication for the reversal of two types of neuromuscular blocking agents used during surgery; [removed: *Noxafil* (posaconazole), an antifungal agent for the prevention of certain invasive fungal infections;] *Prevymis* (letermovir) for the prophylaxis of cytomegalovirus (CMV) reactivation and disease in adult CMV-seropositive recipients \[R+\] of an allogeneic hematopoietic stem cell transplant; *Primaxin* (imipenem and cilastatin) for injection, an antibiotic for the treatment of certain bacterial infections; [added: *Noxafil* (posaconazole), an antifungal agent for the prevention of certain invasive fungal infections;] *Cancidas* (caspofungin acetate) for injection, an anti-fungal agent for the treatment of certain fungal infections; *Invanz* (ertapenem) for injection, an antibiotic for the treatment of certain bacterial infections; [removed: *Cubicin* (daptomycin for injection), an antibiotic for the treatment of certain bacterial infections;] and *Zerbaxa* (ceftolozane and tazobactam) for injection, a combination antibacterial and beta-lactamase inhibitor for the treatment of certain bacterial infections.

Set forth below is a summary of significant product approvals [added: and authorizations] received by the Company in [removed: 2020.][added: 2021.]

| *Keytruda* | | | [removed: December 2020] [added: June 2021] | | | [removed: NMPA] [added: EC] approved *Keytruda* [removed: as monotherapy] [added: in combination with platinum- and fluoropyrimidine-based chemotherapy] for the first-line treatment of patients with [added: locally advanced unresectable or] metastatic [added: carcinoma of the esophagus] or [removed: with unresectable, recurrent HNSCC] [added: HER2-negative GEJ adenocarcinoma in adults] whose tumors express PD-L1 (Combined Positive Score [removed: CPS ≥20) as determined by a fully validated test.] [added: \[CPS\] ≥10).] | | |

| [removed: November 2020] [added: October 2021] | | | FDA [removed: granted accelerated approval for] [added: approved] *Keytruda* in combination with [removed: chemotherapy] [added: chemotherapy, with or without bevacizumab,] for [added: the treatment of] patients with [removed: locally] [added: persistent,] recurrent [removed: unresectable] or metastatic [removed: triple‑negative breast] [added: cervical] cancer whose tumors express PD-L1 (CPS [removed: ≥10).] [added: ≥1) as determined by an FDA-approved test.] | | | | | |

| [removed: June 2020] [added: *Keytruda*] | | | [removed: FDA] [added: January 2021 | | | European Commission (EC)] approved *Keytruda* as monotherapy for the first-line treatment of [added: adult] patients with [removed: unresectable or metastatic] MSI-H or dMMR [removed: colorectal cancer. | | |] [added: CRC.] | | |

| [removed: June 2020] [added: July 2021] | | | FDA approved *Keytruda* as monotherapy for the treatment of patients with [removed: recurrent or metastatic] [added: locally advanced] cSCC that is not curable by surgery or radiation. | | | | | |

| [removed: November 2020] [added: Lynparza*(1)*] | | | [removed: EC] [added: June 2021 | | | NMPA] approved Lynparza as monotherapy for the treatment of adult patients with [added: germline or somatic *BRCA*\-mutated] metastatic castration-resistant prostate cancer [removed: (mCRPC) and BRCA1/2 mutations (germline and/or somatic)] who have progressed following [removed: a] prior [removed: therapy] [added: treatment] that included a new hormonal [removed: agent. | | |] [added: agent (abiraterone, enzalutamide).] | | |

[removed: *(3)* *Being] [added: *(11)Being] commercialized and promoted in a worldwide, except Japan, collaboration with Pfizer Inc.*

In the [removed: United States,] [added: U.S.,] federal and state governments for many years have pursued methods to reduce the cost of drugs and vaccines for which they pay.

The rule provides comprehensive guidance on the calculation of [removed: Average Manufacturer Price] [added: AMP] and Best [removed: Price;] [added: Price,] two metrics [removed: utilized] [added: used] to determine the rebates drug manufacturers are required to pay to state Medicaid programs.

Effective January 1, 2023, this final rule [removed: also] changes the way that manufacturers must calculate Best [removed: Price,] [added: Price] in relation to certain patient support programs, including [removed: coupons, which also may result in an increase in the Company’s Medicaid rebates.][added: coupons.]

[removed: The] [added: Should this legal challenge fail, the] impact of [removed: these] [added: this] and other provisions in this final rule could adversely impact the Company’s business, cash flow, results of operations, financial condition and prospects.

[removed: *Other Legislative] [added: *Legislative] Changes*

The Company [removed: also] faces increasing pricing pressure [removed: globally] from managed care organizations, government agencies and programs that could negatively affect the Company’s sales and profit margins, including, [removed: in the United States] [added: through] (i) practices of managed care organizations, federal and state exchanges, and institutional and governmental purchasers, and (ii) federal laws and regulations related to Medicare and Medicaid, including the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and the [removed: ACA.][added: Patient Protection and Affordable Care Act (ACA).]

In November 2020, the Department of Health and Human Services Office of Inspector General [removed: (OIG)] issued a Final Rule that would, effective January 1, 2023, eliminate the Anti-Kickback Statute safe harbor for rebates paid to Medicare Part D plans or to [removed: pharmacy benefit managers (PBMs)] [added: PBMs] on behalf of such plans.

This rulemaking also established, effective January 1, 2021, a new safe harbor for point of sale discounts at the pharmacy counter and a new safe harbor for certain [removed: services] [added: service] arrangements between pharmaceutical manufacturers and PBMs.

Spin-Off of Organon & Co.

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| Total Sales | | | $ | 48,704 | | | | | $ | 41,518 | | | | | $ | 39,121 | |

| Pharmaceutical | | | 42,754 | | | | | | 36,610 | | | | | | 34,100 | | |

| Molnupiravir | | | 952 | | | | | | — | | | | | | — | | |

| Other Revenues*(2)* | | | 382 | | | | | | 205 | | | | | | 628 | | |

*Keytruda* is also approved for certain patients with high-risk early-stage TNBC in combination with chemotherapy as neoadjuvant treatment, and then continued as a single agent as adjuvant treatment after surgery.

*Keytruda* is also approved as a monotherapy for the adjuvant treatment of certain patients with RCC.

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

thyroid cancer, hepatocellular carcinoma, in combination with everolimus for certain patients with RCC, and in combination with *Keytruda* for certain patients with endometrial carcinoma or RCC.

Molnupiravir, an investigational oral antiviral COVID-19 medicine; *Isentress/Isentress HD* (raltegravir), an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection.

Adempas (riociguat), a cardiovascular drug for the treatment of pulmonary arterial hypertension; Verquvo (vericiguat), a medicine to reduce the risk of cardiovascular death and heart failure hospitalization following a hospitalization for heart failure or need for outpatient intravenous diuretics in certain adults with symptomatic chronic heart failure and reduced ejection fraction.

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

2021 Product Approvals and Authorizations

| March 2021 | | | EC approved *Keytruda* as monotherapy for the treatment of adult and pediatric patients aged 3 years and older with relapsed or refractory cHL who have failed autologous stem cell transplant (ASCT) or following at least two prior therapies when ASCT is not a treatment option. | | | | | |

| March 2021 | | | U.S. Food and Drug Administration (FDA) approved *Keytruda* in combination with platinum- and fluoropyrimidine-based chemotherapy for the treatment of patients with locally advanced or metastatic esophageal or GEJ (tumors with epicenter 1 to 5 centimeters above the GEJ) carcinoma that is not amenable to surgical resection or definitive chemoradiation. | | | | | |

| May 2021 | | | FDA approved *Keytruda*, in combination with trastuzumab, fluoropyrimidine- and platinum-containing chemotherapy, for the first-line treatment of patients with locally advanced unresectable or metastatic HER2-positive gastric or GEJ adenocarcinoma. | | | | | |

| June 2021 | | | China’s National Medical Products Administration (NMPA) approved *Keytruda* as a monotherapy for the first-line treatment of patients with unresectable or metastatic MSI-H or dMMR CRC that is KRAS, NRAS and BRAF all wild-type. | | | | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| August 2021 | | | Japan Pharmaceuticals and Medical Devices Agency (PMDA) approved *Keytruda* for the treatment of patients with PD-L1-positive, hormone receptor-negative and HER2-negative, inoperable or recurrent breast cancer. | | | | | |

| August 2021 | | | PMDA approved *Keytruda* for the treatment of patients with unresectable, advanced or recurrent MSI-H CRC. | | | | | |

| November 2021 | | | FDA approved *Keytruda* for the adjuvant treatment of patients with RCC at intermediate-high or high risk of recurrence following nephrectomy, or following nephrectomy and resection of metastatic lesions. | | | | | |

| November 2021 | | | EC approved *Keytruda* plus Lenvima as a first-line treatment for adult patients with advanced RCC. | | | | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| *Keytruda* | | | November 2021 | | | EC approved *Keytruda* plus Lenvima for the treatment of advanced or recurrent endometrial carcinoma in adults who have disease progression on or following prior treatment with a platinum‑containing therapy in any setting and who are not candidates for curative surgery or radiation. | | |

