What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2026-02-24 compared with 2025-02-25 · 124 added, 115 removed, 366 unchanged (40% of the section changed)

5 unchanged sentences

• As the Company’s products lose market exclusivity, the Company generally experiences a significant and rapid loss of sales from those products.

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

• The Company’s research and development efforts may not succeed in developing commercially successful products and the Company may not be able to acquire commercially successful products in other ways;

1 unchanged sentence

• The Company’s success is dependent on the successful development and marketing of new products, which are subject to substantial risks.

• The Company faces continued pricing pressure with respect to its products.

• Unfavorable or uncertain economic conditions, together with cost-reduction measures being taken by certain governments, could negatively affect the Company’s operating results.

• The Company faces continued pricing pressure with respect to its products in the public and private sectors.

• Unfavorable or uncertain economic conditions, together with cost-reduction measures being taken by the U.S.

and other countries, could negatively affect the Company’s operating results.

• The Company faces intense competition from both lower cost generic and biosimilar products and competitors’ products.

• The Company has significant global operations, which expose it to additional risks, and any adverse event could have a material adverse effect on the Company’s results of operations and financial condition.

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

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

• Environmental, social and governance matters may impact the Company’s business and reputation.

• Failure to attract and retain highly qualified personnel could affect the Company’s ability to successfully develop and commercialize products.

Table of Content s

• The Company may experience difficulties and delays in manufacturing certain of its products, including vaccines.

• The Company’s business in China has grown in the past few years, and the importance of China to the Company’s overall pharmaceutical and vaccines business has increased accordingly.

In 2024, the Company experienced lower sales of Gardasil/Gardasil 9 in China and expects that sales of Gardasil/Gardasil 9 in China will decline significantly in 2025.

• The Company’s business in China experienced significantly lower sales of Gardasil/Gardasil 9 in 2025 and the Company expects that sales of Gardasil/Gardasil 9 in China will not materially increase in 2026.

As a consequence of the reduced sales of Gardasil/Gardasil 9, the Company’s business in China declined significantly.

• The Company may not be able to realize the expected benefits of its investments in emerging markets.

3 unchanged sentences

• Negative events in the animal health industry could have a material adverse effect on future results of operations and financial condition of the Company or its Animal Health business.

• Biologics and vaccines carry unique risks and uncertainties, which could have a material adverse effect on the Company’s future results of operations and financial condition.

• Biologics and vaccines carry unique risks and uncertainties, which could have a material adverse effect on the Company’s future results of operations, cash flows, financial condition, and prospects.

• The health care industry in the U.S.

has been, and will continue to be, subject to increasing regulation and political action.

• The Company’s products, including products in development, cannot be marketed unless the Company obtains and maintains regulatory approval.

• Developments following regulatory approval may adversely affect sales of the Company’s products.

• The Company’s products, including products in development, cannot be marketed unless the Company obtains and maintains regulatory approval or authorization.

• Developments following regulatory approval or authorization may adversely affect sales of the Company’s products.

• The Company is subject to a variety of U.S.

1 unchanged sentence

• The Company is subject to evolving and complex tax laws, which may result in additional liabilities that may affect results of operations and financial condition.

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

• Adverse outcomes in current or future legal matters could negatively affect the Company’s business.

• Product liability insurance for products may be limited, cost prohibitive or unavailable.

11 unchanged sentences

See “Cautionary Factors that May Affect Future Results” below.

Table of Content s

Risks Related to the Company’s Business

13 unchanged sentences

Patent litigation and other challenges to the Company’s patents are costly and unpredictable and may deprive the Company of market exclusivity for a patented product or, in some cases, third-party patents may prevent the Company from marketing and selling a product in a particular geographic area.

Additionally, certain foreign governments have indicated that compulsory licenses to patents may be granted in the case of national emergencies or in other circumstances, which could diminish or eliminate sales and profits from those regions and negatively affect the Company’s results of operations.

Further, court decisions relating to other companies’ patents, potential legislation in both the U.S.

and certain foreign markets relating to patents, as well as regulatory initiatives may result in a more general weakening of intellectual property protection.

