Merck & Co. (MRK) 10-K risk factor changes: FY2022 vs FY2021

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

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

[added: 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 2017, the] [added: The] Company [removed: experienced] [added: could be] a [removed: network cyber-attack] [added: target of future cyber-attacks] that [removed: led] [added: could lead] to a disruption of its worldwide operations, including manufacturing, research and sales operations.

In particular, manufacturers of generic [added: or biosimilar] pharmaceutical products from time to time file abbreviated NDAs [added: or BLAs] with the FDA seeking to market [removed: generic] [added: generic/biosimilar] forms of the Company’s products prior to the expiration of relevant patents owned or licensed by the Company.

The Company normally responds by asserting [added: one or more of] its [removed: patent] [added: patents] with a lawsuit alleging patent infringement.

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

[removed: *Januvia* and *Janumet* will lose] [added: The Company lost] market exclusivity [added: for *Januvia*] in [added: all of] the EU [removed: in September 2022] and [added: for *Janumet*] in [removed: China] [added: some European countries] in [removed: July] [added: September] 2022.

[removed: The] [added: As these products lose exclusivity, the] Company anticipates [added: that] sales of *Januvia* and *Janumet* [removed: in these markets] will decline [removed: substantially after the loss of exclusivity.][added: substantially.]

Key products generate a significant amount of the Company’s profits and cash flows, and any events that adversely affect the markets for its leading products could have a material adverse effect on the Company’s results of operations and financial [removed: condition.][added: condition.]

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 [removed: *Keytruda, Gardasil/Gardasil*] [added: *Keytruda*, *Gardasil/Gardasil*] 9, Lynparza, *Bravecto*, and *Bridion*.

Some of the risks encountered in the research and development process include the following: [removed: pre-clinical] [added: preclinical] testing of a new compound may yield disappointing results; competing products from other manufacturers may reach the market first; clinical trials of a new drug may not be successful; a new drug may not be effective or may have harmful side effects; a new drug may not be approved by the regulators for its intended use; it may not be possible to obtain a patent for a new drug; payers may refuse to cover or reimburse the new product; or sales of a new product may be disappointing.

[removed: The Company must maintain a continuous flow of successful new products and successful new indications for existing products] sufficient both to cover its substantial research and development costs and to replace sales that are lost as profitable products lose market exclusivity or are displaced by competing products or therapies.

[added: 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.

- findings of ineffectiveness, superior safety or efficacy of competing products, or harmful side effects in clinical or [removed: pre-clinical] [added: preclinical] testing;

In the 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 [removed: 2003 and] [added: 2003,] the ACA, [added: the Inflation Reduction Act,] and (iii) state activities aimed at increasing price transparency, including new laws as noted above in Item 1.

In [removed: 2021,] [added: 2022,] the Company’s gross U.S. sales were reduced by [removed: 43.5%] [added: 39.7%] as a result of rebates, discounts and returns.

In addition, the Company’s [removed: revenue] [added: sales] performance in [removed: 2021] [added: 2022] was negatively affected by other cost-reduction measures taken by governments and other third parties to lower health care costs.

The Company anticipates all of these actions, and additional actions in the future, will [removed: continue to] negatively affect [removed: revenue performance.][added: sales and profits.]

Any such proposal that is enacted into law could worsen this substantial negative effect on the Company’s [removed: sales and, potentially, its] [added: sales,] business, cash flow, results of operations, financial condition and prospects.

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

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

The continued duration and severity of the COVID-19 pandemic is [removed: uncertain, rapidly changing] [added: uncertain] and difficult to predict.

The degree to which COVID-19-related disruptions impact the Company’s results in [removed: 2022] [added: 2023] will depend on future developments, beyond the Company’s knowledge or control, [removed: including, but not limited to, the duration of the pandemic, its severity, the success of] [added: including governmental and third-party] actions taken to contain or prevent the [added: spread and treatment of the] virus [removed: or treat its impact,] and [removed: how quickly] [added: mitigate its public health] and [removed: to what extent normal] economic [removed: and operating conditions can resume.][added: effects.]

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

[removed: 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, [removed: upgrade] [added: investments in data gathering and reporting systems, upgrades] 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 [removed: Company.][added: Company, all of which may affect the Company’s ability to procure raw materials or other supplies required for the operation of the Company’s business at the quantities and levels we require.]

While the Company strives to improve its ESG [removed: performance,] [added: performance and has set certain ESG goals and initiatives,] the Company risks negative stockholder reaction, including from proxy advisory services, as well as damage to its brand and reputation, if the Company [added: fails to meet its goals and initiatives or otherwise] does not act responsibly, or if the Company is perceived to not be acting [removed: responsibly] [added: 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 [added: evolving and varied] 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.

[removed: Continued] [added: Also, continued] growth of the Company’s business in China is dependent upon ongoing development of a favorable environment for innovative pharmaceutical products and vaccines, sustained access for the Company’s currently marketed products, and the absence of trade impediments or adverse pricing controls.

However, at the same [removed: time macro-economic] [added: time, macro economic] growth of selected emerging markets is expected to outpace Europe and even the U.S., leading to significant increased health care spending in those countries and access to innovative medicines for patients.

[removed: Certain of the Company’s interest rate derivatives and investments are based on the London Interbank Offered Rate (LIBOR), and a] [added: A] portion of Merck’s indebtedness bears interest at variable interest rates, primarily based on [removed: LIBOR.][added: the London Interbank Offered Rate (LIBOR).]

LIBOR is the subject of [removed: recent] national, international and other regulatory guidance and proposals for reform, which will cause LIBOR to cease to exist entirely in the future.

While the Company has begun to implement alternative reference rates as alternatives to LIBOR, the Company cannot predict the consequences and timing of any additional or unexpected developments, which could include an increase in interest [removed: expense and will also require the amendment of contracts that reference LIBOR.][added: expense.]

In addition, [added: in 2022,] sales of *Bravecto* [removed: represent a significant portion] [added: were $1.0 billion, which represented approximately 19%] of the Company’s Animal Health segment sales.

[removed: As] [added: If] the Animal Health segment of the Company’s business becomes more significant, the impact of any such events on future results of operations [removed: would] [added: could] also become more significant.

For example, in the U.S., a BLA, including both [removed: pre-clinical] [added: preclinical] and clinical trial data and extensive data regarding the manufacturing procedures, is required for human vaccine candidates, and FDA approval is generally required for the release of each manufactured commercial human vaccine lot.

When changes are made to the manufacturing process, the Company may be required to provide [removed: pre-clinical] [added: preclinical] and clinical data showing the comparable identity, strength, quality, purity or potency of the products before and after such changes.

In [added: addition, in] 2021, Congress passed the American Rescue Plan [removed: Act of 2021,] [added: Act,] which included a provision that eliminates the statutory cap on rebates drug manufacturers pay to Medicaid beginning in January 2024.

The Company expects that sales of *Lagevrio*, which were $5.7 billion in 2022, will decline significantly to approximately $1.0 billion in 2023.

- The ongoing war between Russia and Ukraine and related global disruptions could adversely affect the Company’s business, results of operations and financial condition.

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

While the key U.S.

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

patent for *Januvia* and *Janumet* claiming the sitagliptin compound expired in January 2023, as a result of favorable court rulings and settlement agreements related to a later expiring patent directed to the specific sitagliptin salt form of the products, the Company expects that these products will not lose market exclusivity in the U.S. until May 2026.

However, certain of the rulings are currently being appealed, and an unfavorable court decision would likely cause the products to lose exclusivity in the U.S. toward the end of 2023.

Merck expects that exclusivity for *Janumet* will be lost in other European countries in April 2023.

While the Company lost market exclusivity for *Januvia* in China in 2022 with the approval of a generic equivalent product, the impact on sales in 2023 is expected to be modest.

It is anticipated that a generic equivalent of *Janumet* will be approved in China in the first quarter of 2023, but the impact to sales in 2023 is also expected to be modest.

The Company expects that sales of Lagevrio, which were $5.7 billion in 2022, will decline significantly to approximately $1.0 billion in 2023.

In particular, in 2022, sales of *Lagevrio*, which were $5.7 billion, represented a substantial portion of the Company’s revenue and profit growth.

The Company expects that sales of *Lagevrio* will decline significantly to approximately $1.0 billion in 2023.

The Company must maintain a continuous flow of successful new products and successful new indications for existing products

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

As a result of global macroeconomic conditions, the Company is experiencing some minor disruption and volatility in its global supply chain network.

These disruptions could increase in the future and cause delays in shipments of raw materials and packaging, as well as related cost inflation.

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

Events like these could result in material adverse effects on macroeconomic conditions, currency exchange rates and financial markets.

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,

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

Responding to these ESG considerations and implementation of the Company’s ESG goals and initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside of the Company’s control.

In addition, some stakeholders may disagree with the Company’s ESG goals and initiatives.

As previously disclosed, the Company is working to reduce the level of nitrosamines in its sitagliptin-containing medicines such as *Januvia*.

Difficulties in reducing those levels, or achieving timely regulatory approvals for required changes, could result in product shortages.

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

In addition to its commercial operations, the Company has significant research and manufacturing operations in China.

If geopolitical tensions were to increase and disrupt the Company’s operations in China, such disruption could result in a material adverse effect on the Company’s product development, sales, business, cash flow, results of operations, financial condition and prospects.

A new NRDL was recently completed in which new entries averaged 60% price reductions.

The ongoing war between Russia and Ukraine and related global disruptions could adversely affect the Company’s business, results of operations and financial condition.

The ongoing war between Russia and Ukraine, and the financial and economic sanctions imposed by the U.S., the EU and other countries in response, are having pervasive direct and indirect effects on the global economy, and may adversely affect the Company’s business, results of operations and financial condition.

The Company is working cross-functionally across the globe to monitor and mitigate interruptions to business continuity resulting from the war, including its impact on Merck’s supply chain, operations and clinical trials.

For humanitarian reasons, the Company is continuing to supply essential medicines and vaccines in Russia while working to maintain compliance with international sanctions.

Merck is donating profits resulting from its operations in Russia to humanitarian causes.

The Company does not have research or manufacturing facilities in Russia, currently does not plan to make further investments in Russia, and has suspended screening and enrollment in ongoing clinical trials as well as planning for new studies in Russia, although the Company continues to treat patients already enrolled in existing clinical trials and collect data from these studies.

The financial impacts of the war between Russia and Ukraine were immaterial to the Company’s consolidated financial statements in 2022.

However, the degree to which the war and related disruptions will impact the Company’s results in the future is difficult to predict and will depend on developments outside of the Company’s control, including, but not limited to, the duration and severity of the war, ongoing and additional financial and economic sanctions imposed by governments in response, restrictions on travel, regional instability, geopolitical

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

shifts, and adverse effects on fuel and energy costs, supply chains, macroeconomic conditions, currency exchange rates and financial markets.

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

The Company could be a target of future cyber-attacks.

rapid loss of sales for that product as lower priced generic versions of that drug become available.

*Januvia* and *Janumet* will lose market exclusivity in the U.S. in January 2023.

In particular, in 2021, the Company’s oncology portfolio, led by *Keytruda,* represented a substantial portion of the Company’s revenue growth.

Failure to do so in the short

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.

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

In 2021, the COVID-19 pandemic impacted the Company’s business in numerous ways.

As expected, within the Company’s human health business, which is comprised largely of physician-administered products, revenue was negatively impacted by social distancing measures and fewer well visits, which negatively affected vaccine and oncology sales in particular.

The estimated negative impact of COVID-19-related disruptions to Merck’s revenue for the full year 2021 was approximately $1.3 billion, attributable to the Pharmaceutical segment.

Despite the Company’s efforts to manage the impacts of the COVID-19 pandemic, their ultimate effect will also depend on factors beyond the Company’s knowledge or control, including the duration of the COVID-19 pandemic as well as governmental and third-party actions taken to contain or prevent the spread and treatment of the virus and mitigate its public health and economic effects.

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.

In addition, the Company anticipates that the reported inquiries made by various governmental authorities involving multinational pharmaceutical companies in China may continue.

In 2016, the Centers for Medicare & Medicaid Services (CMS) issued the Medicaid rebate final rule that implemented provisions of the ACA effective April 1, 2016.