| November 2021 | | | PMDA approved *Keytruda* in combination with chemotherapy (5-fluorouracil plus cisplatin) for the first-line treatment of patients with radically unresectable, advanced or recurrent esophageal carcinoma. | | | | | |

| December 2021 | | | FDA approved *Keytruda* as a monotherapy for the adjuvant treatment of adult and pediatric (12 years and older) patients with stage IIB or IIC melanoma following complete resection. The FDA also expanded the indication for *Keytruda* as adjuvant treatment for stage III melanoma following complete resection to include pediatric patients (12 years and older). | | | | | |

| December 2021 | | | Japan’s Ministry of Health, Labor and Welfare (MHLW) approved *Keytruda* in combination with Lenvima for the treatment of patients with unresectable, advanced or recurrent endometrial carcinoma that progressed after cancer chemotherapy. | | | | | |

| molnupiravir*(2)* | | | December 2021 | | | FDA granted Emergency Use Authorization (EUA) for molnupiravir to treat mild to moderate COVID-19 in adults with positive results of direct SARS-CoV-2 viral testing, and who are at high risk for progression to severe COVID-19, including hospitalization or death, and for whom alternative COVID-19 treatment options authorized by the FDA are not accessible or clinically appropriate. | | |

| December 2021 | | | MHLW granted molnupiravir Special Approval for Emergency for the treatment of infectious disease caused by SARS-CoV-2. | | | | | |

| *Vaxneuvance* | | | July 2021 | | | FDA approved *Vaxneuvance* for active immunization for the prevention of invasive disease caused by *Streptococcus* pneumoniae serotypes 1, 3, 4, 5, 6A, 6B, 7F, 9V, 14, 18C, 19A, 19F, 22F, 23F and 33F in adults 18 years of age and older. | | |

| December 2021 | | | EC approved *Vaxneuvance* for active immunization for the prevention of invasive disease and pneumonia caused by *Streptococcus pneumoniae* in individuals 18 years of age and older. | | | | | |

| Verquvo*(3)* | | | January 2021 | | | FDA approved Verquvo to reduce the risk of cardiovascular death and heart failure (HF) hospitalization following a hospitalization for heart failure or need for outpatient intravenous (IV) diuretics in adults with symptomatic chronic HF and ejection fraction less than 45%. | | |

| July 2021 | | | EC approved Verquvo for the treatment of symptomatic chronic heart failure in adult patients with reduced ejection fraction who are stabilized after a recent decompensation event requiring IV therapy. | | | | | |

| *Welireg* | | | August 2021 | | | FDA approved *Welireg* for adult patients with von Hippel-Lindau (VHL) disease who require therapy for associated RCC, central nervous system hemangioblastomas, or pancreatic neuroendocrine tumors, not requiring immediate surgery. | | |

*(2)* *Being jointly developed and commercialized in a worldwide collaboration with Ridgeback Biopharmaceuticals LP.

Molnupiravir has not been approved by the FDA but has been authorized for emergency use.*

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

In several international markets, government-mandated pricing actions have reduced prices of generic and patented drugs.

In addition, the Company’s revenue performance in 2021 was negatively affected by other cost-reduction measures taken by governments and other third parties to lower health care costs.

The Company previously had an Alliances segment that primarily included activity from the Company’s relationship with AstraZeneca LP related to sales of Nexium and Prilosec, which concluded in 2018.

Planned Spin-Off of Women’s Health, Biosimilars and Established Brands into a New Company

The distribution is expected to qualify as tax-free to the Company and its shareholders for U.S. federal income tax purposes.

Organon will have development capabilities initially focused on late-stage development and life-cycle management, and is expected over time to develop research capabilities in selected therapeutic areas.

The Spin-Off is expected to be completed late in the second quarter of 2021, subject to market and certain other conditions.

See “Risk Factors - Risks Related to the Proposed Spin-Off of Organon.”

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| Total Sales | | | $ | 47,994 | | | | | $ | 46,840 | | | | | $ | 42,294 | |

| Pharmaceutical | | | 43,021 | | | | | | 41,751 | | | | | | 37,689 | | |

| *Implanon/Nexplanon* | | | 680 | | | | | | 787 | | | | | | 703 | | |

| *Zetia/Vytorin* | | | 664 | | | | | | 874 | | | | | | 1,355 | | |

| Other Revenues*(2)* | | | 270 | | | | | | 696 | | | | | | 393 | | |

*Gardasil* (Human Papillomavirus Quadrivalent \[Types 6, 11, 16 and 18\] Vaccine, Recombinant)/*Gardasil* 9 (Human Papillomavirus 9-valent Vaccine, Recombinant), vaccines to help prevent certain diseases

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

*Isentress/Isentress HD* (raltegravir), an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection; and *Zepatier* (elbasvir and grazoprevir) for the treatment of adult patients with chronic hepatitis C virus (HCV) genotype (GT) 1 or GT4 infection, with ribavirin in certain patient populations.

*Zetia* (ezetimibe) (marketed as *Ezetrol* in most countries outside the United States); *Vytorin* (ezetimibe/simvastatin) (marketed as *Inegy* outside the United States); *Atozet* (ezetimibe and atorvastatin) (marketed outside of the United States) and *Rosuzet* (ezetimibe and rosuvastatin) (marketed outside of the United States), cholesterol modifying medicines; and Adempas (riociguat), a cardiovascular drug for the treatment of pulmonary arterial hypertension.

Women’s Health

*Implanon* (etonogestrel implant), a single-rod subdermal contraceptive implant/*Nexplanon* (etonogestrel implant), a single, radiopaque, rod-shaped subdermal contraceptive implant; and *NuvaRing* (etonogestrel/ethinyl estradiol vaginal ring), a vaginal contraceptive product.

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

2020 Product Approvals

| *Dificid* *(1)* | | | January 2020 | | | U.S. Food and Drug Administration (FDA) approved *Dificid* as an oral suspension, and *Dificid* tablets for the treatment of Clostridioides (formerly Clostridium) difficile-associated diarrhea in children aged six months and older. | | |

| *Gardasil* | | | November 2020 | | | China’s National Medical Products Administration (NMPA) granted expanded approval for *Gardasil* for use in girls and women from 9 to 45 years of age. | | |

| *Gardasil* 9 | | | December 2020 | | | Japan’s Ministry of Health, Labour and Welfare (MHLW) approved additional indication, dosage and administrations of *Gardasil 9* (marketed as *Silgard* 9) for the prevention of anal cancer (squamous cell cancer) and precursor lesions (anal intraepithelial neoplasia (AIN) grade 1/2/3) caused by HPV types 6, 11, 16 and 18 for individuals 9 years and older and for Genital Warts (condyloma acuminate) for men 9 years and older. | | |

| July 2020 | | | Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) approved *Gardasil* 9 for use in girls and women 9 years and older for the prevention of cervical cancer, certain cervical, vaginal and vulvar precancers, and genital warts caused by the HPV types covered by the vaccine. | | | | | |

| June 2020 | | | FDA granted accelerated approval for an expanded indication for *Gardasil 9* for the prevention of oropharyngeal and other head and neck cancers caused by HPV Types 16, 18, 31, 33, 45, 52, and 58. | | | | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| October 2020 | | | FDA approved an expanded label for *Keytruda*, as monotherapy for the treatment of adult patients with relapsed or refractory cHL. | | | | | |

| August 2020 | | | PMDA approved *Keytruda* for use at an additional recommended dosage of 400 mg every six weeks (Q6W) administered as an intravenous infusion over 30 minutes across all adult indications, including *Keytruda* monotherapy and combination therapy. | | | | | |

| August 2020 | | | PMDA approved *Keytruda* for the treatment of patients whose tumors are PD-L1-positive, and have radically unresectable, advanced or recurrent esophageal squamous cell carcinoma (ESCC) who have progressed after chemotherapy. | | | | | |

| June 2020 | | | NMPA approved *Keytruda* as monotherapy for the treatment of patients with locally advanced or metastatic ESCC whose tumors express PD-L1 (CPS ≥10) as determined by a fully validated test, following failure of one prior line of systemic therapy. | | | | | |

| June 2020 | | | FDA granted accelerated approval for *Keytruda* as monotherapy for the treatment of adult and pediatric patients with unresectable or metastatic TMB-H \[≥10 mutations/megabase (mut/Mb)\] solid tumors, as determined by an FDA-approved test, that have progressed following prior treatment and who have no satisfactory alternative treatment options. | | | | | |

| April 2020 | | | FDA granted accelerated approval for *Keytruda* for use at an additional recommended dose of 400 mg every six weeks (Q6W) for all approved adult indications. | | | | | |

| January 2020 | | | FDA approved *Keytruda* for patients with Bacillus Calmette-Guerin (BCG)-unresponsive, high-risk, non-muscle invasive bladder cancer with carcinoma in situ with or without papillary tumors who are ineligible for or have elected not to undergo cystectomy. | | | | | |