If one or more important products lose patent protection in profitable markets, sales of those products are likely to decline significantly as a result of generic versions of those products becoming available.

The Company’s results of operations may be adversely affected by the lost sales unless and until the Company has launched commercially successful products that replace the lost sales.

certain foreign markets relating to patents, as well as regulatory initiatives may result in a more general weakening of intellectual property protection.

If one or more important products lose patent protection in profitable markets, sales of those products are likely to decline significantly as a result of generic or biosimilar versions of those products becoming available.

The Company’s business, cash flows, results of operations, financial position, and prospects may be adversely affected by the lost sales unless and until the Company has launched commercially successful products that replace the lost sales.

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

4 unchanged sentences

The Company depends upon patents to provide it with exclusive marketing rights for its products for some period of time.

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

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

In the case of products that contribute significantly to the Company’s sales, the loss of market exclusivity can have a material adverse effect on the Company’s business, cash flows, results of operations, financial condition and prospects.

The Company lost market exclusivity for Bridion in Europe and Japan in 2023 and 2024, respectively, and the Company has experienced a substantial decline in Bridion sales in those markets.

Bridion will lose market exclusivity in the U.S.

in 2026 (subject to patent litigation discussed below) and the Company expects that sales of Bridion in the U.S.

will decline substantially thereafter.

In addition, the Company expects U.S.

sales of Keytruda to decline beginning in January 2028 upon implementation of government pricing under the IRA, and to further decline upon loss of market exclusivity following expiration of the U.S.

compound patent in December 2028.

The Company expects to lose market exclusivity in Europe for Keytruda in 2031 following compound patent expiration.

in July 2026 at which time the Company anticipates a significant and rapid decline in U.S.

sales of Bridion .

The Company expects to discontinue U.S.

sales of Bridion by the end of 2026.

In addition, Januvia and Janumet will lose market exclusivity in the U.S.

in May 2026 and Janumet XR will lose market exclusivity in the U.S.

in July 2026.

The Company expects a significant decline in sales of Januvia in the first half of 2026 reflecting the impact of government price setting noted above and subsequently, following loss of market exclusivity in May 2026, the Company anticipates it will lose nearly all U.S.

sales of Januvia and Janumet .

Also, the Company expects that sales of Keytruda will be materially negatively impacted by biosimilar competition between 2028 and 2029.

As previously disclosed, while two patents in the Keytruda composition of matter patent family expire in May and November of 2029, respectively, the Company expects these patents to be the subject of litigation and, thus, biosimilar competition could begin in December 2028 when the primary compound patent expires.

The Company also expects to lose market exclusivity in Europe for Keytruda in 2031 following compound patent expiration.

There may, however, be attempts by one or more companies to challenge the patent or launch a biosimilar product despite the patent in some European jurisdictions following the expiration of data exclusivity in Europe in July 2026.

Table of Content s

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

The Company’s ability to generate profits and operating cash flows depends largely upon the continued profitability of the Company’s key products, such as Keytruda , Gardasil/Gardasil 9, Lynparza, Bravecto , and Bridion .

In 2024, the Company’s oncology portfolio, led by Keytruda , represented substantially all of the Company’s revenue growth.

In particular, in the aggregate, in 2025, sales of Keytruda represented 49% of the Company’s total sales.

As a result of the Company’s dependence on key products, any event that adversely affects any of these products or the markets for any of these products, such as the slowing demand for Gardasil/Gardasil 9 in China which the Company has experienced, could have a significant adverse impact on results of operations and financial condition.

Other events could include loss of patent protection, increased costs associated with manufacturing, generic or over-the-counter availability of the Company’s product or a competitive product, the discovery of previously unknown side effects, results of post-approval trials, increased competition from the introduction of new, more effective treatments and discontinuation or removal from the market of the product for any reason.

As a result of the Company’s dependence on key products, any event that adversely affects any of these products or the markets for any of these products, such as the materially lower demand for Gardasil/Gardasil 9 in China which the Company has experienced, could have a significant adverse impact on results of operations, cash flows, financial condition, and prospects.