The rule provides comprehensive guidance on the calculation of Average Manufacturer Price and Best Price; two metrics utilized to determine the rebates drug manufacturers are required to pay to state Medicaid programs.

On December 21, 2020, the CMS issued a final rule making significant changes to these requirements.

Effective January 1, 2023, this final rule also changes the way that manufacturers must calculate Best Price, in relation to certain patient support programs, including coupons.

PhRMA, a pharmaceutical industry trade group, of which the Company is a member, filed a complaint challenging this rule as invalid asserting that it conflicts with the plain language of the Medicaid drug rebate statute.

Should this legal

challenge fail, the impact of this and other provisions in this final rule could adversely impact the Company’s business, cash flow, results of operations, financial condition and prospects.

marketed products.

incorrect or not otherwise satisfied, the Spin-Off may not qualify for tax-free treatment, which could result in significant U.S. federal income tax liabilities for the Company and its shareholders.

In 2021, Merck informed the U.S. Department of Health and Human Services, Health Resources and Services Administration (HHS) that Merck was implementing an update to its Section 340b program integrity initiative, pursuant to which Merck required all hospital covered entities to provide 340b claims data for all claims originating from contract pharmacies.

For those entities that declined to submit such claims data, Merck’s new initiative provided that it would no longer voluntarily honor 340b discounts or chargebacks for contract pharmacy transactions, except for a single contract pharmacy of the hospital covered entity’s choice.

Also in 2021, HHS sent letters to numerous drug manufacturers stating that it had determined that those manufacturers’ actions restricting contract pharmacy transactions were in violation of the 340b statute and further stating that if those manufacturers did not cease their restrictions, HHS might seek both repayment of overcharges as well as civil monetary penalties.

Those manufacturers are now in litigation with the U.S. government seeking to confirm the legality of the restrictions.

Merck did not receive a similar letter from HHS.

However, HHS could seek to implement administrative proceedings to recover overcharges and/or impose civil monetary penalties against Merck.

If such proceedings were implemented against Merck a negative outcome could have a material adverse effect on Merck’s business, results of operations, cash flow, prospects and financial condition.

The Company could be a target of future cyber-attacks.

critical operations.

The Company has implemented a variety of measures to further enhance and modernize its systems to guard against similar attacks in the future, and also is pursuing an enterprise-wide effort to enhance the Company's resiliency against future cyber-attacks, including incidents similar to the 2017 attack.

The objective of these efforts is not only to protect against future cyber-attacks, but also to improve the speed of the Company’s recovery from such attacks and enable continued business operations to the greatest extent possible during any recovery period.

statements related to the expected impact of the COVID-19 pandemic.

Merck & Co., Inc. (Merck or the Company) is a global health care company that delivers innovative health solutions through its prescription medicines, [removed: vaccines,] [added: including] biologic [removed: therapies] [added: therapies, vaccines] and animal health products.

The Company’s operations are principally managed on a [removed: products] [added: product] basis and include two operating segments, [removed: which are the] Pharmaceutical and Animal [removed: Health segments,] [added: Health,] both of which are reportable segments.

The Company sells its products to veterinarians, [removed: distributors and] [added: distributors,] animal [removed: producers.][added: producers, farmers and pet owners.]

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

| *($ in millions)* | | | [removed: 2021] [added: 2022] | | | | | | % Change | | | | | | % Change Excluding Foreign Exchange | | | | | | [removed: 2020] [added: 2021] | | | | | | % Change | | | | | | % Change Excluding Foreign Exchange | | | | | | [removed: 2019] [added: 2020] | | |

| Sales | | | $ | [removed: 48,704] [added: 59,283] | | | | | [removed: 17] [added: 22] | | % | | | | [removed: 16] [added: 26] | | % | | | | $ | [removed: 41,518] [added: 48,704] | | | | | [removed: 6] [added: 17] | | % | | | | [removed: 8] [added: 16] | | % | | | | $ | [removed: 39,121] [added: 41,518] | |

| GAAP | | | $ | [removed: 12,345] [added: 14,519] | | | | | [removed: *] [added: 18] | | [added: %] | | | | [removed: *] [added: 21] | | [added: %] | | | | $ | [removed: 4,519] [added: 12,345] | | | | | [removed: (21)] [added: *] | | [removed: %] | | | | [removed: (16)] [added: *] | | [removed: %] | | | | $ | [removed: 5,690] [added: 4,519] | |

| GAAP | | | $ | [removed: 4.86] [added: 5.71] | | | | | [removed: *] [added: 17] | | [added: %] | | | | [removed: *] [added: 21] | | [added: %] | | | | $ | [removed: 1.78] [added: 4.86] | | | | | [removed: (19)] [added: *] | | [removed: %] | | | | [removed: (15)] [added: *] | | [removed: %] | | | | $ | [removed: 2.21] [added: 1.78] | |

*(1)* *Non-GAAP net income and non-GAAP earnings per share (EPS) exclude acquisition and divestiture-related costs, restructuring [removed: costs] [added: costs, gains] and [added: losses from investments in equity securities, and] certain other [removed: items.][added: items from Merck’s results prepared in accordance with generally accepted accounting principles in the U.S. (GAAP).]

For further discussion and a reconciliation of GAAP to non-GAAP net income and [removed: EPS (see] [added: EPS, see] “Non-GAAP Income and Non-GAAP [removed: EPS” below)*.][added: EPS from Continuing Operations” below*.]

Worldwide sales were [removed: $48.7] [added: $59.3] billion in [removed: 2021,] [added: 2022,] an increase of [removed: 17%] [added: 22%] compared with [removed: 2020,] [added: 2021,] or [removed: 16%] [added: 26%] excluding the [removed: favorable] [added: unfavorable] effect of foreign exchange.

The sales increase was [removed: driven] primarily [removed: by] [added: due to] growth in [added: virology (driven by the benefit of *Lagevrio* sales),] oncology, [removed: vaccines,] [added: vaccines and] hospital acute [removed: care and animal health.][added: care.]

As discussed below, COVID-19-related disruptions negatively affected sales in [removed: 2021,] [added: 2022,] but to a lesser extent than in [removed: 2020,] [added: 2021,] which benefited year-over-year sales growth.

Merck continues to execute [removed: scientifically compelling] [added: strategic] business development opportunities to augment its [removed: pipeline.][added: robust internal pipeline with compelling external science.]

During [removed: 2021,] [added: 2022,] the Company received numerous regulatory approvals within oncology.

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

*Keytruda* was also approved in combination with Lenvima [removed: both] [added: in Japan] for the treatment of certain adult patients with [removed: endometrial cancer and for the treatment of] [added: radically unresectable or metastatic] renal cell [removed: cancer.][added: carcinoma (RCC).]

Lynparza, which is being developed in collaboration with AstraZeneca PLC (AstraZeneca), received approval in [removed: China as monotherapy] [added: the U.S., the European Union (EU) and Japan] for the [added: adjuvant] treatment of certain adult patients with [removed: metastatic castration resistant prostate cancer.][added: high-risk early breast cancer and in the EU for the treatment of certain patients with mCRPC.]

[removed: Additionally, Verquvo, a medicine] [added: Verquvo is approved] to reduce the risk of cardiovascular death and heart failure hospitalization following a hospitalization for heart failure or need for outpatient intravenous diuretics in adults [removed: was approved in the U.S., the EU] [added: with symptomatic chronic heart failure] and [removed: Japan.][added: reduced ejection fraction.]

[removed: In January] [added: Additionally in] 2022, [removed: the Japan Ministry of Health, Labor and Welfare (MHLW) approved] *Lyfnua* (gefapixant) [added: was approved in Japan] for adults with refractory or unexplained chronic cough.

Lynparza is under review for supplemental indications [added: in the U.S. and Japan] for the treatment of certain patients with [removed: breast and prostate cancers.][added: mCRPC.]

Lenvima is [removed: under review] [added: approved for the treatment of certain types of thyroid cancer, RCC, HCC,] in combination with [removed: *Keytruda*] [added: everolimus] for [removed: a supplemental indication] [added: certain patients with advanced RCC, and in combination with *Keytruda*] for [removed: the treatment of] certain patients with [removed: hepatocellular] [added: advanced endometrial] carcinoma [removed: (HCC).][added: or advanced RCC.]

[removed: 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 [removed: 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.][added: EU.]

[removed: V114 is also] [added: *Vaxneuvance* remains] under review in Japan for use in [removed: adults.][added: pediatric patients.]

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

- MK-3475, [removed: pembrolizumab] subcutaneous [added: pembrolizumab] for non-small-cell lung cancer (NSCLC);

- MK-7119, Tukysa (tucatinib), which is being developed in collaboration with Seagen Inc. (Seagen), for breast [removed: cancer;][added: and colorectal cancers; and]

- MK-4280A, the coformulation of favezelimab, Merck’s novel investigational anti-LAG3 therapy, and pembrolizumab for colorectal [removed: cancer;] [added: cancer] and [added: hematological malignancies;]

- MK-7684A, the coformulation of vibostolimab, an anti-TIGIT therapy, and pembrolizumab for [removed: NSCLC.][added: melanoma, non-small-cell and small-cell lung cancers.]

Additionally, the Company [added: currently] has candidates in Phase 3 clinical development in several other therapeutic areas including:

- MK-7962, sotatercept, for the treatment of pulmonary arterial hypertension [removed: (PAH), which was obtained in the Acceleron acquisition;][added: (PAH);]

- MK-8591A, islatravir in combination with doravirine for the treatment of HIV-1 infection (which is on [added: partial] clinical [removed: hold);] [added: hold for higher doses than those used in current clinical trials);] and

- MK-4482, [removed: molnupiravir,] [added: *Lagevrio*,] which is reflected in Phase 3 development in the U.S. as it remains investigational following [removed: EUA.][added: Emergency Use Authorization in 2021.]

In November [removed: 2021,] [added: 2022,] Merck’s Board of Directors approved an increase to the Company’s quarterly dividend, raising it to [removed: $0.69] [added: $0.73] per share from [removed: $0.65] [added: $0.69] per share on the Company’s outstanding common stock.

During [removed: 2021,] [added: 2022,] the Company returned [removed: $7.5] [added: $7.0] billion to shareholders through [removed: dividends and share repurchases.][added: dividends.]

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

In 2021, [removed: Merck’s sales were unfavorably affected by] COVID-19-related [removed: disruptions, which] [added: disruptions] resulted in an estimated negative impact to [removed: Merck’s] Pharmaceutical segment sales of approximately $1.3 [removed: billion.][added: billion because a substantial portion of Pharmaceutical segment revenue is comprised of physician-administered products, which were unfavorably affected by social distancing measures and fewer well visits.]

In April 2021, Merck announced it was discontinuing the development of MK-7110 [removed: (formerly known as CD24Fc)] for the treatment of hospitalized patients with COVID-19, which was obtained as part of Merck’s acquisition of OncoImmune (see Note 4 to the consolidated financial statements).

Operating expenses [added: in 2021] reflect a minor positive effect [removed: in 2021] as investments in COVID-19-related research largely offset the favorable impact of lower spending in other areas due to the COVID-19 pandemic.

See Note [removed: 5] [added: 4] to the consolidated financial statements for additional information related to [removed: the collaboration with Ridgeback.][added: these business development transactions.]

The following section of this Form 10-K generally discusses 2022 and 2021 results and year-to-year comparisons between 2022 and 2021.

Discussion of 2020 results and year-to-year comparisons between 2021 and 2020 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, 2021 filed on February 25, 2022.

| *($ in millions except per share amounts)* | | | 2022 | | | | | | % Change | | | | | | % Change Excluding Foreign Exchange | | | | | | 2021 | | | | | | % Change | | | | | | % Change Excluding Foreign Exchange | | | | | | 2020 | | |

| Non-GAAP *(1)* | | | $ | 19,005 | | | | | 40 | | % | | | | 43 | | % | | | | $ | 13,623 | | | | | 81 | | % | | | | 98 | | % | | | | $ | 7,545 | |

| Non-GAAP *(1)* | | | $ | 7.48 | | | | | 39 | | % | | | | 43 | | % | | | | $ | 5.37 | | | | | 81 | | % | | | | 98 | | % | | | | $ | 2.97 | |

> 100%*

In 2022, the Company changed the treatment of certain items for purposes of its non-GAAP reporting.