| Koselugo*(2)* | | | April 2020 | | | FDA approved the kinase inhibitor Koselugo for the treatment of pediatric patients two years of age and older with neurofibromatosis type 1 (NF1) who have symptomatic, inoperable plexiform neurofibromas (PN). | | |

| Lenvima | | | November 2020 | | | NMPA approved Lenvima as a monotherapy for the treatment of differentiated thyroid cancer. | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| Lynparza*(2)* | | | December 2020 | | | PMDA approved Lynparza for the treatment of patients with *BRCA* gene-mutated (*BRCA*m) castration-resistant prostate cancer with distant metastasis. | | |

| December 2020 | | | PMDA approved Lynparza as maintenance treatment after platinum-based chemotherapy for patients with *BRCA*m curatively unresectable pancreas cancer. | | | | | |

| December 2020 | | | PMDA approved Lynparza as maintenance treatment after first-line chemotherapy containing bevacizumab (genetical recombination) in patients with homologous recombination repair deficient (HRD) ovarian cancer. | | | | | |

| November 2020 | | | The European Commission (EC) approved Lynparza for the maintenance treatment of adult patients with advanced (FIGO stages III and IV) high-grade epithelial ovarian, fallopian tube or primary peritoneal cancer who are in response (complete or partial) following completion of first-line platinum-based chemotherapy in combination with bevacizumab and whose cancer is associated with HRD-positive status defined by either a breast cancer susceptibility gene 1/2 (*BRCA*1/2) mutation and/or genomic instability. | | | | | |

“Financial Statements and Supplementary Data,” Note [removed: 10.][added: 11.]

As filed with the Securities and Exchange Commission on February 25, [removed: 2021][added: 2022]

For the Fiscal Year Ended December 31, [removed: 2020][added: 2021]

Number of shares of Common Stock ($0.50 par value) outstanding as of January 31, [removed: 2021: 2,530,315,668.][added: 2022: 2,527,733,606.]

Aggregate market value of Common Stock ($0.50 par value) held by non-affiliates on June 30, [removed: 2020] [added: 2021] based on closing price on June 30, [removed: 2020: $195,461,000,000.][added: 2021: $196,870,000,000.]

| Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 25, 2021,] [added: 24, 2022,] to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year covered by this report | | | | | | Part III | | |

| Item 1. | | | [removed: [Business](#iab6577be4c3840fd8181bdedf457fba5_13)] [added: [Business](#i1e1e934bfffd457891fb6e33dae50d64_13)] | | | | | | [removed: [1](#iab6577be4c3840fd8181bdedf457fba5_13)] [added: [1](#i1e1e934bfffd457891fb6e33dae50d64_13)] | | |

| Item 1A. | | | [Risk [removed: Factors](#iab6577be4c3840fd8181bdedf457fba5_55)] [added: Factors](#i1e1e934bfffd457891fb6e33dae50d64_52)] | | | | | | [removed: [26](#iab6577be4c3840fd8181bdedf457fba5_55)] [added: [27](#i1e1e934bfffd457891fb6e33dae50d64_52)] | | |

| | | | [Cautionary Factors that May Affect Future [removed: Results](#iab6577be4c3840fd8181bdedf457fba5_58)] [added: Results](#i1e1e934bfffd457891fb6e33dae50d64_55)] | | | | | | [removed: [41](#iab6577be4c3840fd8181bdedf457fba5_58)] [added: [41](#i1e1e934bfffd457891fb6e33dae50d64_55)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#iab6577be4c3840fd8181bdedf457fba5_61)] [added: Comments](#i1e1e934bfffd457891fb6e33dae50d64_58)] | | | | | | [removed: [42](#iab6577be4c3840fd8181bdedf457fba5_61)] [added: [43](#i1e1e934bfffd457891fb6e33dae50d64_58)] | | |

| Item 2. | | | [removed: [Properties](#iab6577be4c3840fd8181bdedf457fba5_64)] [added: [Properties](#i1e1e934bfffd457891fb6e33dae50d64_61)] | | | | | | [removed: [42](#iab6577be4c3840fd8181bdedf457fba5_64)] [added: [43](#i1e1e934bfffd457891fb6e33dae50d64_61)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#iab6577be4c3840fd8181bdedf457fba5_67)] [added: Proceedings](#i1e1e934bfffd457891fb6e33dae50d64_64)] | | | | | | [removed: [43](#iab6577be4c3840fd8181bdedf457fba5_67)] [added: [43](#i1e1e934bfffd457891fb6e33dae50d64_64)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#iab6577be4c3840fd8181bdedf457fba5_70)] [added: Disclosures](#i1e1e934bfffd457891fb6e33dae50d64_67)] | | | | | | [removed: [43](#iab6577be4c3840fd8181bdedf457fba5_70)] [added: [43](#i1e1e934bfffd457891fb6e33dae50d64_67)] | | |

| | | | [Executive Officers of the [removed: Registrant](#iab6577be4c3840fd8181bdedf457fba5_73)] [added: Registrant](#i1e1e934bfffd457891fb6e33dae50d64_70)] | | | | | | [removed: [44](#iab6577be4c3840fd8181bdedf457fba5_73)] [added: [44](#i1e1e934bfffd457891fb6e33dae50d64_70)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#iab6577be4c3840fd8181bdedf457fba5_79)] [added: Securities](#i1e1e934bfffd457891fb6e33dae50d64_76)] | | | | | | [removed: [45](#iab6577be4c3840fd8181bdedf457fba5_79)] [added: [46](#i1e1e934bfffd457891fb6e33dae50d64_76)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#iab6577be4c3840fd8181bdedf457fba5_85)] [added: Operations](#i1e1e934bfffd457891fb6e33dae50d64_79)] | | | | | | [removed: [47](#iab6577be4c3840fd8181bdedf457fba5_85)] [added: [48](#i1e1e934bfffd457891fb6e33dae50d64_79)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#iab6577be4c3840fd8181bdedf457fba5_127)] [added: Risk](#i1e1e934bfffd457891fb6e33dae50d64_121)] | | | | | | [removed: [78](#iab6577be4c3840fd8181bdedf457fba5_127)] [added: [78](#i1e1e934bfffd457891fb6e33dae50d64_121)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#iab6577be4c3840fd8181bdedf457fba5_130)] [added: Data](#i1e1e934bfffd457891fb6e33dae50d64_124)] | | | | | | [removed: [79](#iab6577be4c3840fd8181bdedf457fba5_130)] [added: [79](#i1e1e934bfffd457891fb6e33dae50d64_124)] | | |

| | | | | | | [Notes to Consolidated Financial [removed: Statements](#iab6577be4c3840fd8181bdedf457fba5_157)] [added: Statements](#i1e1e934bfffd457891fb6e33dae50d64_142)] | | | [removed: [83](#iab6577be4c3840fd8181bdedf457fba5_157)] [added: [83](#i1e1e934bfffd457891fb6e33dae50d64_142)] | | |

| | | | | | | [Report of Independent Registered Public Accounting [removed: Firm](#iab6577be4c3840fd8181bdedf457fba5_232)] [added: Firm](#i1e1e934bfffd457891fb6e33dae50d64_202)] | | | [removed: [136](#iab6577be4c3840fd8181bdedf457fba5_232)] [added: [140](#i1e1e934bfffd457891fb6e33dae50d64_202)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#iab6577be4c3840fd8181bdedf457fba5_238)] [added: Disclosure](#i1e1e934bfffd457891fb6e33dae50d64_205)] | | | | | | [removed: [138](#iab6577be4c3840fd8181bdedf457fba5_238)] [added: [143](#i1e1e934bfffd457891fb6e33dae50d64_205)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#iab6577be4c3840fd8181bdedf457fba5_241)] [added: Procedures](#i1e1e934bfffd457891fb6e33dae50d64_208)] | | | | | | [removed: [138](#iab6577be4c3840fd8181bdedf457fba5_241)] [added: [143](#i1e1e934bfffd457891fb6e33dae50d64_208)] | | |

| Item 9B. | | | [Other [removed: Information](#iab6577be4c3840fd8181bdedf457fba5_247)] [added: Information](#i1e1e934bfffd457891fb6e33dae50d64_214)] | | | | | | [removed: [139](#iab6577be4c3840fd8181bdedf457fba5_247)] [added: [144](#i1e1e934bfffd457891fb6e33dae50d64_214)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#iab6577be4c3840fd8181bdedf457fba5_253)] [added: Governance](#i1e1e934bfffd457891fb6e33dae50d64_220)] | | | | | | [removed: [140](#iab6577be4c3840fd8181bdedf457fba5_253)] [added: [145](#i1e1e934bfffd457891fb6e33dae50d64_220)] | | |