Other events could include loss of patent protection, selection for IRA price setting, lower than expected utilization of Keytruda Qlex , increased costs associated with manufacturing, generic, biosimilar or over-the-counter availability of the Company’s product or a competitive product, the discovery of previously unknown side effects, results of post-approval trials, increased competition from the introduction of new, more effective treatments and discontinuation or removal from the market of the product for any reason.

Such events could have a material adverse effect on the sales of any such products.

2 unchanged sentences

In order to remain competitive, the Company, like other major pharmaceutical companies, must continue to launch new products.

Expected declines in sales of products after the loss of market exclusivity mean that the Company’s future success is dependent on its pipeline of new products, including new products that it may develop through collaborations and joint ventures and products that it is able to obtain through license or acquisition.

through collaborations and joint ventures and products that it is able to obtain through license or acquisition.

To accomplish this, the Company commits substantial effort, funds and other resources to research and development, both through its own dedicated resources and through various collaborations with third parties.

6 unchanged sentences

Each phase of testing is highly regulated and during each phase there is a substantial risk that the Company will encounter serious obstacles or will not achieve its goals.

Therefore, the Company may abandon a product in which it has invested substantial amounts of time and resources.

Therefore, the Company may abandon a product candidate or use in which it has invested substantial amounts of time and resources.

Some of the risks encountered in the research and development process include the following:

13 unchanged sentences

The Company’s success is dependent on the successful development and marketing of new products, which are subject to substantial risks.

Products that appear promising in development may fail to reach the market or fail to succeed for numerous reasons, including the following:

Product candidates or uses that appear promising in development may fail to reach the market or fail to succeed for numerous reasons, including the following:

• findings of ineffectiveness, superior safety or efficacy of competing products, or harmful side effects in clinical or preclinical testing;

Table of Content s

• failure to receive the necessary regulatory approvals, including delays in the approval of new products and new indications, or the anticipated labeling, and uncertainties about the time required to obtain regulatory approvals and the benefit/risk standards applied by regulatory agencies in determining whether to grant approvals;

• failure in certain markets to obtain reimbursement commensurate with the level of innovation and clinical benefit presented by the product;

• changes in clinical preferences or standards of care, including competitor innovations, that diminish the value of the product;

• lack of economic feasibility due to manufacturing costs or other factors;

2 unchanged sentences

Failure to successfully develop and market new products in the short term or long term would have a material adverse effect on the Company’s business, results of operations, cash flows, financial condition and prospects.

The Company faces continued pricing pressure with respect to its products.

The Company faces continued pricing pressure globally and, particularly in mature markets, from managed care organizations, government agencies and programs that could negatively affect the Company’s sales and profit margins.

The Company faces continued pricing pressure with respect to its products in the public and private sectors.

and profit margins.

In the U.S., these include (i) U.S.

2 unchanged sentences

As noted in Item 1.

“Competition and the Health Care Environment,” in 2023, HHS selected Januvia for the first year of the IRA’s price setting program, which will result in a government set price becoming effective on January 1, 2026.

Government price setting may also impact pricing in the private market, negatively affecting the Company’s performance.

In January 2025, HHS announced that Janumet and Janumet XR have been selected for government price setting, which will become effective on January 1, 2027.

“Competition and the Health Care Environment,” in 2023, HHS selected Januvia for the first year of the IRA’s price setting program, which resulted in a government set price becoming effective on January 1, 2026.

In 2025, HHS selected Janumet and Janumet XR for government price setting, which will become effective on January 1, 2027.

In addition, in January 2026, HHS announced that Lenvima has been selected for government price setting, the set price for which will become effective on January 1, 2028.

Furthermore, the Company expects that in 2027 HHS will include Keytruda in a subsequent selection of products to undergo IRA price setting, with such price to become effective on January 1, 2029 and the Company expects that, as a result, U.S.

sales of Keytruda will decline after that time.

sales of Keytruda will decline materially after that time.

Government price setting may also impact pricing in the private market, negatively affecting the Company’s performance.

Also, as noted above, in December 2025, the Company entered into the MFN Agreement with the U.S.

government pursuant to which the Company will provide key products through a direct-to-patient program at affordable prices for eligible patients in the U.S.