Prior periods have been recast to conform to the current presentation.

Merck’s 2022 results reflect sustained strong demand for the Company’s innovative product portfolio benefiting patients globally, enabled by strong operational and commercial execution, the completion of business development transactions to support its science-led strategy, as well as progress in its pipeline across therapeutic areas, modalities and stage of development.


Sales within the Animal Health business were consistent with prior year.

Highlights of 2022 activity include the following:

- Exercised an option to jointly develop and commercialize personalized therapeutic cancer vaccine mRNA-4157/V940 under an existing collaboration and license agreement with Moderna, Inc. (Moderna).

- Entered into a collaboration with Orna Therapeutics (Orna), a company pioneering a new investigational class of engineered circular RNA therapies, to discover, develop, and commercialize multiple programs, including vaccines and therapeutics in the areas of infectious disease and oncology.

- Entered into a global co-development and co-commercialization agreement for Orion Corporation’s (Orion) investigational candidate ODM-208 (MK-5684) currently being evaluated for the treatment of patients with metastatic castration-resistant prostate cancer (mCRPC).

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

- Entered into a license and collaboration agreement with Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. (Kelun-Biotech) for the development, manufacture and commercialization of an investigational antibody drug conjugate (ADC) (MK-1200) for the treatment of solid tumors.

- Exercised an option to obtain an exclusive license (outside of Chinese mainland, Hong Kong, Macau and Taiwan) for the development, manufacture and commercialization of Kelun-Biotech’s trophoblast antigen 2 (TROP2)-targeting ADC programs, including its lead compound SKB-264 (MK-2870).

- Entered into a license and collaboration agreement expanding the Company’s relationship with Kelun-Biotech pursuant to which Merck gained exclusive rights for the research, development, manufacture and commercialization of up to seven investigational preclinical ADCs for the treatment of cancer (Kelun-Biotech retained rights for certain licensed and option ADCs for Chinese mainland, Hong Kong and Macau); the transaction closed in February 2023.

- Entered into agreement to acquire Imago BioSciences, Inc. (Imago), a clinical stage biopharmaceutical company developing new medicines for the treatment of myeloproliferative neoplasms and other bone marrow diseases; the acquisition closed in January 2023.

Also in 2022, *Vaxneuvance*, a vaccine to help prevent pneumococcal disease, was approved for expanded indications in the U.S. and the EU to include use in infants, adolescents and children.

In addition, in 2022, *Lagevrio*, which is being developed in a collaboration with Ridgeback Biotherapeutics LP (Ridgeback), received emergency conditional approval in China for the treatment of mild to moderate COVID-19 in adults who are at risk for progressing to severe COVID-19.

*Keytruda* is under review in the U.S. and/or internationally for supplemental indications for the treatment of certain patients with hepatocellular, Merkel cell, non-small-cell lung and urothelial cancers, as well as primary mediastinal B-cell lymphoma (PMBCL).

MK-4482, *Lagevrio*, an investigational oral antiviral COVID-19 medicine, is under a rolling review by the European Medicines Agency (EMA); the Committee for Medicinal Products for Human Use of the EMA has recommended the refusal of the marketing authorization, which Merck and Ridgeback intend to appeal.

- MK-3475A, the subcutaneous coformulation of pembrolizumab with hyaluronidase, for NSCLC;

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

- V116, an investigational 21-valent pneumococcal conjugate vaccine for the prevention of invasive pneumococcal disease and pneumococcal pneumonia in adults;

Merck’s capital allocation priorities are to make investments in its business to drive near- and long-term growth, including investing in opportunities to address important unmet medical needs and supporting the Company’s commercial opportunities.

In addition, Merck remains committed to its dividend and will continue to pursue the most compelling external science through value-enhancing business development transactions.

Research and development expenses in 2022 reflect higher clinical development spending particularly in the therapeutic areas of oncology, cardiovascular, infectious diseases and vaccines.



*GAAP and Non-GAAP EPS were negatively affected in 2022, 2021 and 2020 by $0.22, $0.65, and $1.56, respectively, of charges for certain upfront and pre-approval milestone payments related to collaborations and licensing agreements, as well as charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions.*

War in Ukraine

In February 2022, Russia invaded Ukraine.

The Company’s primary concerns are the safety and well-being of its employees and ensuring patients and customers have continued access to medicines and vaccines needed for patient and public health.

The Company is working cross-functionally across the globe to monitor and mitigate interruptions to business continuity resulting from the war, including its impact on Merck’s supply chain, operations and clinical trials.

For humanitarian reasons, the Company is continuing to supply essential medicines and vaccines in Russia while working to maintain compliance with international sanctions.

Merck is donating profits

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

The Company previously had a Healthcare Services segment that provided services and solutions focused on engagement, health analytics and clinical services to improve the value of care delivered to patients.

The Company divested the remaining businesses in this segment during the first quarter of 2020.

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

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

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

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

Calculation not meaningful.*

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.

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.

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)

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.

Verquvo is being jointly developed with Bayer AG (Bayer).

*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.

- MK-8591, islatravir, an investigational nucleoside reverse transcriptase translocation inhibitor (NRTTI) for the prevention of HIV-1 infection (which is on clinical hold);

The Company is allocating resources to support its commercial opportunities in the near term while investing heavily in research to support future innovations and long-term growth.

Research and development expenses in 2021 reflect higher clinical development spending and increased investment in discovery research and early drug development.

In December 2021, the Company completed its inaugural issuance of a $1.0 billion sustainability bond, which was part of an $8.0 billion underwritten bond offering.

The Company intends to use the net proceeds from the sustainability bond offering to support projects and partnerships in the Company’s priority environmental, social and governance (ESG) areas and contribute to the advancement of the United Nations Sustainable Development Goals.

During the COVID-19 pandemic Merck 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 an antiviral therapy, supporting efforts to expand manufacturing capacity and supply of SARS-CoV-2/COVID-19 medicines and vaccines (see below), and supporting health care providers and Merck’s communities.

Although COVID-19-related disruptions negatively affected results in 2021 and 2020, Merck continues to experience strong global underlying demand across its business.

Roughly 75% of Merck’s Pharmaceutical segment revenue is comprised of physician-administered products, which, despite strong underlying demand, have been affected by social distancing measures and fewer well visits.

Merck’s sales were favorably affected by the authorization of molnupiravir in several markets as discussed further below, which resulted in sales of $952 million in 2021.

In 2020, the estimated negative impact of COVID-19-related disruptions to Merck’s sales was approximately $2.1 billion, of which approximately $2.0 billion was attributable to the Pharmaceutical segment and approximately $50 million was attributable to the Animal Health segment.

In January 2021, the Company announced the discontinuation of the development programs for its COVID-19 vaccine candidates, V590 and V591, following Merck’s review of findings from Phase 1 clinical studies for the vaccines.

In these studies, both V590 and V591 were generally well tolerated, but the immune responses were inferior to those seen following natural infection and those reported for other SARS-CoV-2/COVID-19 vaccines.

Due to the discontinuation, the Company recorded a charge of $305 million in 2020, of which $260 million was reflected in *Cost of sales* and the remaining $45 million of costs were reflected in *Research and development* expenses.

Operating expenses were positively affected in 2020 by approximately $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.

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

In December 2021, the FDA granted EUA for molnupiravir based on positive results from the Phase 3 MOVe-OUT clinical trial.

Additionally, in December 2021, Japan’s MHLW granted Special Approval for

Emergency for molnupiravir.

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

Merck & Co., Inc. (Merck or the Company) is a global health care company that delivers innovative health solutions through its prescription medicines, [removed: vaccines,] [added: including] biologic [removed: therapies] [added: therapies, vaccines] and animal health products.

The Company’s operations are principally managed on a [removed: products] [added: product] basis and include two operating segments, [removed: which are the] Pharmaceutical and Animal [removed: Health segments,] [added: Health,] both of which are reportable segments.

The Company sells its products to veterinarians, [removed: distributors and] [added: distributors,] animal [removed: producers.][added: producers, farmers and pet owners.]

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

| *($ in millions)* | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Total Sales | | | $ | [removed: 48,704] [added: 59,283] | | | | | $ | [removed: 41,518] [added: 48,704] | | | | | $ | [removed: 39,121] [added: 41,518] | |

| Pharmaceutical | | | [removed: 42,754] [added: 52,005] | | | | | | [removed: 36,610] [added: 42,754] | | | | | | [removed: 34,100] [added: 36,610] | | |

| *Keytruda* | | | [removed: 17,186] [added: 20,937] | | | | | | [removed: 14,380] [added: 17,186] | | | | | | [removed: 11,084] [added: 14,380] | | |

| *Gardasil/Gardasil* 9 | | | [removed: 5,673] [added: 6,897] | | | | | | [removed: 3,938] [added: 5,673] | | | | | | [removed: 3,737] [added: 3,938] | | |

| *Januvia/Janumet* | | | [removed: 5,288] [added: 4,513] | | | | | | [removed: 5,276] [added: 5,288] | | | | | | [removed: 5,524] [added: 5,276] | | |

| *ProQuad/M-M-R* II*/Varivax* | | | [removed: 2,135] [added: 2,241] | | | | | | [removed: 1,878] [added: 2,135] | | | | | | [removed: 2,275] [added: 1,878] | | |

| *Bridion* | | | [removed: 1,532] [added: 1,685] | | | | | | [removed: 1,198] [added: 1,532] | | | | | | [removed: 1,131] [added: 1,198] | | |

| Alliance revenue - Lynparza*(1)* | | | [removed: 989] [added: 1,116] | | | | | | [removed: 725] [added: 989] | | | | | | [removed: 444] [added: 725] | | |

| *Simponi* | | | [removed: 825] [added: 706] | | | | | | [removed: 838] [added: 825] | | | | | | [removed: 830] [added: 838] | | |

| *RotaTeq* | | | [removed: 807] [added: 783] | | | | | | [removed: 797] [added: 807] | | | | | | [removed: 791] [added: 797] | | |

| Alliance revenue - Lenvima*(1)* | | | [removed: 704] [added: 876] | | | | | | [removed: 580] [added: 704] | | | | | | [removed: 404] [added: 580] | | |

| Animal Health | | | [removed: 5,568] [added: 5,550] | | | | | | [removed: 4,703] [added: 5,568] | | | | | | [removed: 4,393] [added: 4,703] | | |

| Livestock | | | [removed: 3,295] [added: 3,300] | | | | | | [removed: 2,939] [added: 3,295] | | | | | | [removed: 2,784] [added: 2,939] | | |

| Companion Animals | | | [removed: 2,273] [added: 2,250] | | | | | | [removed: 1,764] [added: 2,273] | | | | | | [removed: 1,609] [added: 1,764] | | |

| Other Revenues*(2)* | | | [removed: 382] [added: 1,728] | | | | | | [removed: 205] [added: 382] | | | | | | [removed: 628] [added: 205] | | |

[removed: *(1)* *Alliance] [added: *(1)Alliance] revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs.*

*(2)Other revenues are primarily comprised of [removed: third-party manufacturing sales and] miscellaneous corporate revenues, including revenue hedging [removed: activities.*][added: activities, as well as revenue from third-party manufacturing arrangements.*]

[removed: Pharmaceutical][added: *Pharmaceutical*]

*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 [removed: Lymphoma] [added: lymphoma] (cHL), cutaneous squamous cell carcinoma (cSCC), esophageal or gastroesophageal junction (GEJ) carcinoma, head and neck squamous cell carcinoma (HNSCC), hepatocellular carcinoma (HCC), non-small-cell lung cancer (NSCLC), melanoma, Merkel cell carcinoma, microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) cancer (solid tumors), including MSI-H/dMMR colorectal cancer (CRC), [added: MSI-H/dMMR advanced endometrial carcinoma,] primary mediastinal large B-cell lymphoma (PMBCL), tumor mutational burden-high (TMB-H) 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 trastuzumab, fluoropyrimidine- and platinum-containing chemotherapy for 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 [added: advanced] cervical cancer, in combination with chemotherapy for [added: locally recurrent unresectable or metastatic] triple-negative breast cancer (TNBC), [added: and] in combination with axitinib for advanced renal cell carcinoma [removed: (RCC), and in combination with lenvatinib for endometrial carcinoma or RCC.][added: (RCC).]