| Item 11. | | | [Executive [removed: Compensation](#iab6577be4c3840fd8181bdedf457fba5_256)] [added: Compensation](#i1e1e934bfffd457891fb6e33dae50d64_223)] | | | | | | [removed: [140](#iab6577be4c3840fd8181bdedf457fba5_256)] [added: [145](#i1e1e934bfffd457891fb6e33dae50d64_223)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and [removed: Related](#iab6577be4c3840fd8181bdedf457fba5_259)[ ](#iab6577be4c3840fd8181bdedf457fba5_259)[Stockholder Matters](#iab6577be4c3840fd8181bdedf457fba5_259)] [added: Related](#i1e1e934bfffd457891fb6e33dae50d64_226)[ ](#i1e1e934bfffd457891fb6e33dae50d64_226)[Stockholder Matters](#i1e1e934bfffd457891fb6e33dae50d64_226)] | | | | | | [removed: [141](#iab6577be4c3840fd8181bdedf457fba5_259)] [added: [146](#i1e1e934bfffd457891fb6e33dae50d64_226)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#iab6577be4c3840fd8181bdedf457fba5_262)] [added: Independence](#i1e1e934bfffd457891fb6e33dae50d64_229)] | | | | | | [removed: [141](#iab6577be4c3840fd8181bdedf457fba5_262)] [added: [146](#i1e1e934bfffd457891fb6e33dae50d64_229)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#iab6577be4c3840fd8181bdedf457fba5_265)] [added: Services](#i1e1e934bfffd457891fb6e33dae50d64_232)] | | | | | | [removed: [141](#iab6577be4c3840fd8181bdedf457fba5_265)] [added: [146](#i1e1e934bfffd457891fb6e33dae50d64_232)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#iab6577be4c3840fd8181bdedf457fba5_271)] [added: Schedules](#i1e1e934bfffd457891fb6e33dae50d64_238)] | | | | | | [removed: [142](#iab6577be4c3840fd8181bdedf457fba5_271)] [added: [147](#i1e1e934bfffd457891fb6e33dae50d64_238)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#iab6577be4c3840fd8181bdedf457fba5_283)] [added: Summary](#i1e1e934bfffd457891fb6e33dae50d64_250)] | | | | | | [removed: [146](#iab6577be4c3840fd8181bdedf457fba5_283)] [added: [151](#i1e1e934bfffd457891fb6e33dae50d64_250)] | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| [Part I](#i1e1e934bfffd457891fb6e33dae50d64_10) | | | | | | | | | | | |

| [Part II](#i1e1e934bfffd457891fb6e33dae50d64_73) | | | | | | | | | | | |

| | | | (a) | | | [Financial Statements](#i1e1e934bfffd457891fb6e33dae50d64_127) | | | [79](#i1e1e934bfffd457891fb6e33dae50d64_127) | | |

| | | | (b) | | | [Supplementary Data](#i1e1e934bfffd457891fb6e33dae50d64_2170) | | | [142](#i1e1e934bfffd457891fb6e33dae50d64_2170) | | |

| | | | [Management’s Report](#i1e1e934bfffd457891fb6e33dae50d64_211) | | | | | | [143](#i1e1e934bfffd457891fb6e33dae50d64_211) | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i1e1e934bfffd457891fb6e33dae50d64_2380) | | | | | | [144](#i1e1e934bfffd457891fb6e33dae50d64_2380) | | |

| [Part III](#i1e1e934bfffd457891fb6e33dae50d64_214) | | | | | | | | | | | |

| [Part IV](#i1e1e934bfffd457891fb6e33dae50d64_235) | | | | | | | | | | | |

| | | | [Signatures](#i1e1e934bfffd457891fb6e33dae50d64_253) | | | | | | [152](#i1e1e934bfffd457891fb6e33dae50d64_253) | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| 1.125% Notes due 2021 | | | MRK/21 | | | New York Stock Exchange | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| [Part I](#iab6577be4c3840fd8181bdedf457fba5_10) | | | | | | | | | | | |

| [Part II](#iab6577be4c3840fd8181bdedf457fba5_76) | | | | | | | | | | | |

| | | | (a) | | | [Financial Statements](#iab6577be4c3840fd8181bdedf457fba5_133) | | | [79](#iab6577be4c3840fd8181bdedf457fba5_133) | | |

| | | | [Management’s Report](#iab6577be4c3840fd8181bdedf457fba5_244) | | | | | | [138](#iab6577be4c3840fd8181bdedf457fba5_244) | | |

| [Part III](#iab6577be4c3840fd8181bdedf457fba5_247) | | | | | | | | | | | |

| [Part IV](#iab6577be4c3840fd8181bdedf457fba5_268) | | | | | | | | | | | |

| | | | [Signatures](#iab6577be4c3840fd8181bdedf457fba5_286) | | | | | | [147](#iab6577be4c3840fd8181bdedf457fba5_286) | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

Principal U.S. research facilities are located in Rahway and Kenilworth, New Jersey; West Point, Pennsylvania; [removed: Boston,] [added: Boston and Cambridge,] Massachusetts; South San Francisco, California; and Elkhorn, Nebraska (Animal Health).

Principal research facilities outside the [removed: United States] [added: U.S.] are located in the United Kingdom, Switzerland and China.

The Company also has production facilities for human health products at [removed: nine] [added: seven] locations in the [removed: United States] [added: U.S.] and Puerto Rico.

Outside the [removed: United States,] [added: U.S.,] through subsidiaries, the Company owns or has an interest in manufacturing plants or other properties in Japan, Singapore, South Africa, and other countries in Western Europe, Central and South America, and Asia.

A number of properties [removed: will be] [added: were] transferred to Organon in the Spin-Off.

Capital expenditures were [removed: $4.7] [added: $4.4] billion in [removed: 2020, $3.5] [added: 2021, $4.4] billion in [removed: 2019] [added: 2020] and [removed: $2.6] [added: $3.4] billion in [removed: 2018.][added: 2019.]

Abroad, such expenditures amounted to [removed: $2.0] [added: $1.6] billion in [removed: 2020, $1.6] [added: 2021, $1.8] billion in [removed: 2019,] [added: 2020,] and [removed: $1.1] [added: $1.5] billion in [removed: 2018.][added: 2019.]

The Company believes that its plants for the manufacture of products are suitable for their intended purposes and have capacities and projected capacities, including [removed: previously-disclosed] [added: previously disclosed] capital expansion projects, that will be adequate for current and projected needs for existing Company products.

In the U.S., these amounted to $2.8 billion in 2021, $2.6 billion in 2020 and $1.9 billion in 2019.

In the United States, these amounted to $2.7 billion in 2020, $1.9 billion in 2019 and $1.5 billion in 2018.

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

Executive Officers of the Registrant (ages as of February 1, [removed: 2021)][added: 2022)]

| Kenneth C. Frazier | | | [removed: 66] [added: 67] | | | [added: Executive Chairman (since July 2021); Prior to that,] Chairman, President and Chief Executive Officer [removed: (since December 2011)] | | |

| Sanat Chattopadhyay | | | [removed: 61] [added: 62] | | | Executive Vice President and President, Merck Manufacturing Division (since March 2016) | | |

| Robert M. Davis | | | [removed: 54] [added: 55] | | | [added: Chief] Executive [added: Officer and President (since July 2021); Executive] Vice President, Global Services, and Chief Financial Officer (since April [removed: 2016); Executive Vice President and Chief Financial Officer (April 2014-April] 2016) | | |

| Richard R. DeLuca, Jr. | | | [removed: 58] [added: 59] | | | Executive Vice President and President, Merck Animal Health (since September 2011) | | |

| Julie L. Gerberding | | | 65 | | | Executive Vice President and Chief Patient Officer, [removed: Strategic Communications, Global Public Policy and] Population Health [added: and Sustainability] (since July [removed: 2016); Executive Vice President for Strategic Communications, Global Public Policy and Population Health (January 2015-July] 2016) | | |

| Rita A. Karachun | | | [removed: 57] [added: 58] | | | Senior Vice President Finance - Global Controller (since March 2014) | | |

| Dean Li | | | [removed: 58] [added: 59] | | | President, Merck Research Laboratories (since January 2021); Senior Vice President, Discovery Sciences and Translational Medicine, Merck Research Laboratories (November 2017-January [removed: 2020);] [added: 2021);] Vice President, Translational Medicine (March 2017-November 2017); Prior to that, Chief Scientific Officer and Associate Vice President, University of Utah Health Sciences | | |

| Steven C. Mizell | | | [removed: 60] [added: 61] | | | Executive Vice President, Chief Human Resources Officer (since December [removed: 2016); Executive Vice President, Human Resources, Monsanto Company (August 2011-December] 2016) | | |

| Jennifer Zachary | | | [removed: 43] [added: 44] | | | Executive Vice President, General Counsel and Corporate Secretary (since January 2020); Executive Vice President and General Counsel (April 2018-January 2020); [added: Prior to that,] Partner, Covington & Burling LLP [removed: (January 2013-March 2018)] | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| Cristal Downing | | | 53 | | | Executive Vice President and Chief Communications & Public Affairs Officer (since August 2021); Vice President Medical Devices, Global Communications and Public Affairs Johnson & Johnson (December 2020-August 2021); Vice President Financial Communication, Johnson & Johnson (January 2018-December 2020); Prior to that, Senior Director Communications at Johnson & Johnson | | |

| Michael A. Klobuchar | | | 46 | | | Executive Vice President, Chief Strategy Officer (since July 2021); Senior Vice President, CFO of Merck R&D and Head of Global Portfolio and Alliance Management (January 2019-June 2021); Senior Vice President of Corporate Strategy and Planning and President of Emerging Businesses (December 2017-January 2019); Prior to that, Vice President, Global Business and Financial Planning | | |

| Lisa LeCointe-Cephas | | | 40 | | | Senior Vice President, Chief Ethics and Compliance Officer (since April 2021); Executive Director, Head of Global Investigations (February 2018 – April 2021); Prior to that, Senior Counsel, Litigation and Government Investigations, Bristol-Myers Squibb Company | | |

| Caroline Litchfield | | | 53 | | | Executive Vice President and Chief Financial Officer (since April 2021); Senior Vice President, Corporate Treasurer (January 2018-March 2021); Prior to that, Senior Vice President, Global Human Health | | |

| David M. Williams | | | 53 | | | Executive Vice President, Chief Information and Digital Officer (Since August 2020); Acting Chief Information and Digital Officer (December 2019-August 2020); Vice President and Chief Information Officer, Merck Animal Health (May 2017-December 2019); Prior to that, Associate Vice President and Chief Information Officer, Merck Animal Health | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