This currently includes Januvia , Janumet , and Janumet XR , and will be expanded in the future to include enlicitide decanoate pending FDA approval.

The Company also agreed to offer its existing medicines at discounted prices to Medicaid, excluding certain products.

In addition, the Company has agreed that products launched during the term of the MFN Agreement (with certain exceptions) will be subject to “most-favored-nation” pricing in reference to prices for such products in the MFN Countries.

In addition, in the U.S., larger customers have received higher rebates on drugs in certain highly competitive categories.

2 unchanged sentences

The Company is also facing pricing pressure from purchasers of certain vaccines in highly competitive categories.

Also, the Company expects that U.S.

states will continue their focus on pharmaceutical pricing and may shift to more aggressive price control tools.

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

3 unchanged sentences

The Company expects pricing pressures to continue in the future.

Unfavorable or uncertain economic conditions, together with cost-reduction measures being taken by certain governments, could negatively affect the Company’s operating results.

Unfavorable or uncertain economic conditions, together with cost-reduction measures being taken by the U.S.

and other countries, could negatively affect the Company’s operating results.

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

Uncertainty in global economic and geopolitical conditions may result in a slowdown to the global economy that could affect the Company’s business by reducing the prices that drug wholesalers and retailers, hospitals, government agencies and managed health care providers may be able or willing to pay for the Company’s products or by reducing the demand for the Company’s products, which could in turn negatively impact the Company’s sales and result in a material adverse effect on the Company’s business, cash flows, results of operations, financial condition and prospects.

Table of Content s

As discussed above in Item 1.

5 unchanged sentences

The Company anticipates all of these actions, and additional actions in the future, will continue to negatively affect sales and profits.

In addition, it is possible that as a consequence of the MFN Agreement, certain of the Company’s products may not be launched in the MFN Countries or their launch may be delayed and as a result, the MFN Countries may take actions that adversely impact the Company.

If credit and economic conditions worsen, the resulting economic and currency impacts in the affected markets and globally could have a material adverse effect on the Company’s results.

5 unchanged sentences

and the EU, political pressure to reduce spending on prescription drugs has led to legislation and other measures that encourage the use of generic and biosimilar products.

Although it is the Company’s policy to actively protect its patent rights, generic challenges to the Company’s products can arise at any time, and the Company’s patents may not prevent the emergence of generic competition for its products.

Although it is the Company’s policy to actively protect its patent rights, challenges to the Company’s products can arise at any time, and the Company’s patents may not prevent the emergence of generic or biosimilar competition for its products.

Loss of patent protection for a product typically is followed promptly by generic or biosimilar substitutes, reducing the Company’s sales of that product.

Availability of generic substitutes for the Company’s drugs may adversely affect its results of operations and cash flows.

Availability of generic or biosimilar substitutes for the Company’s drugs may adversely affect its results of operations and cash flows.

In addition, proposals emerge from time to time in the U.S.

and other countries for legislation to further encourage the early and rapid approval of generic drugs.

Any such proposal that is enacted into law could worsen this substantial negative effect on the Company’s sales, business, cash flows, results of operations, financial condition and prospects.

and other countries for legislation to further encourage the early and rapid approval of generic or biosimilar drugs.

Any such proposal that is enacted into law could worsen this substantial negative effect on the Company’s business, cash flows, results of operations, financial condition and prospects.

Also, the Company’s products face intense competition from competitors’ products.

1 unchanged sentence

In such an event, the competitors’ products may be safer or more effective, more convenient to use, have better insurance coverage or reimbursement levels or be more effectively marketed and sold than the Company’s products.

Alternatively, in the case of generic competition, including the generic availability of competitors’ branded products, they may be equally safe and effective products that are sold at a substantially lower price than the Company’s products.

Alternatively, in the case of generic or biosimilar competition, including the generic or biosimilar availability of competitors’ branded products, they may be equally safe and effective products that are sold at a substantially lower price than the Company’s products.

As a result, if the Company fails to maintain its competitive position, this could have a material adverse effect on its business, cash flows, results of operations, financial condition and prospects.