[removed: *Keytruda* is also] [added: | September 2022 | | | MHLW] approved [added: *Keytruda*] as [removed: a] monotherapy for the adjuvant treatment of [removed: certain] patients with [removed: RCC.][added: stage IIB or IIC melanoma after complete resection. | | | | | |]

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 [added: or recurrent] ovarian, [added: early or metastatic] breast, [added: metastatic] pancreatic, and [added: metastatic castration-resistant] prostate cancers; [removed: and] [added: alliance revenue related to sales of] Lenvima [removed: (lenvatinib)] [added: (lenvatinib), an oral receptor tyrosine kinase inhibitor,] for certain types of [added: thyroid cancer, RCC, HCC, in combination with everolimus for certain patients with advanced RCC, and in combination with *Keytruda* for certain patients with advanced endometrial carcinoma or advanced RCC; and alliance revenue related to Reblozyl (luspatercept-aamt) for the treatment of certain types of anemia.]

*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); [removed: *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; [added: *Pneumovax* 23 (pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease;] 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; *Prevymis* (letermovir) for the prophylaxis of cytomegalovirus (CMV) reactivation and disease in adult CMV-seropositive recipients \[R+\] of an allogeneic hematopoietic stem cell transplant; [added: *Dificid* (fidaxomicin) for the treatment of *C. difficile*\-associated diarrhea;] *Primaxin* (imipenem and cilastatin) for injection, an antibiotic for the treatment of certain bacterial infections; *Noxafil* (posaconazole), an antifungal agent for the prevention of certain invasive fungal infections; [removed: *Cancidas* (caspofungin acetate)] [added: *Invanz* (ertapenem)] for injection, an [removed: anti-fungal agent] [added: antibiotic] for the treatment of certain [removed: fungal] [added: bacterial] infections; [removed: *Invanz* (ertapenem)] [added: *Cancidas* (caspofungin acetate)] for injection, an [removed: antibiotic] [added: anti-fungal agent] for the treatment of certain [removed: bacterial] [added: fungal] infections; and *Zerbaxa* (ceftolozane and tazobactam) for injection, a combination antibacterial and beta-lactamase inhibitor for the treatment of certain bacterial infections.

*Simponi* (golimumab), a once-monthly subcutaneous treatment for certain inflammatory diseases; and *Remicade* (infliximab), a treatment for inflammatory diseases, both of which the Company markets in Europe, Russia and [removed: Turkey.][added: Türkiye.]

*Belsomra* (suvorexant), an orexin receptor [removed: antagonist] [added: antagonist,] indicated for the treatment of insomnia, characterized by difficulties with sleep onset and/or sleep maintenance.

[removed: Molnupiravir,] [added: *Lagevrio*,] an investigational oral antiviral COVID-19 [removed: medicine;] [added: medicine available in the U.S. under Emergency Use Authorization (EUA);] *Isentress/Isentress HD* (raltegravir), an HIV integrase inhibitor for use in combination with other antiretroviral agents for the treatment of HIV-1 infection.

[removed: 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.

[removed: Animal Health][added: *Animal Health*]

[added: *Nuflor* (Florfenicol) antibiotic range for use in cattle and swine; *Bovilis*/*Vista* vaccine lines for infectious diseases in cattle; *Banamine* (Flunixin meglumine) bovine and swine anti-inflammatory; *Estrumate* (cloprostenol sodium) for the treatment of fertility disorders in cattle; *Matrix* (altrenogest) fertility management for swine; *Resflor* (florfenicol and flunixin meglumine)*,* a combination broad-spectrum antibiotic and non-steroidal anti-inflammatory] drug for bovine respiratory disease; *Zuprevo* (Tildipirosin) for bovine respiratory disease; *Zilmax* (zilpaterol hydrochloride) and *Revalor* (trenbolone acetate and estradiol) to improve production efficiencies in beef cattle; *Safe-Guard* (fenbendazole) de-wormer for cattle; *M+Pac* (Mycoplasma Hyopneumoniae Bacterin) swine pneumonia vaccine; *Porcilis* (Lawsonia intracellularis baterin) and *Circumvent* (Porcine Circovirus Vaccine, Type 2, Killed Baculovirus Vector) vaccine lines for infectious diseases in swine; *Nobilis*/*Innovax* (Live Marek’s Disease Vector)*,* vaccine lines for poultry; *Paracox* and *Coccivac* coccidiosis vaccines; *Exzolt*, a systemic treatment for poultry red mite infestations; *Slice* (Emamectin benzoate) parasiticide for sea lice in salmon; *Aquavac* (Avirulent Live Culture)/*Norvax* vaccines against bacterial and viral disease in fish; *Compact PD* vaccine for salmon; *Aquaflor* (Florfenicol) antibiotic for farm-raised fish; and *Allflex Livestock Intelligence* solutions for animal identification, monitoring and traceability.

Set forth below is a summary of significant product approvals [removed: and authorizations] received by the Company in [removed: 2021.][added: 2022.]

| [removed: July 2021] [added: March 2022] | | | [removed: FDA] [added: U.S. Food and Drug Administration (FDA)] approved *Keytruda* [removed: plus Lenvima] [added: as a single agent] for the treatment of patients with advanced endometrial carcinoma that is [removed: not] MSI-H or [removed: dMMR,] [added: dMMR] who have disease progression following prior systemic therapy in any setting and are not candidates for curative surgery or radiation. | | | | | |

| [removed: July 2021] [added: November 2022] | | | [removed: FDA] [added: NMPA] approved *Keytruda* for the treatment of patients with [removed: high-risk,] [added: high-risk] early-stage TNBC [added: whose tumors express PD-L1,] in combination with chemotherapy as neoadjuvant treatment, [added: and] then continued as [removed: single agent] [added: a monotherapy] as adjuvant treatment after surgery. | | | | | |

[removed: | August 2021 | | | FDA approved] *Keytruda* [added: is under priority review by the FDA] for [added: use in combination with Padcev (enfortumab vedotin-ejfv) for] the treatment of [added: certain] patients with locally advanced or metastatic urothelial [removed: carcinoma] [added: cancer] who are not eligible [removed: for any platinum-containing] [added: to receive cisplatin-containing] chemotherapy. [removed: | | | | | |]

| [removed: October 2021] [added: April 2022] | | | [removed: FDA] [added: EC] approved *Keytruda* in combination with chemotherapy, with or without bevacizumab, for the treatment of [removed: patients with] persistent, recurrent or metastatic cervical cancer [added: in certain adults] whose tumors express [removed: PD-L1 (CPS ≥1) as determined by an FDA-approved test.] [added: PD-L1.] | | | | | |

| *Lagevrio* | | | 5,684 | | | | | | 952 | | | | | | — | | |

*Keytruda* is also approved as a monotherapy for the adjuvant treatment of certain patients with RCC, for certain patients with completely resected stage IIB, IIC or III melanoma, and for adjuvant treatment following resection and platinum-based chemotherapy for adult patients with stage IB (T2a ≥4 cm), II, or IIIA NSCLC.

Adempas (riociguat), a cardiovascular drug for the treatment of chronic thromboembolic pulmonary hypertension or pulmonary arterial hypertension in certain patients; Verquvo (vericiguat), a medicine to reduce the

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

2022 Product Approvals

| *Keytruda* | | | January 2022 | | | European Commission (EC) approved *Keytruda* as monotherapy for the adjuvant treatment of adults with RCC at increased risk of recurrence following nephrectomy, or following nephrectomy and resection of metastatic lesions. | | |

| February 2022 | | | Japan’s Ministry of Health, Labor and Welfare (MHLW) approved *Keytruda* plus Lenvima for radically unresectable or metastatic RCC. | | | | | |

| September 2022 | | | MHLW approved *Keytruda* in combination with chemotherapy as neoadjuvant treatment, and then continued as monotherapy as adjuvant treatment after surgery for patients with hormone receptor-negative and HER2-negative breast cancer at high risk of recurrence. | | | | | |

| September 2022 | | | MHLW approved *Keytruda* in combination with chemotherapy, with or without bevacizumab, for the treatment of patients with advanced or recurrent cervical cancer with no prior chemotherapy who are not amenable to curative treatment. | | | | | |

| October 2022 | | | China’s National Medical Products Administration (NMPA) approved *Keytruda* as monotherapy for the treatment of patients with HCC who have been previously treated with sorafenib or oxaliplatin-based chemotherapy. | | | | | |

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

| *Lagevrio(1)* | | | December 2022 | | | NMPA granted emergency conditional approval for *Lagevrio* for the treatment of mild to moderate COVID-19 in adults who are at risk for progressing to severe COVID-19. | | |

| Lynparza*(2)* | | | March 2022 | | | FDA approved Lynparza for the adjuvant treatment of adult patients with deleterious or suspected deleterious germline *BRCA*\-mutated, HER2-negative high-risk early breast cancer who have been treated with neoadjuvant or adjuvant chemotherapy. | | |

| August 2022 | | | MHLW approved Lynparza for the adjuvant treatment for patients with *BRCA*\-mutated, HER2-negative high recurrent risk breast cancer. | | | | | |

| August 2022 | | | EC approved Lynparza as monotherapy or in combination with endocrine therapy for the adjuvant treatment of adult patients with germline BRCA1/2-mutations who have HER2-negative, high-risk early breast cancer previously treated with neoadjuvant or adjuvant chemotherapy. | | | | | |

| September 2022 | | | NMPA approved Lynparza as first-line maintenance treatment for 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 in combination with bevacizumab and whose cancer is associated with homologous recombination deficiency (HRD)-positive status. | | | | | |

| December 2022 | | | EC approved Lynparza in combination with abiraterone and prednisone or prednisolone for the treatment of adult patients with metastatic castration-resistant prostate cancer (mCRPC) in whom chemotherapy is not clinically indicated. | | | | | |

| September 2022 | | | MHLW approved *Vaxneuvance* for prevention of infections caused by Streptococcus pneumoniae in the elderly or adults who are considered at increased risk for disease caused by Streptococcus pneumoniae. | | | | | |

The Company is active in acquiring and

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

In 2022, Congress passed the Inflation Reduction Act, which makes significant changes to how drugs are covered and paid for under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

the liability for certain drug benefits, and government price-setting for certain Medicare Part D drugs, starting in 2026, and Medicare Part B drugs starting in 2028.

The long-term implications of the Inflation Reduction Act remain uncertain and subject to various factors, including the manner in which U.S. Department of Health and Human Services decides to implement the statute.

Many experts and analysts, both within the industry and outside, have predicted that the law will harm innovation in the pharmaceutical industry and result in fewer new treatments being developed and approved over time.

Merck is working to mitigate the potentially harmful effects that the law could have on innovation.

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

most EU Member States.

In addition, if a Merck product has the same medical action or composition of another product that is subject to market expansion re-pricing, the Merck product could also be subject to re-pricing unless it meets exception criteria.

A new NRDL was recently completed in which new entries averaged 60% price reductions.

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

The Company systematically evaluates its pipeline candidates to identify potential to address significant public health burden and unmet medical needs in underserved health care settings.

Products continue to be evaluated for their potential throughout their life cycle to account for changes in the external environment.

The Company also collaborates with different stakeholders,

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

including private, governmental, multilateral and non-profit organizations, to design and deliver sustainable solutions to help address access challenges at the payer, provider and patient levels.

Globally, Merck has made substantial contributions to access to health through key initiatives, including product donations for humanitarian assistance in low-income countries through the Medical Outreach Program.

The Mectizan Donation Program, the longest running disease-specific drug donation program of its kind, supports the elimination of two neglected tropical diseases – onchocerciasis and lymphatic filariasis.

Since then, the Company diligently entered into the EU-approved Standard Contractual Clauses with its vendors, suppliers, collaboration partners and clinical trial sites in order to facilitate the lawful transfer of personal data from the EU to the U.S. In addition, President Biden issued an Executive Order on October 7, 2022 to address the data privacy concerns raised in the Schrems II decision through introducing, among other measures, further safeguards and oversight of personal data collection by U.S. signals intelligence activities and providing individuals with a redress mechanism in the U.S. for their data protection concerns.

The Company previously had a Healthcare Services segment that provided services and solutions focused on engagement, health analytics and clinical services to improve the value of care delivered to patients.

The Company divested the remaining businesses in this segment in the first quarter of 2020.