On February 16, 2022, the Company announced that Ms. Arpa Garay will lead Human Health Global Marketing and Mr. Jannie Oosthuizen will lead U.S. Human Health.

Both Ms. Garay and Mr. Oosthuizen will become Executive Officers of the Company, effective February 28, 2022.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Name | | | Age | | | Offices and Business Experience | | |

| Arpa Garay | | | 43 | | | President, Global Oncology and Digital (since January 2022); President, Global Pharmaceuticals, Commercial Analytics, Digital Marketing (March 2019-January 2022); Senior Vice President, U.S. Vaccines Business Unit (June 2017-March 2019); Prior to that, Managing Director MSD, Norway | | |

| Jannie Oosthuizen | | | 54 | | | Senior Vice President and President Merck U.S. Human Health (since January 2022); Senior Vice President and Head of Global Oncology Commercial (January 2021-December 2021); Senior Vice President and President of MSD K.K. (July 2016-December 2020) | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| Frank Clyburn | | | 56 | | | Executive Vice President, Chief Commercial Officer (since January 2019); President, Global Oncology Business Unit (October 2013-December 2018) | | |

| Michael W. Fleming | | | 62 | | | Senior Vice President, Chief Ethics and Compliance Officer (since March 2019); Senior Vice President, International Legal and Compliance (January 2017-March 2019); Vice President, International Legal and Compliance (July 2008-January 2017) | | |

| Michael T. Nally | | | 45 | | | Executive Vice President, Chief Marketing Officer (since January 2019); President, Global Vaccines, Global Human Health (September 2016-January 2019); Managing Director, United Kingdom and Ireland, Global Human Health (January 2014-September 2016) | | |

In February 2021, Merck announced that Kenneth C.

Frazier, chairman and chief executive officer, will retire as chief executive officer, effective June 30, 2021.

Mr. Frazier will continue to serve on Merck’s Board of Directors as executive chairman, for a transition period to be determined by the board.

The Merck Board of Directors has unanimously elected Robert M.

Davis, Merck’s current executive vice president, global services and chief financial officer, as chief executive officer, as well as a member of the board, effective July 1, 2021.

Mr. Davis will become president of Merck, effective April 1, 2021, at which time the Company’s operating divisions—Human Health, Animal Health, Manufacturing, and Merck Research Laboratories—will begin reporting to Mr. Davis.

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

As of January 31, [removed: 2021,] [added: 2022,] there were approximately [removed: 104,900] [added: 99,932] shareholders of record of the Company’s Common Stock.

Issuer purchases of equity securities for the three months ended December 31, [removed: 2020] [added: 2021] were as follows:

| | | | | | | | | | | | | | | | | | | [added: | | | | | |] ($ in millions) | | |

| Period | | | | | | Total Number of Shares Purchased*(1)* | | | | | | Average Price Paid Per Share | | | | | | [added: Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | | | |] Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs*(1)* | | |

[removed: *(1)The Company did not purchase any] [added: *(1)* *All] shares [added: purchased] during the [removed: three months ended December 31, 2020 under the] [added: period were made as part of a] plan approved by the Board of Directors in October 2018 to purchase up to $10 billion in Merck shares for its treasury.*

The following graph assumes a $100 investment on December 31, [removed: 2015,] [added: 2016,] and reinvestment of all dividends, in each of the Company’s Common [removed: Shares,] [added: Stock,] the S&P 500 Index, and a composite peer group of major U.S. and European-based pharmaceutical companies, which are: AbbVie Inc., Amgen Inc., AstraZeneca plc, Bristol-Myers Squibb Company, Johnson & Johnson, Eli Lilly and Company, GlaxoSmithKline plc, Novartis AG, Pfizer Inc., Roche Holding AG, and Sanofi SA.

Comparison of Five-Year Cumulative Total [removed: Return*][added: Return]

| | | | End of Period Value | | | | | | [removed: 2020/2015] [added: 2021/2016] CAGR* | | |

[removed: ][added: ]

| | | | [removed: 2015 | | |] 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | [added: 2021 | | |]

* Peer group average was calculated on a market cap weighted [removed: basis.*][added: basis as of December 31, 2016.*]

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| October 1 — October 31 | | | | | | 246,194 | | | | | | $74.92 | | | | | | 246,194 | | | | | | $5,047 | | |

| November 1 — November 30 | | | | | | — | | | | | | — | | | | | | — | | | | | | $5,047 | | |

| December 1 — December 31 | | | | | | — | | | | | | — | | | | | | — | | | | | | $5,047 | | |

| Total | | | | | | 246,194 | | | | | | $74.92 | | | | | | 246,194 | | | | | | | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| MERCK | | | $159 | | | | | | 10% | | |

| PEER GROUP | | | 201 | | | | | | 15% | | |

| S&P 500 | | | 233 | | | | | | 18% | | |

| MERCK | | | 100.0 | | | 98.5 | | | 137.9 | | | 168.6 | | | 156.5 | | | 159.3 | | |

| PEER GROUP | | | 100.0 | | | 120.0 | | | 128.4 | | | 152.6 | | | 163.6 | | | 200.6 | | |

| S&P 500 | | | 100.0 | | | 121.8 | | | 116.5 | | | 153.1 | | | 181.3 | | | 233.3 | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| October 1 — October 31 | | | | | | — | | | | | | $0.00 | | | | | | $5,888 | | |

| November 1 — November 30 | | | | | | — | | | | | | $0.00 | | | | | | $5,888 | | |

| December 1 — December 31 | | | | | | — | | | | | | $0.00 | | | | | | $5,888 | | |

| Total | | | | | | — | | | | | | $0.00 | | | | | | $5,888 | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| MERCK | | | $180 | | | | | | 12% | | |

| PEER GRP. | | | 157 | | | | | | 9% | | |

| S&P 500 | | | 203 | | | | | | 15% | | |

| MERCK | | | 100.0 | | | 115.1 | | | 113.4 | | | 158.9 | | | 194.3 | | | 180.1 | | |

| PEER GRP. | | | 100.0 | | | 96.9 | | | 116.1 | | | 124.1 | | | 147.2 | | | 157.2 | | |

| S&P 500 | | | 100.0 | | | 112.0 | | | 136.4 | | | 130.4 | | | 171.4 | | | 203.0 | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

The consolidated balance sheet of Merck & Co., Inc. and subsidiaries as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] the notes to consolidated financial statements, and the report dated February 25, [removed: 2021] [added: 2022] of PricewaterhouseCoopers LLP, independent registered public accounting firm, are as follows:

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Selling, general and administrative | | | [removed: 10,468 | | | | | | 10,615] [added: 33] | | | | | | [removed: 10,102] [added: 6] | | |

| [removed: Research] [added: Research] and [removed: development] [added: development] | | | [removed: 13,558] [added: —] | | | | | | [removed: 9,872] [added: 27] | | | | | | [removed: 9,752] [added: 1] | | | [added: | | | 28 | | |]

| Restructuring costs | | | [removed: 578] [added: 1] | | | | | | [removed: 638] [added: 3] | | | | | | [removed: 632] [added: 12] | | |

| Other (income) expense, net | | | [removed: (886)] [added: (15)] | | | | | | [removed: 139] [added: 4] | | | | | | [removed: (402)] [added: 10] | | |

| Less: Net Income (Loss) Attributable to Noncontrolling Interests | | | [removed: 15] [added: 13] | | | | | | [removed: (66)] [added: 4] | | | | | | [removed: (27)] [added: (84)] | | |

| Net Income Attributable to Merck & Co., Inc. | | | $ | [removed: 7,067] [added: 13,049] | | | | | $ | [removed: 9,843] [added: 7,067] | | | | | $ | [removed: 6,220] [added: 9,843] | |

| Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders | | | [removed: $] | [removed: 2.79] | | | | | [removed: $] | [removed: 3.84] | | | | | [removed: $] | [removed: 2.34] | |

| Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders | | | [removed: $] | [removed: 2.78] | | | | | [removed: $] | [removed: 3.81] | | | | | [removed: $] | [removed: 2.32] | |