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.

The Company has significant global operations, which expose it to additional risks, and any adverse event could have a material adverse effect on the Company’s results of operations and financial condition.

The extent of the Company’s operations outside the U.S.

5 unchanged sentences

or other governments;

• the imposition of tariffs by the U.S.

or other governments;

• foreign exchange fluctuations;

1 unchanged sentence

• possible nationalization and expropriation.

government has announced plans to significantly increase tariffs on foreign imports into the U.S., particularly from Canada and Mexico and has already increased tariffs on imports from China.

It is too early for the

Table of Content s

Company to assess if, or to what extent, such policies will be implemented or continue to be implemented, and the extent of any measures that have been or will be taken by any impacted countries.

In addition, there may be changes to the Company’s business if there is instability, disruption or destruction in a significant geographic region, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest;

and natural or man-made disasters, including famine, flood, fire, earthquake, storm or disease.

Events like these, such as the ongoing war between Russia and Ukraine, and the conflict in the Middle East, and/or policy changes with respect to international trade protection measures, could result in material adverse effects on macroeconomic conditions, currency exchange rates and financial markets, and may adversely affect the Company’s business, results of operations, cash flows and financial condition.

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

Events like these, such as the ongoing war between Russia and Ukraine, and conflict in the Middle East, and/or policy changes with respect to international trade protection measures, could result in material adverse effects on

macroeconomic conditions, currency exchange rates and financial markets, and may adversely affect the Company’s business, results of operations, cash flows, financial condition, and prospects.

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

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

6 unchanged sentences

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

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

These regulations, which may differ across jurisdictions, could result in the Company being subject to new or expanded carbon pricing or taxes, increased compliance costs, restrictions on GHG emissions, investment in new technologies, increased GHG emission disclosure (including costs resulting from mandatory or voluntary reporting, diligence or disclosure) and transparency, recurring 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 Company, which may affect the Company’s ability to procure raw materials or other supplies required for the operation of the Company’s business at the quantities and levels required.

New legal and regulatory requirements with respect to climate-related matters, which may differ across jurisdictions, could result in the Company being subject to increased compliance burdens and costs to meet these obligations.

The Company’s supply chain would likely be subject to similar risks and would likely pass along any increased costs to the Company, which may affect the Company’s ability to procure raw materials or other supplies required for the operation of the Company’s business at the quantities and levels required.

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

5 unchanged sentences

In addition, some governmental authorities, non-governmental organizations, and stakeholders may disagree with the Company’s goals and initiatives.

If the Company does not meet the evolving and varied regulatory requirements and expectations of its investors, customers and other stakeholders, the Company could experience negative impacts to the Company’s business and results of operations.

In addition, the Company is subject to expanding mandatory and voluntary reporting, diligence and disclosure requirements, including the EU’s Corporate

Table of Content s

Sustainability Reporting Directive (CSRD) and potentially the SEC’s climate-related reporting requirements (which are currently stayed), the legislation in California requiring reporting of GHG emissions and climate risk, and similar regulatory requirements in other jurisdictions outside the U.S.

These evolving regulatory requirements are likely to result in increased costs and complexities of compliance in order to collect, measure and report on the relevant information.

If the Company does not meet the rapidly evolving and varied regulatory requirements and expectations of its investors, customers and other stakeholders, the Company could experience negative impacts to the Company’s business and results of operations.

In addition, the Company is subject to evolving mandatory and voluntary reporting, diligence and disclosure requirements, including the EU’s Corporate Sustainability Reporting Directive (CSRD) and potentially the SEC’s climate-related reporting requirements (which are currently stayed), the legislation in California requiring reporting of GHG emissions (which is currently subject to legal challenge) and climate risk (which is currently stayed pending appeal), and similar regulatory requirements in other jurisdictions outside the U.S.

These evolving regulatory requirements may result in increased costs and complexities of compliance in order to collect, measure and report on the relevant information, and could expose the Company to the risk of government enforcement actions and private litigation.

Failure to attract and retain highly qualified personnel could affect the Company’s ability to successfully develop and commercialize products.

2 unchanged sentences

and internationally, is intense.