Spin-Off of Organon & Co.

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

| *Pneumovax* 23 | | | 893 | | | | | | 1,087 | | | | | | 926 | | |

| *Isentress/Isentress HD* | | | 769 | | | | | | 857 | | | | | | 975 | | |

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.

*Nuflor* (Florfenicol) antibiotic range for use in cattle and swine; *Bovilis*/*Vista* vaccine lines for infectious diseases in cattle; *Banamine* (Flunixin meglumine) bovine and swine anti-inflammatory; *Estrumate* (cloprostenol sodium) for the treatment of fertility disorders in cattle; *Matrix* (altrenogest) fertility management for swine; *Resflor* (florfenicol and flunixin meglumine)*,* a combination broad-spectrum antibiotic and non-steroidal anti-inflammatory

2021 Product Approvals and Authorizations

| *Keytruda* | | | January 2021 | | | European Commission (EC) approved *Keytruda* as monotherapy for the first-line treatment of adult patients with MSI-H or dMMR CRC. | | |

| 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. | | | | | |

| *Keytruda* | | | June 2021 | | | EC approved *Keytruda* in combination with platinum- and fluoropyrimidine-based chemotherapy for the first-line treatment of patients with locally advanced unresectable or metastatic carcinoma of the esophagus or HER2-negative GEJ adenocarcinoma in adults whose tumors express PD-L1 (Combined Positive Score \[CPS\] ≥10). | | |

| July 2021 | | | FDA approved *Keytruda* as monotherapy for the treatment of patients with locally advanced cSCC that is not curable by surgery or radiation. | | | | | |

| 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. | | | | | |

| August 2021 | | | FDA approved *Keytruda* plus Lenvima for the first-line treatment of adult patients with advanced RCC. | | | | | |

| September 2021 | | | NMPA approved *Keytruda* in combination with platinum- and fluoropyrimidine-based chemotherapy for first-line treatment of patients with locally advanced, unresectable or metastatic carcinoma of the esophageal or GEJ. | | | | | |

| October 2021 | | | EC approved *Keytruda* in combination with chemotherapy for the first-line treatment of locally recurrent unresectable or metastatic TNBC in adults whose tumors express PD-L1 (CPS ≥1) and who have not received prior chemotherapy for metastatic disease. | | | | | |

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

| *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 | | | 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. | | | | | |

| Lynparza*(1)* | | | June 2021 | | | NMPA approved Lynparza as monotherapy for the treatment of adult patients with germline or somatic *BRCA*\-mutated metastatic castration-resistant prostate cancer who have progressed following prior treatment that included a new hormonal agent (abiraterone, enzalutamide). | | |

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

| 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. | | |

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

In 2021, Congress actively considered multiple versions of drug pricing legislation that could significantly impact branded pharmaceutical manufacturers.

This legislation would implement a government negotiation plan for certain products covered by Medicare Parts B and D, institute financial penalties for price increases above inflation, and redesign the Medicare Part D program to include a cap on patients’ out of pocket costs and realign the liability for costs of the benefit among manufacturers, health plans, and the government.

It is unclear when or if this legislation will be passed by Congress, and it remains very uncertain as to what other proposals, if any, may be included as part of future federal legislative proposals that would directly or indirectly affect the Company.

In February 2016, the Centers for Medicare & Medicaid Services (CMS) issued the Medicaid rebate final rule that implemented provisions of the ACA effective April 1, 2016.

The rule provides comprehensive guidance on the calculation of AMP and Best Price, two metrics used to determine the rebates drug manufacturers are required to pay to state Medicaid programs.

On December 21, 2020, CMS issued a final rule making significant changes to these requirements.

Effective January 1, 2023, this final rule changes the way that manufacturers must calculate Best Price in relation to certain patient support programs, including coupons.

PhRMA, a pharmaceutical industry trade group of which the Company is a member, filed a complaint challenging this rule as invalid asserting that it conflicts

with the plain language of the Medicaid drug rebate statute.

As filed with the Securities and Exchange Commission on February [removed: 25, 2022][added: 24, 2023]

For the Fiscal Year Ended December 31, [removed: 2021][added: 2022]

Number of shares of Common Stock ($0.50 par value) outstanding as of January 31, [removed: 2022: 2,527,733,606.][added: 2023: 2,538,592,467.]

Aggregate market value of Common Stock ($0.50 par value) held by non-affiliates on June 30, [removed: 2021] [added: 2022] based on [added: the] closing price on June 30, [removed: 2021: $196,870,000,000.][added: 2022: $230,820,000,000.]

| Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 24, 2022,] [added: 23, 2023,] 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 | | |

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

| Item 1. | | | [removed: [Business](#i1e1e934bfffd457891fb6e33dae50d64_13)] [added: [Business](#ia384118d157240e09e39541b90e2080f_13)] | | | | | | [removed: [1](#i1e1e934bfffd457891fb6e33dae50d64_13)] [added: [1](#ia384118d157240e09e39541b90e2080f_13)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i1e1e934bfffd457891fb6e33dae50d64_52)] [added: Factors](#ia384118d157240e09e39541b90e2080f_52)] | | | | | | [removed: [27](#i1e1e934bfffd457891fb6e33dae50d64_52)] [added: [24](#ia384118d157240e09e39541b90e2080f_52)] | | |

| | | | [Cautionary Factors that May Affect Future [removed: Results](#i1e1e934bfffd457891fb6e33dae50d64_55)] [added: Results](#ia384118d157240e09e39541b90e2080f_55)] | | | | | | [removed: [41](#i1e1e934bfffd457891fb6e33dae50d64_55)] [added: [38](#ia384118d157240e09e39541b90e2080f_55)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i1e1e934bfffd457891fb6e33dae50d64_58)] [added: Comments](#ia384118d157240e09e39541b90e2080f_58)] | | | | | | [removed: [43](#i1e1e934bfffd457891fb6e33dae50d64_58)] [added: [39](#ia384118d157240e09e39541b90e2080f_58)] | | |

| Item 2. | | | [removed: [Properties](#i1e1e934bfffd457891fb6e33dae50d64_61)] [added: [Properties](#ia384118d157240e09e39541b90e2080f_61)] | | | | | | [removed: [43](#i1e1e934bfffd457891fb6e33dae50d64_61)] [added: [39](#ia384118d157240e09e39541b90e2080f_61)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i1e1e934bfffd457891fb6e33dae50d64_64)] [added: Proceedings](#ia384118d157240e09e39541b90e2080f_64)] | | | | | | [removed: [43](#i1e1e934bfffd457891fb6e33dae50d64_64)] [added: [39](#ia384118d157240e09e39541b90e2080f_64)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i1e1e934bfffd457891fb6e33dae50d64_67)] [added: Disclosures](#ia384118d157240e09e39541b90e2080f_67)] | | | | | | [removed: [43](#i1e1e934bfffd457891fb6e33dae50d64_67)] [added: [39](#ia384118d157240e09e39541b90e2080f_67)] | | |

| | | | [Executive Officers of the [removed: Registrant](#i1e1e934bfffd457891fb6e33dae50d64_70)] [added: Registrant](#ia384118d157240e09e39541b90e2080f_70)] | | | | | | [removed: [44](#i1e1e934bfffd457891fb6e33dae50d64_70)] [added: [40](#ia384118d157240e09e39541b90e2080f_70)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i1e1e934bfffd457891fb6e33dae50d64_76)] [added: Securities](#ia384118d157240e09e39541b90e2080f_76)] | | | | | | [removed: [46](#i1e1e934bfffd457891fb6e33dae50d64_76)] [added: [41](#ia384118d157240e09e39541b90e2080f_76)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i1e1e934bfffd457891fb6e33dae50d64_79)] [added: Operations](#ia384118d157240e09e39541b90e2080f_79)] | | | | | | [removed: [48](#i1e1e934bfffd457891fb6e33dae50d64_79)] [added: [43](#ia384118d157240e09e39541b90e2080f_79)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i1e1e934bfffd457891fb6e33dae50d64_121)] [added: Risk](#ia384118d157240e09e39541b90e2080f_121)] | | | | | | [removed: [78](#i1e1e934bfffd457891fb6e33dae50d64_121)] [added: [70](#ia384118d157240e09e39541b90e2080f_121)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i1e1e934bfffd457891fb6e33dae50d64_124)] [added: Data](#ia384118d157240e09e39541b90e2080f_124)] | | | | | | [removed: [79](#i1e1e934bfffd457891fb6e33dae50d64_124)] [added: [71](#ia384118d157240e09e39541b90e2080f_124)] | | |

| | | | (a) | | | [Financial [removed: Statements](#i1e1e934bfffd457891fb6e33dae50d64_127)] [added: Statements](#ia384118d157240e09e39541b90e2080f_127)] | | | [removed: [79](#i1e1e934bfffd457891fb6e33dae50d64_127)] [added: [71](#ia384118d157240e09e39541b90e2080f_127)] | | |

| | | | | | | [Notes to Consolidated Financial [removed: Statements](#i1e1e934bfffd457891fb6e33dae50d64_142)] [added: Statements](#ia384118d157240e09e39541b90e2080f_142)] | | | [removed: [83](#i1e1e934bfffd457891fb6e33dae50d64_142)] [added: [75](#ia384118d157240e09e39541b90e2080f_142)] | | |

| | | | | | | [Report of Independent Registered Public Accounting [removed: Firm](#i1e1e934bfffd457891fb6e33dae50d64_202)] [added: Firm](#ia384118d157240e09e39541b90e2080f_208)] | | | [removed: [140](#i1e1e934bfffd457891fb6e33dae50d64_202)] [added: [128](#ia384118d157240e09e39541b90e2080f_208)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i1e1e934bfffd457891fb6e33dae50d64_205)] [added: Disclosure](#ia384118d157240e09e39541b90e2080f_214)] | | | | | | [removed: [143](#i1e1e934bfffd457891fb6e33dae50d64_205)] [added: [130](#ia384118d157240e09e39541b90e2080f_214)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i1e1e934bfffd457891fb6e33dae50d64_208)] [added: Procedures](#ia384118d157240e09e39541b90e2080f_217)] | | | | | | [removed: [143](#i1e1e934bfffd457891fb6e33dae50d64_208)] [added: [130](#ia384118d157240e09e39541b90e2080f_217)] | | |

| Item 9B. | | | [Other [removed: Information](#i1e1e934bfffd457891fb6e33dae50d64_214)] [added: Information](#ia384118d157240e09e39541b90e2080f_223)] | | | | | | [removed: [144](#i1e1e934bfffd457891fb6e33dae50d64_214)] [added: [131](#ia384118d157240e09e39541b90e2080f_223)] | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i1e1e934bfffd457891fb6e33dae50d64_2380)] [added: Inspections](#ia384118d157240e09e39541b90e2080f_226)] | | | | | | [removed: [144](#i1e1e934bfffd457891fb6e33dae50d64_2380)] [added: [131](#ia384118d157240e09e39541b90e2080f_226)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i1e1e934bfffd457891fb6e33dae50d64_220)] [added: Governance](#ia384118d157240e09e39541b90e2080f_232)] | | | | | | [removed: [145](#i1e1e934bfffd457891fb6e33dae50d64_220)] [added: [132](#ia384118d157240e09e39541b90e2080f_232)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i1e1e934bfffd457891fb6e33dae50d64_223)] [added: Compensation](#ia384118d157240e09e39541b90e2080f_235)] | | | | | | [removed: [145](#i1e1e934bfffd457891fb6e33dae50d64_223)] [added: [132](#ia384118d157240e09e39541b90e2080f_235)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and [removed: Related](#i1e1e934bfffd457891fb6e33dae50d64_226)[ ](#i1e1e934bfffd457891fb6e33dae50d64_226)[Stockholder Matters](#i1e1e934bfffd457891fb6e33dae50d64_226)] [added: Related](#ia384118d157240e09e39541b90e2080f_238)[ ](#ia384118d157240e09e39541b90e2080f_238)[Stockholder Matters](#ia384118d157240e09e39541b90e2080f_238)] | | | | | | [removed: [146](#i1e1e934bfffd457891fb6e33dae50d64_226)] [added: [133](#ia384118d157240e09e39541b90e2080f_238)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i1e1e934bfffd457891fb6e33dae50d64_229)] [added: Independence](#ia384118d157240e09e39541b90e2080f_241)] | | | | | | [removed: [146](#i1e1e934bfffd457891fb6e33dae50d64_229)] [added: [133](#ia384118d157240e09e39541b90e2080f_241)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#i1e1e934bfffd457891fb6e33dae50d64_232)] [added: Services](#ia384118d157240e09e39541b90e2080f_244)] | | | | | | [removed: [146](#i1e1e934bfffd457891fb6e33dae50d64_232)] [added: [133](#ia384118d157240e09e39541b90e2080f_244)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#i1e1e934bfffd457891fb6e33dae50d64_238)] [added: Schedules](#ia384118d157240e09e39541b90e2080f_250)] | | | | | | [removed: [147](#i1e1e934bfffd457891fb6e33dae50d64_238)] [added: [134](#ia384118d157240e09e39541b90e2080f_250)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#i1e1e934bfffd457891fb6e33dae50d64_250)] [added: Summary](#ia384118d157240e09e39541b90e2080f_262)] | | | | | | [removed: [151](#i1e1e934bfffd457891fb6e33dae50d64_250)] [added: [138](#ia384118d157240e09e39541b90e2080f_262)] | | |