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Net Income Attributable to Merck & Co., Inc. | | | $ | [removed: 7,067] [added: 13,049] | | | | | $ | [removed: 9,843] [added: 7,067] | | | | | $ | [removed: 6,220] [added: 9,843] | |

| Other Comprehensive [removed: Loss] [added: Income (Loss)] Net of Taxes: | | | | | | | | | | | | | | | | | |

| Net unrealized [removed: (loss)] gain [added: (loss)] on derivatives, net of reclassifications | | | [removed: (297)] [added: 410] | | | | | | [removed: (135)] [added: (297)] | | | | | | [removed: 297] [added: (135)] | | |

| Net unrealized (loss) gain on investments, net of reclassifications | | | [removed: (18)] [added: —] | | | | | | [removed: 96] [added: (18)] | | | | | | [removed: (10)] [added: 96] | | |

| Benefit plan net [removed: (loss)] gain [added: (loss)] and prior service [removed: (cost) credit,] [added: credit (cost),] net of amortization | | | [removed: (279)] [added: 1,769] | | | | | | [removed: (705)] [added: (279)] | | | | | | [removed: (425)] [added: (705)] | | |

| Cumulative translation adjustment | | | [removed: 153] [added: (423)] | | | | | | [removed: 96] [added: 153] | | | | | | [removed: (223)] [added: 96] | | |

| | | | [removed: (441)] [added: 1,756] | | | | | | [removed: (648)] [added: (441)] | | | | | | [removed: (361)] [added: (648)] | | |

| Comprehensive Income Attributable to Merck & Co., Inc. | | | $ | [removed: 6,626] [added: 14,805] | | | | | $ | [removed: 9,195] [added: 6,626] | | | | | $ | [removed: 5,859] [added: 9,195] | |

| | | | [removed: 2020] [added: 2021] | | | | | | [added: 2020 | | | | | |] 2019 | | |

| Cash and cash equivalents | | | [removed: $] | [removed: 8,062] | | [removed: | | |] $ | [removed: 9,676] [added: 12] | |

| Accounts receivable (net of allowance for doubtful accounts of [removed: $85] [added: $62] in [removed: 2020] [added: 2021] and [removed: $86] [added: $67] in [removed: 2019)] [added: 2020)] | | | [removed: 7,851] [added: 9,230] | | | | | | [removed: 6,778] [added: 6,803] | | |

| Inventories (excludes inventories of [removed: $2,197] [added: $2,194] in [removed: 2020] [added: 2021] and [removed: $1,480] [added: $2,070] in [removed: 2019] [added: 2020] classified in Other assets - see Note [removed: 7)] [added: 8)] | | | [removed: 6,310] [added: 5,953] | | | | | | [removed: 5,978] [added: 5,554] | | |

| Other current assets | | | [removed: 5,541] | | | [removed: | | | 4,277] [added: 867] | | |

| Total current assets | | | [removed: 27,764] [added: 30,266] | | | | | | [removed: 27,483] [added: 27,764] | | |

| Investments | | | [removed: 785] [added: 370] | | | | | | [removed: 1,469] [added: 785] | | |

| Machinery, equipment and office furnishings | | | [removed: 16,649] [added: 16,303] | | | | | | [removed: 15,394] [added: 15,860] | | |

| Less: accumulated depreciation | | | [removed: 18,982] [added: 18,192] | | | | | | [removed: 17,686] [added: 18,162] | | |

| Other [removed: Intangibles, Net | | | 14,604] [added: intangibles, net] | | | | | | [removed: 14,196] [added: 503] | | |

| Other [removed: Assets | | | 10,211] [added: assets] | | | | | | [removed: 6,771] [added: 330] | | |

| Loans payable and current portion of long-term debt | | | $ | [removed: 6,431] [added: 2,412] | | | | | $ | [removed: 3,610] [added: 6,431] | |

| Trade accounts payable | | | [removed: 4,594] | | | [removed: | | | 3,738] [added: $] | [added: 267] | |

| Accrued and other current liabilities | | | [removed: 13,053] [added: (64)] | | | | | | [removed: 12,549] [added: (82)] | | | [added: | | | (22) | | | | | | (13) | | | | | | (8) | | | | | | (9) | | |]

| Income taxes payable | | | [removed: 1,575] | | | [removed: | | | 736] [added: (22)] | | |

| Dividends payable | | | [removed: 1,674] [added: 1,768] | | | | | | [removed: 1,587] [added: 1,674] | | |

| Total current liabilities | | | [removed: 27,327] [added: 23,872] | | | | | | [removed: 22,220] [added: 27,327] | | |

| Long-Term Debt | | | [removed: 25,360] [added: 30,690] | | | | | | [removed: 22,736] [added: 25,360] | | |

| Deferred [removed: Income Taxes | | | 1,015] [added: income taxes] | | | | | | [removed: 1,470] [added: $] | [added: 10] | |

| Other [removed: Noncurrent Liabilities | | | 12,482] [added: noncurrent liabilities] | | | | | | [removed: 11,970] [added: 176] | | |

| Common stock, $0.50 par value Authorized - 6,500,000,000 shares Issued - 3,577,103,522 shares in [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] | | | 1,788 | | | | | | 1,788 | | |

| Sales | | | $ | 48,704 | | | | | $ | 41,518 | | | | | $ | 39,121 | |

| Cost of sales | | | 13,626 | | | | | | 13,618 | | | | | | 12,016 | | |

| Selling, general and administrative | | | 9,634 | | | | | | 8,955 | | | | | | 9,455 | | |

| Research and development | | | 12,245 | | | | | | 13,397 | | | | | | 9,724 | | |

| Restructuring costs | | | 661 | | | | | | 575 | | | | | | 626 | | |

| Other (income) expense, net | | | (1,341) | | | | | | (890) | | | | | | 129 | | |

| | | | 34,825 | | | | | | 35,655 | | | | | | 31,950 | | |

| Income from Continuing Operations Before Taxes | | | 13,879 | | | | | | 5,863 | | | | | | 7,171 | | |

| Taxes on Income from Continuing Operations | | | 1,521 | | | | | | 1,340 | | | | | | 1,565 | | |

| Net Income from Continuing Operations | | | 12,358 | | | | | | 4,523 | | | | | | 5,606 | | |

| Net Income from Continuing Operations Attributable to Merck & Co., Inc. | | | 12,345 | | | | | | 4,519 | | | | | | 5,690 | | |

| Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests | | | 704 | | | | | | 2,548 | | | | | | 4,153 | | |

| Income from Continuing Operations | | | $ | 4.88 | | | | | $ | 1.79 | | | | | $ | 2.22 | |

| Income from Discontinued Operations | | | 0.28 | | | | | | 1.01 | | | | | | 1.62 | | |

| Net Income | | | $ | 5.16 | | | | | $ | 2.79 | | | | | $ | 3.84 | |

| Income from Continuing Operations | | | $ | 4.86 | | | | | $ | 1.78 | | | | | $ | 2.21 | |

| Income from Discontinued Operations | | | 0.28 | | | | | | 1.00 | | | | | | 1.61 | | |

| Net Income | | | $ | 5.14 | | | | | $ | 2.78 | | | | | $ | 3.81 | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| Cash and cash equivalents | | | $ | 8,096 | | | | | $ | 8,050 | |

| Other current assets | | | 6,987 | | | | | | 4,674 | | |

| Current assets of discontinued operations | | | — | | | | | | 2,683 | | |

| Land | | | 326 | | | | | | 336 | | |

| Buildings | | | 12,529 | | | | | | 11,998 | | |

| Construction in progress | | | 8,313 | | | | | | 6,968 | | |

| | | | 37,471 | | | | | | 35,162 | | |

| | | | 19,279 | | | | | | 17,000 | | |

| Goodwill | | | 21,264 | | | | | | 18,882 | | |

| Other Intangibles, Net | | | 22,933 | | | | | | 14,101 | | |

| Other Assets | | | 11,582 | | | | | | 9,881 | | |

| Noncurrent Assets of Discontinued Operations | | | — | | | | | | 3,175 | | |

| | | | $ | 105,694 | | | | | $ | 91,588 | |

| Trade accounts payable | | | 4,609 | | | | | | 4,327 | | |

| Income taxes payable | | | 1,224 | | | | | | 1,597 | | |

| Current liabilities of discontinued operations | | | — | | | | | | 1,086 | | |

| Noncurrent Liabilities of Discontinued Operations | | | — | | | | | | 186 | | |

| | | | 95,293 | | | | | | 82,104 | | |

| | | | $ | 105,694 | | | | | $ | 91,588 | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| Spin-off of Organon & Co. | | | — | | | | | | 4,643 | | | | | | — | | | | | | 449 | | | | | | — | | | | | | (1) | | | | | | 5,091 | | |