| 126 East Lincoln Avenue | | | | | | | | | | | | | | |

| Rahway | | | | | | New Jersey | | | 07065 | | | | | |

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| | | | | | | | | |

| [Part I](#ia384118d157240e09e39541b90e2080f_10) | | | | | | | | | | | |

| [Part II](#ia384118d157240e09e39541b90e2080f_73) | | | | | | | | | | | |

| Item 6. | | | [\[Reserved\]](#ia384118d157240e09e39541b90e2080f_2209) | | | | | | [42](#ia384118d157240e09e39541b90e2080f_2209) | | |

| | | | [Management’s Report](#ia384118d157240e09e39541b90e2080f_220) | | | | | | [130](#ia384118d157240e09e39541b90e2080f_220) | | |

| [Part III](#ia384118d157240e09e39541b90e2080f_223) | | | | | | | | | | | |

| [Part IV](#ia384118d157240e09e39541b90e2080f_247) | | | | | | | | | | | |

| | | | [Signatures](#ia384118d157240e09e39541b90e2080f_265) | | | | | | [139](#ia384118d157240e09e39541b90e2080f_265) | | |

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

_________________________________

| 2000 Galloping Hill Road | | | | | | | | | | | | | | |

| Kenilworth | | | | | | New Jersey | | | 07033 | | | | | |

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

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

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

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

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

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

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

Merck’s manufacturing operations are currently headquartered in [removed: Whitehouse Station,] [added: Rahway,] New Jersey.

A number of properties were transferred to Organon in the Spin-Off.

Capital expenditures were $4.4 billion in 2021, $4.4 billion in 2020 and $3.4 billion in 2019.

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

Abroad, such expenditures amounted to $1.6 billion in 2021, $1.8 billion in 2020, and $1.5 billion in 2019.

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

Executive Officers of the Registrant (ages as of February 1, [removed: 2022)][added: 2023)]

| Robert M. Davis | | | [removed: 55] [added: 56] | | | [added: Chairman, President and] Chief Executive Officer [added: (since December 2022); Chief Executive Officer] and President [removed: (since July 2021);] [added: (July 2021-December 2022);] Executive Vice President, Global Services, and Chief Financial Officer [removed: (since April 2016)] [added: (April 2016-July 2021)] | | |

| Sanat Chattopadhyay | | | [removed: 62] [added: 63] | | | Executive Vice President and President, Merck Manufacturing Division (since March 2016) | | |

| Richard R. DeLuca, Jr. | | | [removed: 59] [added: 60] | | | Executive Vice President and President, Merck Animal Health (since September 2011) | | |

| Cristal Downing | | | [removed: 53] [added: 54] | | | 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 | | |

| Rita A. Karachun | | | [removed: 58] [added: 59] | | | Senior Vice President Finance - Global Controller (since March 2014) | | |

| Michael A. Klobuchar | | | [removed: 46] [added: 47] | | | 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 [removed: 2019); Prior to that, Vice President, Global Business and Financial Planning] [added: 2019)] | | |

| Lisa LeCointe-Cephas | | | [removed: 40] [added: 41] | | | Senior Vice President, Chief Ethics and Compliance Officer (since April 2021); Executive Director, Head of Global Investigations (February [removed: 2018 – April] [added: 2018-April] 2021); Prior to that, Senior Counsel, Litigation and Government Investigations, Bristol-Myers Squibb Company | | |

| Dean Li | | | [removed: 59] [added: 60] | | | [added: Executive Vice] President, [added: President,] Merck Research Laboratories (since January 2021); Senior Vice President, Discovery Sciences and Translational Medicine, Merck Research Laboratories (November 2017-January 2021); Vice President, Translational Medicine (March 2017-November [removed: 2017); Prior to that, Chief Scientific Officer and Associate Vice President, University of Utah Health Sciences] [added: 2017)] | | |

| Caroline Litchfield | | | [removed: 53] [added: 54] | | | Executive Vice President and Chief Financial Officer (since April 2021); Senior Vice President, Corporate Treasurer (January 2018-March [removed: 2021); Prior to that, Senior Vice President, Global Human Health] [added: 2021)] | | |

| Steven C. Mizell | | | [removed: 61] [added: 62] | | | Executive Vice President, Chief Human Resources Officer (since [removed: December 2016)] [added: October 2018); Prior to that, Executive Vice President, Human Resources, Monsanto Company] | | |

| David M. Williams | | | [removed: 53] [added: 54] | | | Executive Vice President, Chief Information and Digital Officer [removed: (Since] [added: (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 [removed: 2019); Prior to that, Associate Vice President and Chief Information Officer, Merck Animal Health] [added: 2019)] | | |

| Jennifer Zachary | | | [removed: 44] [added: 45] | | | Executive Vice President, General Counsel and Corporate Secretary (since January 2020); Executive Vice President and General Counsel (April 2018-January 2020); Prior to that, Partner, Covington & Burling LLP | | |

| [removed: Jannie] [added: Johannes J.] Oosthuizen | | | [removed: 54] [added: 55] | | | 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) | | |

| Chirfi Guindo | | | 57 | | | Senior Vice President, Chief Marketing Officer, Human Health (since July 2022); Prior to that, Executive Vice President, Head of Global Product Strategy and Commercialization, Biogen Inc. (July 2018-July 2022); Executive Vice President, Head of Global Marketing, Market Access and Customer Innovation, Biogen Inc. (November 2017-June 2018) | | |

| Joseph Romanelli | | | 49 | | | Senior Vice President and President MSD International Human Health (since July 2022); Chief Executive Officer JiXing Pharmaceuticals (July 2021-July 2022); President MSD China (December 2016-July 2021) | | |

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

| | | | | | | | | |

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

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

| Kenneth C. Frazier | | | 67 | | | Executive Chairman (since July 2021); Prior to that, Chairman, President and Chief Executive Officer | | |

| Julie L. Gerberding | | | 65 | | | Executive Vice President and Chief Patient Officer, Population Health and Sustainability (since July 2016) | | |

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.

| 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 | | |

As of January 31, [removed: 2022,] [added: 2023,] there were approximately [removed: 99,932] [added: 95,850] shareholders of record of the Company’s Common Stock.

Issuer purchases of equity securities for the three months ended December 31, [removed: 2021] [added: 2022] were as follows:

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

| October 1 — October 31 | | | | | | [removed: 246,194] [added: —] | | | | | | [removed: $74.92] [added: —] | | | | | | [removed: 246,194] [added: —] | | | | | | $5,047 | | |

*(1)* [removed: *All] [added: *The Company did not purchase any] shares [removed: purchased] during the [removed: period were made as part of a] [added: three months ended December 31, 2022 under the] plan approved by the Board of Directors in October 2018 to purchase up to $10 billion in Merck shares for its treasury.*

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

The following graph assumes a $100 investment on December 31, [removed: 2016,] [added: 2017,] and reinvestment of all dividends, in each of the Company’s Common Stock, the S&P 500 Index, and a composite peer group of major U.S. and European-based pharmaceutical companies, which are: AbbVie Inc., Amgen Inc., AstraZeneca plc, Bristol-Myers Squibb Company, Johnson & Johnson, Eli Lilly and Company, [added: Gilead Sciences Inc.,] GlaxoSmithKline plc, Novartis AG, Pfizer Inc., Roche Holding AG, and Sanofi SA.

| | | | End of Period Value | | | | | | [removed: 2021/2016] [added: 2022/2017] CAGR* | | |

[removed: ][added: ]

| | | | [removed: 2016 | | |] 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | [added: 2022 | | |]

* Peer group average was calculated on a market cap weighted basis as of December 31, [removed: 2016.*][added: 2017.*]

| | | | | | | | | | | | | | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | | | | ($ in millions) | | |

| Total | | | | | | — | | | | | | — | | | | | | — | | | | | | | | |

| MERCK | | | $242 | | | | | | 19% | | |

| PEER GROUP | | | 175 | | | | | | 12% | | |

| S&P 500 | | | 157 | | | | | | 9% | | |

| MERCK | | | 100.0 | | | 140.0 | | | 171.2 | | | 158.8 | | | 161.7 | | | 241.5 | | |

| PEER GROUP | | | 100.0 | | | 106.1 | | | 125.7 | | | 134.2 | | | 164.8 | | | 174.8 | | |

| S&P 500 | | | 100.0 | | | 95.6 | | | 125.7 | | | 148.8 | | | 191.5 | | | 156.8 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | ($ in millions) | | |

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

| 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](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

The consolidated balance sheet of Merck & Co., Inc. and subsidiaries as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] 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: 2021,] [added: 2022,] the notes to consolidated financial statements, and the report dated February [removed: 25, 2022] [added: 24, 2023] of PricewaterhouseCoopers LLP, independent registered public accounting firm, are as follows:

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Sales | | | $ | [removed: 48,704] [added: 59,283] | | | | | $ | [removed: 41,518] [added: 48,704] | | | | | $ | [removed: 39,121] [added: 41,518] | |

| Costs, Expenses and Other | | | | | | | | | | | | [removed: | | | | | |]

| Cost of sales | | | [removed: 13,626] [added: 17,411] | | | | | | [removed: 13,618] [added: 13,626] | | | | | | [removed: 12,016] [added: 13,618] | | |

| Selling, general and administrative | | | [removed: 9,634] [added: 10,042] | | | | | | [removed: 8,955] [added: 9,634] | | | | | | [removed: 9,455] [added: 8,955] | | |

| Research and development | | | [removed: 12,245] [added: 13,548] | | | | | | [removed: 13,397] [added: 12,245] | | | | | | [removed: 9,724] [added: 13,397] | | |

| Restructuring costs | | | [removed: 661] [added: 337] | | | | | | [removed: 575] [added: 661] | | | | | | [removed: 626] [added: 575] | | |

| Other (income) expense, net | | | [removed: (1,341)] [added: 1,501] | | | | | | [removed: (890)] [added: (1,341)] | | | | | | [removed: 129] [added: (890)] | | |

| | | | [removed: 34,825] [added: 42,839] | | | | | | [removed: 35,655] [added: 34,825] | | | | | | [removed: 31,950] [added: 35,655] | | |

| Income from Continuing Operations Before Taxes | | | [removed: 13,879] [added: 16,444] | | | | | | [removed: 5,863] [added: 13,879] | | | | | | [removed: 7,171] [added: 5,863] | | |

| Taxes on Income from Continuing Operations | | | [removed: 1,521] [added: 1,918] | | | | | | [removed: 1,340] [added: 1,521] | | | | | | [removed: 1,565] [added: 1,340] | | |

| Net Income from Continuing Operations | | | [removed: 12,358] [added: 14,526] | | | | | | [removed: 4,523] [added: 12,358] | | | | | | [removed: 5,606] [added: 4,523] | | |

| Less: Net Income [removed: (Loss)] Attributable to Noncontrolling Interests | | | [removed: 13] [added: 7] | | | | | | [removed: 4] [added: 13] | | | | | | [removed: (84)] [added: 4] | | |

| Net Income from Continuing Operations Attributable to Merck & Co., Inc. | | | [removed: 12,345] [added: 14,519] | | | | | | [removed: 4,519] [added: 12,345] | | | | | | [removed: 5,690] [added: 4,519] | | |

| Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests | | | [removed: 704] [added: —] | | | | | | [removed: 2,548] [added: 704] | | | | | | [removed: 4,153] [added: 2,548] | | |

| Net Income Attributable to Merck & Co., Inc. | | | $ | [removed: 13,049] [added: 14,519] | | | | | $ | [removed: 7,067] [added: 13,049] | | | | | $ | [removed: 9,843] [added: 7,067] | |

| Income from Continuing Operations | | | $ | [removed: 4.88] [added: 5.73] | | | | | $ | [removed: 1.79] [added: 4.88] | | | | | $ | [removed: 2.22] [added: 1.79] | |

| Income from Discontinued Operations | | | [removed: 0.28] [added: —] | | | | | | [removed: 1.01] [added: 0.28] | | | | | | [removed: 1.62] [added: 1.01] | | |

| Net Income | | | $ | [removed: 5.16] [added: 5.73] | | | | | $ | [removed: 2.79] [added: 5.16] | | | | | $ | [removed: 3.84] [added: 2.79] | |

| Income from Continuing Operations | | | $ | [removed: 4.86] [added: 5.71] | | | | | $ | [removed: 1.78] [added: 4.86] | | | | | $ | [removed: 2.21] [added: 1.78] | |

| Income from Discontinued Operations | | | [removed: 0.28] [added: —] | | | | | | [removed: 1.00] [added: 0.28] | | | | | | [removed: 1.61] [added: 1.00] | | |

| Net Income | | | $ | [removed: 5.14] [added: 5.71] | | | | | $ | [removed: 2.78] [added: 5.14] | | | | | $ | [removed: 3.81] [added: 2.78] | |