| Sales | | | $ | 47,994 | | | | | $ | 46,840 | | | | | $ | 42,294 | |

| Cost of sales | | | 15,485 | | | | | | 14,112 | | | | | | 13,509 | | |

| | | | 39,203 | | | | | | 35,376 | | | | | | 33,593 | | |

| Income Before Taxes | | | 8,791 | | | | | | 11,464 | | | | | | 8,701 | | |

| Taxes on Income | | | 1,709 | | | | | | 1,687 | | | | | | 2,508 | | |

| Net Income | | | 7,082 | | | | | | 9,777 | | | | | | 6,193 | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| Short-term investments | | | — | | | | | | 774 | | |

| Land | | | 350 | | | | | | 343 | | |

| Buildings | | | 12,645 | | | | | | 11,989 | | |

| Construction in progress | | | 7,324 | | | | | | 5,013 | | |

| | | | 36,968 | | | | | | 32,739 | | |

| | | | 17,986 | | | | | | 15,053 | | |

| Goodwill | | | 20,238 | | | | | | 19,425 | | |

| | | | $ | 91,588 | | | | | $ | 84,397 | |

| | | | 82,104 | | | | | | 81,857 | | |

| | | | $ | 91,588 | | | | | $ | 84,397 | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| Balance January 1, 2018 | | | $1,788 | | | | | | $ | 39,902 | | | | | $ | 41,350 | | | | | $ | (4,910) | | | | | $ | (43,794) | | | | | $ | 233 | | | | | $ | 34,569 | |

| Adoption of new accounting standards | | | — | | | | | | — | | | | | | 322 | | | | | | (274) | | | | | | — | | | | | | — | | | | | | 48 | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| Net income | | | $ | 7,082 | | | | | $ | 9,777 | | | | | $ | 6,193 | |

| Amortization | | | 1,899 | | | | | | 1,973 | | | | | | 3,103 | | |

| Depreciation | | | 1,726 | | | | | | 1,679 | | | | | | 1,416 | | |

| Charge for future payments related to collaboration license options | | | — | | | | | | — | | | | | | 650 | | |

| Deferred income taxes | | | (668) | | | | | | (556) | | | | | | (509) | | |

| Share-based compensation | | | 475 | | | | | | 417 | | | | | | 348 | | |

| Other | | | (49) | | | | | | 184 | | | | | | 978 | | |

| Inventories | | | (855) | | | | | | (508) | | | | | | (911) | | |

| Trade accounts payable | | | 724 | | | | | | 399 | | | | | | 230 | | |

| Income taxes payable | | | 560 | | | | | | (2,359) | | | | | | 827 | | |

| Noncurrent liabilities | | | (453) | | | | | | (237) | | | | | | (266) | | |

| Other | | | (2,426) | | | | | | (32) | | | | | | (674) | | |

| Capital expenditures | | | (4,684) | | | | | | (3,473) | | | | | | (2,615) | | |

| Other | | | 130 | | | | | | 378 | | | | | | 102 | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

The Company previously had an Alliances segment that primarily included activity from the Company’s relationship with AstraZeneca LP related to sales of Nexium and Prilosec, which concluded in 2018.

*Planned Spin-Off of Women’s Health, Biosimilars and Established Brands into a New Company*

Organon will have development capabilities initially focused on late-stage development and life-cycle management and is expected over time to develop research capabilities in selected therapeutic areas.

The spin-off is expected to be completed late in the second quarter of 2021, subject to market and certain other conditions.

For the fourth quarter of [removed: 2020,] [added: 2021,] there have been no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Based on this evaluation, management concluded that internal control over financial reporting was effective as of December 31, [removed: 2020.][added: 2021.]

Based on this evaluation, management concluded that internal control over financial reporting was effective as of December 31, [removed: 2020.][added: 2021.]

The effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

| [removed: ] [added: ] | | | | | |

| [removed: ] [added: ] | | | | | |

| [removed: *Chairman, President and Chief] [added: *Chief] Executive [removed: Officer*] [added: Officer and President*] | | | *Executive Vice [removed: President, Global Services,] [added: President] and Chief Financial Officer* | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| Robert M. Davis | | | Caroline Litchfield | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| Kenneth C. Frazier | | | Robert M. Davis | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

PART III

Not Applicable.

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

PART III

Election of Directors of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 25, 2021.][added: 24, 2022.]

Information on executive officers is set forth in Part I of this document on page [removed: 44.][added: [44](#i1e1e934bfffd457891fb6e33dae50d64_70).]

The required information on compliance with Section 16(a) of the Securities Exchange Act of 1934, if applicable, is incorporated by reference from the discussion under the heading “Stock Ownership Information” of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 25, 2021.][added: 24, 2022.]

The Code of Conduct is available on the Company’s website at [removed: www.merck.com/company-overview/culture-and-values/code-of-conduct/values-and-standards.][added: merck.com/company-overview/culture-and-values/code-of-conduct/values-and-standards.]

The required information on the identification of the audit committee and the audit committee financial expert is incorporated by reference from the discussion under the heading “Board Meetings and Committees” of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 25, 2021.][added: 24, 2022.]

The information required on executive compensation is incorporated by reference from the discussion under the headings “Compensation Discussion and Analysis,” “Summary Compensation Table,” “All Other Compensation” table, “Grants of Plan-Based Awards” table, “Outstanding Equity Awards” table, “Option Exercises and Stock Vested” table, “Pension Benefits” table, “Nonqualified Deferred Compensation” table, [added: and] “Potential Payments Upon Termination or a Change in Control”, including the discussion under the subheadings “Separation” and “Change in Control,” as well as all footnote information to the various tables, of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 25, 2021.][added: 24, 2022.]

The required information on director compensation is incorporated by reference from the discussion under the heading “Director Compensation” and related [removed: “2020] [added: “2021] Schedule of Director Fees” table and [removed: “2020] [added: “2021] Director Compensation” table of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 25, 2021.][added: 24, 2022.]

The required information under the headings “Compensation and [removed: Benefits] [added: Management Development] Committee Interlocks and Insider Participation” and “Compensation and [removed: Benefits] [added: Management Development] Committee Report” is incorporated by reference from the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 25, 2021.][added: 24, 2022.]

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

Information with respect to security ownership of certain beneficial owners and management is incorporated by reference from the discussion under the heading “Stock Ownership Information” of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 25, 2021.][added: 24, 2022.]

The following table summarizes information about the options, warrants and rights and other equity compensation under the Company’s equity compensation plans as of the close of business on December 31, [removed: 2020.][added: 2021.]

*(2)Excludes approximately [removed: 11,914,491] [added: 11,790,206] shares of restricted stock units and [removed: 2,099,739] [added: 1,965,983] performance share units (assuming maximum payouts) under the Merck Sharp & Dohme 2010 and 2019 Incentive Stock Plans.

Also excludes [removed: 193,746] [added: 193,107] shares of phantom stock deferred under the MSD Employee Deferral Program and [removed: 564,209] [added: 468,633] shares of phantom stock deferred under the Merck & Co., Inc. Plan for Deferred Payment of Directors’ Compensation.*

| Equity compensation plans approved by security holders*(1)* | | | | | | 18,572,010*(2)* | | | | | | $ | 65.27 | | | | | 92,994,903 | | |

| Total | | | | | | 18,572,010 | | | | | | $ | 65.27 | | | | | 92,994,903 | | |

| Equity compensation plans approved by security holders*(1)* | | | | | | 19,446,307*(2)* | | | | | | $ | 63.64 | | | | | 100,353,680 | | |

| Total | | | | | | 19,446,307 | | | | | | $ | 63.64 | | | | | 100,353,680 | | |

The required information on transactions with related persons is incorporated by reference from the discussion under the heading “Related Person Transactions” of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 25, 2021.][added: 24, 2022.]

The required information on director independence is incorporated by reference from the discussion under the heading “Independence of Directors” of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 25, 2021.][added: 24, 2022.]

Ratification of Appointment of Independent Registered Public Accounting Firm for [removed: 2021] [added: 2022] beginning with the caption “Pre-Approval Policy for Services of Independent Registered Public Accounting Firm” through “Fees for Services Provided by the Independent Registered Public Accounting Firm” of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 25, 2021.][added: 24, 2022.]