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

| Net unrealized [removed: gain] (loss) [added: gain] on derivatives, net of reclassifications | | | [removed: 410] [added: (71)] | | | | | | [removed: (297)] [added: 410] | | | | | | [removed: (135)] [added: (297)] | | |

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

| Benefit plan net gain (loss) and prior service credit (cost), net of amortization | | | [removed: 1,769] [added: 335] | | | | | | [removed: (279)] [added: 1,769] | | | | | | [removed: (705)] [added: (279)] | | |

| Cumulative translation adjustment | | | [removed: (423)] [added: (603)] | | | | | | [removed: 153] [added: (423)] | | | | | | [removed: 96] [added: 153] | | |

| | | | [removed: 1,756] [added: (339)] | | | | | | [removed: (441)] [added: 1,756] | | | | | | [removed: (648)] [added: (441)] | | |

| Comprehensive Income Attributable to Merck & Co., Inc. | | | $ | [removed: 14,805] [added: 14,180] | | | | | $ | [removed: 6,626] [added: 14,805] | | | | | $ | [removed: 9,195] [added: 6,626] | |

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

| | | | [removed: 2021] [added: 2022] | | | | | | [added: 2021 | | | | | |] 2020 | | |

| Cash and cash equivalents | | | $ | [removed: 8,096] [added: 12,694] | | | | | $ | [removed: 8,050] [added: 8,096] | |

| Accounts receivable (net of allowance for doubtful accounts of [removed: $62] [added: $72] in [removed: 2021] [added: 2022] and [removed: $67] [added: $62] in [removed: 2020)] [added: 2021)] | | | [removed: 9,230] [added: 9,450] | | | | | | [removed: 6,803] [added: 9,230] | | |

| Inventories (excludes inventories of [removed: $2,194] [added: $2,938] in [removed: 2021] [added: 2022] and [removed: $2,070] [added: $2,194] in [removed: 2020] [added: 2021] classified in Other assets - see Note 8) | | | [removed: 5,953] [added: 5,911] | | | | | | [removed: 5,554] [added: 5,953] | | |

| Other current assets | | | [removed: 6,987] [added: 7,169] | | | | | | [removed: 4,674] [added: 6,987] | | |

| Total current assets | | | [removed: 30,266] [added: 35,722] | | | | | | [removed: 27,764] [added: 30,266] | | |

| Investments | | | [removed: 370] [added: 1,015] | | | | | | [removed: 785] [added: 370] | | |

| Land | | | [removed: 326] [added: 295] | | | | | | [removed: 336] [added: 326] | | |

| Buildings | | | [removed: 12,529] [added: 13,166] | | | | | | [removed: 11,998] [added: 12,529] | | |

| Short-term investments | | | 498 | | | | | | — | | |

| | | | 39,407 | | | | | | 37,471 | | |

| | | | 21,422 | | | | | | 19,279 | | |

| | | | 102,480 | | | | | | 95,293 | | |

| | | | $ | 109,160 | | | | | $ | 105,694 | |

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

| Balance December 31, 2022 | | | $ | 1,788 | | | | | $ | 44,379 | | | | | $ | 61,081 | | | | | $ | (4,768) | | | | | $ | (56,489) | | | | | $ | 67 | | | | | $ | 46,058 | |

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

goodwill will be recorded.

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

*and BioTerror Countermeasures to the Federal Government for Placement into the Pediatric Vaccine Stockpile or the Strategic National Stockpile*.

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

expensed when the activity has been performed or when the goods have been received rather than when the payment is made.

The Company’s policy for releasing disproportionate income tax effects from *AOCL* is to utilize the item-by-item approach.

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

The Company adopted the new guidance on January 1, 2022 using a modified retrospective approach.

The Company adopted the new guidance on January 1, 2022 on a prospective basis.

The Company adopted the optional guidance on July 1, 2022 on a prospective basis.

*Recently Issued Accounting Standard Not Yet Adopted —* In June 2022, the FASB issued guidance related to the fair value measurement of an equity security subject to contractual restrictions that prohibit the sale of the equity security.

The new guidance also introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value.

Early adoption is permitted for both interim and annual periods.

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

| | | | $ | 704 | | | | | $ | 2,548 | |

Recently Completed Transactions

In February 2023, Merck and Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. (Kelun-Biotech) closed a license and collaboration agreement expanding their relationship in which Merck gained exclusive rights for the research, development, manufacture and commercialization of up to seven investigational preclinical antibody drug conjugates (ADCs) for the treatment of cancer.

Kelun-Biotech retained the right to research, develop, manufacture and commercialize certain licensed and option ADCs for Chinese mainland, Hong Kong and Macau.

Merck will make an upfront payment of $175 million, which will be recorded in *Research and development* expenses in 2023.

In addition, Kelun-Biotech is eligible to receive future contingent development-related payments aggregating up to $1.0 billion, $2.8 billion in regulatory milestones, and $5.5 billion in sales-based milestones if Kelun-Biotech does not retain Chinese mainland, Hong Kong and Macau rights for the option ADCs and all candidates achieve regulatory approval.

In addition, Kelun-Biotech is eligible to receive tiered royalties ranging from a mid-single-digit rate to a low-double-digit rate on future net sales for any commercialized ADC product.

Also, in connection with the agreement, Merck invested $100 million in Kelun-Biotech’s Series B preferred shares in January 2023.

In January 2023, Merck acquired Imago BioSciences, Inc. (Imago), a clinical stage biopharmaceutical company developing new medicines for the treatment of myeloproliferative neoplasms and other bone marrow diseases, for $1.35 billion (including payments to settle share-based equity awards) and also incurred approximately $60 million of transaction costs.

Imago’s lead candidate bomedemstat, MK-3543 (formerly IMG-7289), is an investigational orally available lysine-specific demethylase 1 inhibitor currently being evaluated in multiple Phase 2 clinical trials for the treatment of essential thrombocythemia, myelofibrosis, and polycythemia vera, in addition to other indications.

Merck will record net assets of approximately $200 million and *Research and development* expenses of $1.2 billion in 2023 related to the transaction.

[Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)

2022 Transactions

In October 2022, Merck and Royalty Pharma plc (Royalty Pharma) entered into a funding arrangement under which Royalty Pharma paid Merck $50 million to co-fund Merck’s development costs for a Phase 2b trial of MK-8189, an investigational oral phosphodiesterase 10A (PDE10A) inhibitor, which is being evaluated for the treatment of schizophrenia.

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

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

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

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

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

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

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

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

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

| Balance January 1, 2019 | | | $1,788 | | | | | | $ | 38,808 | | | | | $ | 42,579 | | | | | $ | (5,545) | | | | | $ | (50,929) | | | | | $ | 181 | | | | | $ | 26,882 | |

| Charge for the acquisition of Peloton Therapeutics, Inc. | | | — | | | | | | — | | | | | | 993 | | |

| Acquisition of Antelliq Corporation, net of cash acquired | | | — | | | | | | — | | | | | | (3,620) | | |

| Acquisition of Peloton Therapeutics, Inc., net of cash acquired | | | — | | | | | | — | | | | | | (1,040) | | |

The Company previously had a Healthcare Services segment that provided services and solutions focused on engagement, health analytics and clinical services to improve the value of care delivered to patients.

The Company divested the remaining businesses in this segment during the first quarter of 2020.

or similar investments, minus impairments.

million and $2.6 billion, respectively, at December 31, 2021 and were $208 million and $2.6 billion, respectively, at December 31, 2020.

If such circumstances are determined to exist, an estimate of the undiscounted

If the transaction is accounted for as an acquisition of an asset rather than a business, contingent consideration is not recognized at the acquisition date.

In these instances, product development milestones are recognized upon achievement and sales-based milestones are recognized when the milestone is deemed probable by the Company of being achieved.

The guidance is intended to simplify the accounting for income taxes by removing exceptions related to certain intraperiod tax allocations and deferred tax liabilities; clarifying guidance primarily related to evaluating the step-up tax basis for goodwill in a business combination; and reflecting enacted changes in tax laws or rates in the annual effective tax rate.

In January 2020, the FASB issued new guidance intended to clarify certain interactions between accounting standards related to equity securities, equity method investments and certain derivatives.

The guidance addresses accounting for the transition into and out of the equity method of accounting and measuring certain purchased options and forward contracts to acquire investments.

In August 2020, the FASB issued amended guidance on the accounting for convertible instruments and contracts in an entity’s own equity.

The application of the amendments in the new guidance are to be applied either on a modified retrospective or a retrospective basis.

The optional guidance is effective upon issuance and can be applied on a prospective basis at any time between January 1, 2020 through December 31, 2022.

The Company is currently evaluating the impact of adoption on its consolidated financial statements.

The Company is progressing in its evaluation of LIBOR cessation exposures, including the review of debt-related contracts, leases, business development and licensing arrangements, royalty and other agreements.

The Company has amended certain agreements and continues to review other agreements for potential impacts.

With regard to debt-related exposures in particular, all existing interest rate swaps linked to LIBOR will mature in 2022.

The Company is still evaluating the impact to its LIBOR-based debt.

Based on its evaluation thus far, the Company does not anticipate a material impact to its consolidated financial statements as a result of reference rate reform.

The amended guidance is effective for interim and annual periods in 2023 and is to be applied prospectively.

Early adoption is permitted on a retrospective basis to the beginning of the fiscal year of adoption.

The guidance is effective for annual periods beginning in 2022 and is to be applied on either a prospective or retrospective basis.

The

Prior periods have been recast to reflect this presentation.

As of December 31, 2020, the assets and liabilities associated with these businesses are classified as assets and liabilities of discontinued operations in the consolidated balance sheet.

Details of assets and liabilities of discontinued operations are as follows:

| | | | | | | | | |

For the fourth quarter of [removed: 2021,] [added: 2022,] 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: 2021.][added: 2022.]

Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in *Internal Control — [removed: Integrated*][added: Integrated Framework* issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission.]

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

[removed: Projections of any evaluation of effectiveness to future periods are subject to the risk that controls] may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] 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: *Chief Executive Officer] [added: *Chairman, President] and [removed: President*] [added: Chief Executive Officer*] | | | *Executive Vice President and Chief Financial Officer* | | |

Based on this evaluation, management concluded that internal control over financial reporting was effective as of December 31, 2022.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls

*Framework* issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission.

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

Election of Directors of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 24, 2022.][added: 23, 2023.]

Information on executive officers is set forth in Part I of this document on page [removed: [44](#i1e1e934bfffd457891fb6e33dae50d64_70).][added: [40](#ia384118d157240e09e39541b90e2080f_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: 24, 2022.][added: 23, 2023.]

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: 24, 2022.][added: 23, 2023.]

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, [added: “CEO Pay Ratio,” “Pay vs. Performance” table,] “Grants of Plan-Based Awards” table, “Outstanding Equity Awards” table, “Option Exercises and Stock Vested” table, “Pension Benefits” table, “Nonqualified Deferred Compensation” table, 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: 24, 2022.][added: 23, 2023.]

The required information on director compensation is incorporated by reference from the discussion under the heading “Director Compensation” and related [removed: “2021] [added: “2022] Schedule of Director Fees” table and [removed: “2021] [added: “2022] Director Compensation” table of the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held May [removed: 24, 2022.][added: 23, 2023.]

The required information under the headings “Compensation and Management Development Committee Interlocks and Insider Participation” and “Compensation and 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: 24, 2022.][added: 23, 2023.]

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_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: 24, 2022.][added: 23, 2023.]

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: 2021.][added: 2022.]

*(2)Excludes approximately [removed: 11,790,206] [added: 12,700,042] shares of restricted stock units and [removed: 1,965,983] [added: 1,980,608] performance share units (assuming maximum payouts) under the Merck Sharp & Dohme 2010 and 2019 Incentive Stock Plans.

Also excludes [removed: 193,107] [added: 182,601] shares of phantom stock deferred under the MSD Employee Deferral Program and [removed: 468,633] [added: 487,534] 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)* | | | | | | 13,719,333*(2)* | | | | | | $ | 70.55 | | | | | 86,776,452 | | |

| Total | | | | | | 13,719,333 | | | | | | $ | 70.55 | | | | | 86,776,452 | | |

| 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 | | |

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: 24, 2022.][added: 23, 2023.]

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: 24, 2022.][added: 23, 2023.]

The information required for this item is incorporated by reference from the discussion under Proposal [removed: 3.][added: 4.]

Ratification of Appointment of Independent Registered Public Accounting Firm for [removed: 2022] [added: 2023] 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: 24, 2022.][added: 23, 2023.]

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

Consolidated statement of income for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019][added: 2020]

Consolidated statement of comprehensive income for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019][added: 2020]

Consolidated balance sheet as of December 31, [removed: 2021] [added: 2022] and [removed: 2020][added: 2021]

Consolidated statement of equity for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019][added: 2020]

Consolidated statement of cash flows for the years ended December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019][added: 2020]

[removed: [Table o](#i1e1e934bfffd457891fb6e33dae50d64_7)[f](#i1e1e934bfffd457891fb6e33dae50d64_7) [Contents](#i1e1e934bfffd457891fb6e33dae50d64_7)][added: [Table](#ia384118d157240e09e39541b90e2080f_7) [](#ia384118d157240e09e39541b90e2080f_7)[of](#ia384118d157240e09e39541b90e2080f_7) [Contents](#ia384118d157240e09e39541b90e2080f_7)]

| 3.2 | | | | | | — | | | | | | [By-Laws of Merck & Co., Inc. [removed: (effective July 22, 2015) —] [added: (effective](https://www.sec.gov/Archives/edgar/data/310158/000031015822000006/exhibit31-byxlawsasamended.htm) [March](https://www.sec.gov/Archives/edgar/data/310158/000031015822000006/exhibit31-byxlawsasamended.htm) [22,](https://www.sec.gov/Archives/edgar/data/310158/000031015822000006/exhibit31-byxlawsasamended.htm) [2022)](https://www.sec.gov/Archives/edgar/data/310158/000031015822000006/exhibit31-byxlawsasamended.htm) [—] Incorporated by reference to Merck & Co., Inc.’s Current Report on Form 8-K [removed: filed July 28, 2015 (No. 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015815000048/exhibit32-byxlawsxmerckcoi.htm)] [added: filed](https://www.sec.gov/Archives/edgar/data/310158/000031015822000006/exhibit31-byxlawsasamended.htm) [March 25, 2022](https://www.sec.gov/Archives/edgar/data/310158/000031015822000006/exhibit31-byxlawsasamended.htm) [(No. 1-6571)](https://www.sec.gov/Archives/edgar/data/310158/000031015822000006/exhibit31-byxlawsasamended.htm)] | | |

| *10.4 | | | | | | — | | | | | | [Form of stock option terms for [removed: 2011] [added: 2013] quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Exhibit [removed: 10.2] [added: 10.19] to Merck & Co., Inc.’s Form [removed: 10‑Q Quarterly] [added: 10-K Annual] Report for the [removed: period] [added: fiscal year] ended [removed: March] [added: December] 31, [removed: 2011] [added: 2012] filed [removed: May 9, 2011] [added: February 28, 2013] (No. [removed: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000095012311047041/y90523exv10w2.htm)] [added: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000119312513084618/d438975dex1019.htm)] | | |

| *10.5 | | | | | | — | | | | | | [Form of stock option terms for [removed: 2012] [added: 2014] quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Exhibit [removed: 10.20] [added: 10.18] to Merck & Co., Inc.’s Form [removed: 10‑K] [added: 10-K] Annual Report for the fiscal year ended December 31, [removed: 2011] [added: 2014] filed February [removed: 28, 2012] [added: 27, 2015] (No. [removed: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000119312512084319/d274705dex1020.htm)] [added: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015815000005/ex1018stockoptiontermsfor2.htm)] | | |

| *10.6 | | | | | | — | | | | | | [Form of stock option terms for [removed: 2013] [added: 2015] quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by reference to Exhibit [removed: 10.19] [added: 10.20] to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, [removed: 2012] [added: 2015] filed February [removed: 28, 2013] [added: 26, 2016] (No. [removed: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000119312513084618/d438975dex1019.htm)] [added: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015816000063/ex10202015nqsograntsunderm.htm)] | | |

| [removed: *10.7] [added: *10.9] | | | | | | — | | | | | | [Form of stock option terms for [removed: 2014] [added: 2018] quarterly and annual non-qualified option grants under the Merck & Co., Inc. 2010 Incentive Stock Plan — Incorporated by [removed: reference to] [added: referen](http://www.sec.gov/Archives/edgar/data/310158/000031015818000005/ex1012_2018nqsogranttermsu.htm)[c](http://www.sec.gov/Archives/edgar/data/310158/000031015818000005/ex1012_2018nqsogranttermsu.htm)e [to] Exhibit [removed: 10.18] [added: 10.12] to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, [removed: 2014] [added: 2017] filed February 27, [removed: 2015] [added: 2018] (No. [removed: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015815000005/ex1018stockoptiontermsfor2.htm)] [added: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015818000005/ex1012_2018nqsogranttermsu.htm)] | | |

| [removed: *10.8] [added: *10.19] | | | | | | — | | | | | | [Form of stock option terms for [removed: 2015 quarterly and] [added: 2021] annual non-qualified option grants under the Merck & Co., Inc. [removed: 2010] [added: 2019] Incentive Stock Plan [removed: — Incorporated] [added: -](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm) [Incorporated] by reference to Exhibit [removed: 10.20] [added: 10.23] to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, [removed: 2015] [added: 2020] filed February [removed: 26, 2016] [added: 25, 2021] (No. [removed: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015816000063/ex10202015nqsograntsunderm.htm)] [added: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex1023-2021annualnqsoterms.htm)] | | |

| [removed: *10.9] [added: *10.21] | | | | | | — | | | | | | [Form of stock option terms for [removed: 2018 quarterly and] [added: 2022] annual non-qualified option grants under the Merck & Co., Inc. [removed: 2010] [added: 2019] Incentive Stock [removed: Plan —] [added: Plan](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1024-2022annualnqso.htm) [-] Incorporated by [removed: referent] [added: reference] to Exhibit [removed: 10.12] [added: 10.24] to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, [removed: 2017] [added: 2021] filed February [removed: 27, 2018] [added: 25, 2022] (No. [removed: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015818000005/ex1012_2018nqsogranttermsu.htm)] [added: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1024-2022annualnqso.htm)] | | |

| [removed: *10.11] [added: *10.20] | | | | | | — | | | | | | [Form of restricted stock unit terms for [removed: 2018 quarterly and] [added: 2021] annual grants under the Merck & Co., Inc. [removed: 2010] [added: 2019] Incentive Stock Plan [removed: — Incorporated] [added: -](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm) [Incorporated] by reference to Exhibit [removed: 10.17] [added: 10.24] to Merck & Co., Inc.’s Form 10-K Annual Report for the fiscal year ended December 31, [removed: 2017] [added: 2020] filed [removed: on] February [removed: 28, 2018] [added: 25, 2021] (No. [removed: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015818000005/ex1017_2018restrictedstock.htm)] [added: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015821000004/ex10-24x2021annualrsuterms.htm)] | | |

| [removed: *10.12] [added: *10.22] | | | | | | — | | | | | | [removed: [2018 Performance Share Unit Award Terms] [added: [Form of restricted stock unit terms for 2022 annual grants] under the Merck & Co., Inc. [removed: 2010 Stock] [added: 2019] Incentive [removed: Plan —] [added: Stock Plan](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1025-2022annualrsut.htm) [](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1025-2022annualrsut.htm)[\-] Incorporated by reference to Exhibit [removed: 10] [added: 10.25] to Merck & Co., [removed: Inc.’s Current Report on] [added: Inc.](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1025-2022annualrsut.htm)[’](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1025-2022annualrsut.htm)[s] Form [removed: 10-Q Quarterly] [added: 10-K Annual] Report for the [removed: period] [added: fiscal year] ended [removed: March] [added: December] 31, [removed: 2018] [added: 2021] filed [removed: May 8, 2018] [added: February 25, 2022] (No. [removed: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015818000011/exhibit10psuawardtermsunde.htm)] [added: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1025-2022annualrsut.htm)] | | |

| [removed: *10.13] [added: *10.11] | | | | | | — | | | | | | [Merck & Co., Inc. 2019 Incentive Stock Plan - Incorporated by reference to Appendix C to Merck & Co., Inc.’s Schedule 14A filed April 8, 2019 (No. 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000114036119006720/mrk-def14a_052819.htm) [added: and [to the Registration Statement on Form S-8 filed August 12, 2019 to register 111,000,000 shares under the 2019 Incentive Stock](https://www.sec.gov/Archives/edgar/data/310158/000110465919045319/a19-16979_1s8.htm) [Plan (File No.](https://www.sec.gov/Archives/edgar/data/310158/000110465919045319/a19-16979_1s8.htm) [333-233226)](https://www.sec.gov/Archives/edgar/data/310158/000110465919045319/a19-16979_1s8.htm)] | | |

| [removed: *10.14] [added: *10.12] | | | | | | — | | | | | | [Merck & Co., Inc. Change in Control Separation Benefits Plan (effective as amended and restated, as of January 1, 2013) — Incorporated by reference to Exhibit 10.1 to Merck & Co., Inc.’s Current Report on Form 8‑K filed November 29, 2012 (No. 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000119312512485851/d445500dex101.htm) | | |

| *10.15 | | | | | | — | | | | | | [Merck & Co., Inc. [removed: U.S. Separation Benefits] Plan [removed: (amended] [added: for Deferred Payment of Directors’ Compensation (Amended] and [removed: restated] [added: Restated effective] as of January 1, [removed: 2019) -] [added: 2022)](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1017-planfordeferre.htm) [](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1017-planfordeferre.htm)[\-] Incorporated by reference to Exhibit [removed: 10.19] [added: 10.17] to Merck & Co., [removed: Inc.’s] [added: Inc.](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1017-planfordeferre.htm)[’](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1017-planfordeferre.htm)[s] Form 10-K Annual Report for the fiscal year ended December 31, [removed: 2018 filed February 27, 2019] [added: 2021](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1017-planfordeferre.htm) [filed](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1017-planfordeferre.htm) [February 25, 2022] (No. [removed: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015819000014/ex1019merckusseparationben.htm)] [added: 1-6571)](http://www.sec.gov/Archives/edgar/data/310158/000031015822000003/exhibit1017-planfordeferre.htm)] | | |

| [removed: *10.16] [added: *10.14] | | | | | | — | | | | | | [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: 10.16] | | | | | | — | | | | | | [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: 10.19] [added: 10.17] | | | | | | — | | | | | | [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) | | |