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

Consolidated statement of income for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

Consolidated statement of comprehensive income for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

Consolidated balance sheet as of December 31, [removed: 2020] [added: 2021] and [removed: 2019][added: 2020]

Consolidated statement of equity for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

Consolidated statement of cash flows for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

Report of PricewaterhouseCoopers LLP, independent registered public accounting firm [added: (PCAOB ID 238)]

| 4.11 | | | | | | — | | | | | | [Description of the Registrant’s 1.125% Notes due 2021, 1.875% Notes due 2026, and 2.500% Notes due [removed: 2034](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit411-merckdescriptio.htm)] [added: 2034 - Incorporated by reference to Exhibit 4.11 to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2020 filed February 25, 2021 (No. 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit411-merckdescriptio.htm)] | | |

| 4.12 | | | | | | — | | | | | | [Description of the Registrant’s 0.500% Notes due 2024 and 1.375% Notes due [removed: 2036](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit412-merckdescriptio.htm)] [added: 2036 - Incorporated by reference to Exhibit 4.12 to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2020 filed February 25, 2021 (No. 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit412-merckdescriptio.htm)] | | |

| *10.2 | | | | | | — | | | | | | [Merck & Co., Inc. Deferral Program Including the Base Salary Deferral Plan (Amended and Restated effective December 1, [removed: 2019)](http://www.sec.gov/Archives/edgar/data/310158/000031015820000005/ex102deferralprograme.htm) [-] [added: 2019) -] Incorporated by reference to Exhibit 10.2 to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2019 filed February 26, 2020 (No. 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015820000005/ex102deferralprograme.htm) | | |

| [removed: *10.16] [added: *10.22] | | | | | | — | | | | | | [removed: [Merck] [added: [Form of stock option terms for 2021 annual non-qualified option grants under the Merck] & Co., Inc. [removed: 2010 Non-Employee Directors] [added: 2019 Incentive] Stock [removed: Option Plan (amended and restated as of December 1, 2010) — Incorporated] [added: Plan](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [-](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [Incorporated] by reference to [removed: Exhibit 10.17 to] [added: Exhibit](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [10](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[.](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[23](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [to] Merck & Co., Inc.’s Form [removed: 10‑K] [added: 10-K] Annual Report for the fiscal year ended December 31, [removed: 2010] [added: 2020] filed February [removed: 28, 2011] [added: 25, 2021] (No. [removed: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000095012311019286/y87773exv10w17.htm)] [added: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)] | | |

| [removed: *10.17] [added: *10.16] | | | | | | — | | | | | | [Retirement Plan for the Directors of Merck & Co., Inc. (amended and restated June 21, 1996) —Incorporated by reference to Exhibit 10.C to MSD’s Form 10-Q Quarterly Report for the period ended June 30, 1996 filed August 13, 1996 (No. 1-3305)](http://www.sec.gov/Archives/edgar/data/64978/0000950123-96-004374.txt) | | |

| [removed: *10.18] [added: *10.23] | | | | | | — | | | | | | [removed: [Merck] [added: [Form of restricted stock unit terms for 2021 annual grants under the Merck] & Co., Inc. [removed: Plan for Deferred Payment of Directors’ Compensation (Amended and Restated effective as of January 1, 2020)](http://www.sec.gov/Archives/edgar/data/310158/000031015820000005/ex1018planforderredpay.htm) [- Incorporated] [added: 2019 Incentive Stock Plan](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm) [-](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm) [Incorporated] by reference to [removed: Exhibit 10.18 to] [added: Exhibit](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm) [10](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm)[.](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm)[24](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm) [to] Merck & Co., [removed: Inc.](http://www.sec.gov/Archives/edgar/data/310158/000031015820000005/ex1018planforderredpay.htm)[’](http://www.sec.gov/Archives/edgar/data/310158/000031015820000005/ex1018planforderredpay.htm)[s] [added: Inc.’s] Form 10-K Annual Report for the fiscal year ended December 31, [removed: 2019] [added: 2020] filed February [removed: 26, 2020] [added: 25, 2021] (No. [removed: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015820000005/ex1018planforderredpay.htm)] [added: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm)] | | |

| [removed: 10.19] [added: 10.18] | | | | | | — | | | | | | [Distribution agreement between Schering-Plough and Centocor, Inc., dated April 3, 1998 — Incorporated by reference to Exhibit 10(u) to Schering-Plough’s Amended 10-K for the year ended December 31, 2003 filed May 3, 2004 (No. 1-6571)†](http://www.sec.gov/Archives/edgar/data/310158/000095012304005617/y96428exv10wu.txt) | | |

| [removed: 10.20] [added: 10.19] | | | | | | — | | | | | | [Amendment Agreement to the Distribution Agreement between Centocor, Inc., CAN Development, LLC, and Schering-Plough (Ireland) Company — Incorporated by reference to Exhibit 10.1 to Schering-Plough’s Current Report on Form 8-K filed December 21, 2007 (No. 1-6571)†](http://www.sec.gov/Archives/edgar/data/310158/000095012307016977/y45185exv10w1.htm) | | |

| [removed: 10.21] [added: 10.20] | | | | | | — | | | | | | [Severance Agreement and General Release between Merck & Co., Inc. and Adam H. Schechter, dated December 1, 2018 - Incorporated by reference to Exhibit 10.27 to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2018 filed February 27, 2019 (No. 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015819000014/a2018form10-k_exhibit1027x.htm) | | |

| [removed: 10.22] [added: 10.21] | | | | | | — | | | | | | [Offer Letter between Merck & Co., Inc. and Jennifer Zachary, dated March 16, 2018 - Incorporated by reference to Exhibit 10.28 to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2018 filed February 27, 2019 (No. 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015819000014/a2018form10-k_ex1028xoffer.htm) | | |

| *10.24 | | | | | | — | | | | | | [Form [removed: of](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm) [r](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm)[estricted](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm) [s](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm)[tock](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm) [u](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm)[nit](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm) [t](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm)[erms] [added: of stock option terms] for [removed: 2021] [added: 2022] annual [added: non-qualified option] grants under the Merck & Co., Inc. 2019 Incentive Stock [removed: Plan.](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm)] [added: Plan](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1024-2022annualnqso.htm)] | | |

| 21 | | | | | | — | | | | | | [Subsidiaries of Merck & Co., [removed: Inc.](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex21-subsidiarylistasof12x.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit21-subsidiarylistas.htm)] | | |

| 23 | | | | | | — | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex23-consentofindependentr.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/ex23-consentofindependentr.htm)] | | |

| 24.1 | | | | | | — | | | | | | [Power of [removed: Attorney](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex241-powerofattorney.htm)] [added: Attorney](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/ex241-powerofattorney1.htm)] | | |

| 24.2 | | | | | | — | | | | | | [Certified Resolution of Board of [removed: Directors](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex242-certificationofboard.htm)] [added: Directors](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/ex242-certificationofboard.htm)] | | |

| 31.1 | | | | | | — | | | | | | [Rule 13a-14(a)/15d-14(a) Certification of Chief Executive [removed: Officer](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex311-rule13ax14a15dx14ace.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/ex311-rule13ax14a15dx14ace.htm)] | | |

| 31.2 | | | | | | — | | | | | | [Rule 13a-14(a)/15d-14(a) Certification of Chief Financial [removed: Officer](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex312-rule13ax14a15dx14ace.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/ex312-rule13ax14a15dx14ace.htm)] | | |

| 32.1 | | | | | | — | | | | | | [Section 1350 Certification of Chief Executive [removed: Officer](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex321-section1350certifica.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/ex321-section1350certifica.htm)] | | |

| 32.2 | | | | | | — | | | | | | [Section 1350 Certification of Chief Financial [removed: Officer](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex322-section1350certifica.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/ex322-section1350certifica.htm)] | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| 4.10 | | | | | | — | | | | | | [Description of the Registrant’s Common Stock - Incorporated by reference to Exhibit 4.10 to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, 2020 filed February 25, 2021 (No. 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit410-merckdescriptio.htm) | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

| *10.17 | | | | | | — | | | | | | [Merck & Co., Inc. Plan for Deferred Payment of Directors’ Compensation (Amended and Restated effective as of January 1,](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1017-planfordeferre.htm) [2022)](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1017-planfordeferre.htm) | | |

| *10.25 | | | | | | — | | | | | | [Form of restricted stock unit terms for 2022 annual grants under the Merck & Co., Inc. 2019 Incentive Stock Plan](https://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1025-2022annualrsut.htm) | | |

[Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| 4.10 | | | | | | — | | | | | | [Description](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit410-merckdescriptio.htm) [of the](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit410-merckdescriptio.htm) [Registrant’s](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit410-merckdescriptio.htm) [](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit410-merckdescriptio.htm)[Common](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit410-merckdescriptio.htm) [](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit410-merckdescriptio.htm)[Stock](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/exhibit410-merckdescriptio.htm) | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

| *10.23 | | | | | | — | | | | | | [Form of](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [s](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[tock](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [o](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[ption](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [t](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[erms for 2021](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [a](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[nnual](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [n](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[on-](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[q](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[ualified](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [o](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[ption](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [g](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[rants](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [u](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)[nder the Merck & Co., Inc. 2019 Incentive Stock Plan.](https://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) | | |

[Table of Content](#iab6577be4c3840fd8181bdedf457fba5_7)[s](#iab6577be4c3840fd8181bdedf457fba5_7)

Dated: February 25, [removed: 2021][added: 2022]

| | | | [removed: (Chairman, President and Chief] [added: (Chief] Executive [removed: Officer)] [added: Officer and President)] | | | | | |

| KENNETH C. FRAZIER | | | | | | [removed: Chairman, President and Chief] Executive [removed: Officer; Principal Executive Officer;] [added: Chairman and] Director | | | | | | February 25, [removed: 2021] [added: 2022] | | |