The Company cannot be sure that it will be able to attract and retain qualified personnel or that the costs of doing so will not materially increase.

The Company cannot be certain that it will be able to attract and retain qualified personnel or that the costs of doing so will not materially increase.

The Company may experience difficulties and delays in manufacturing certain of its products, including vaccines.

Merck from time to time experiences difficulties in manufacturing certain of its products, including vaccines.

For example, the Company is currently experiencing manufacturing delays related to Varivax and ProQuad which will result in supply constraints in 2025.

The Company may, in the future, experience other difficulties and delays in manufacturing its products, such as (i) failure of the Company or any of its vendors or suppliers to comply with Current Good Manufacturing Practices and other applicable regulations and quality assurance guidelines that could lead to manufacturing shutdowns, product shortages and delays in product manufacturing;

3 unchanged sentences

Manufacturing difficulties can result in product shortages, leading to lost sales and reputational harm to the Company.

The Company’s business in China has grown in the past few years, and the importance of China to the Company’s overall pharmaceutical and vaccines business has increased accordingly.

In 2024, the Company experienced lower sales of Gardasil/Gardasil 9 in China and expects that sales of Gardasil/Gardasil 9 in China will decline significantly in 2025.

The Company’s business in China has grown in the past few years, and the importance of China to the Company’s overall pharmaceutical and vaccines business has increased accordingly.

Beginning in mid-2024, the Company observed a significant decline in shipments from its distributor and commercialization partner in China, Chongqing Zhifei Biological Products Co., Ltd.

(Zhifei), to disease and control prevention institutions and correspondingly into the points of vaccination, resulting in above normal inventory levels at Zhifei.

Accordingly, the Company shipped less than its contracted doses to Zhifei in the latter part of 2024.

Lower demand in China persisted and, at the end of 2024, overall channel inventory levels in China remained elevated at above normal levels.

Therefore, the Company made a decision to temporarily pause shipments to China beginning in February 2025 through at least the middle of the year and as a result, combined sales of G ardasil/Gardasil 9 will decline significantly in 2025 compared with 2024.

The Company’s business in China experienced significantly lower sales of Gardasil/Gardasil 9 in 2025 and the Company expects that sales of Gardasil/Gardasil 9 in China will not materially increase in 2026.

As a consequence of the reduced sales of Gardasil/Gardasil 9 , the Company’s business in China declined significantly.

The Company’s business in China experienced significantly lower sales of Gardasil/Gardasil 9 in 2025.

Due to above normal inventory levels at the Company’s commercialization partner in China, the Company made a decision to pause shipments to China beginning in February 2025 and has not resumed shipments to date.

The Company will not resume shipments until inventory levels return to normal levels and it cannot predict when shipments to China will resume nor the levels of sales that the Company will achieve and as a result, the Company expects that sales of Gardasil/Gardasil 9 in China will not materially increase in 2026.

In June 2025, a nine-valent HPV vaccine produced by a local manufacturer received regulatory approval in China for use in females 9-45 years of age.

Furthermore, the government's anti-corruption campaign, particularly the increased number of inspections and audits, could substantially increase the administrative burden on health care institutions and health care professionals throughout the whole industry in China and potentially have a negative impact on the Company's sales.

1 unchanged sentence

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 flows, results of operations, financial condition and prospects.

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.

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

As noted above in Item 1.

1 unchanged sentence

While the mechanism for drugs being added to the NRDL evolves, inclusion may require a price negotiation which could impact the outlook in the market for selected brands.

Table of Content s

new NRDL was recently completed in which new entries averaged 63% price reductions.

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

While pricing pressure has always existed in China, health care reform has increased this pressure in part due to the acceleration of generic substitution through the government’s VBP program.

In 2019, the government implemented the VBP program through a tendering process for mature products which have generic substitutes with a Generic Quality Consistency Evaluation approval.

Mature products that have entered into the last five rounds of VBP had, on average, a price reduction of more than 50%.

The Company expects VBP to be a semi-annual process that will have a significant impact on mature products moving forward.

The government has implemented the VBP program through a tendering process for mature products which have generic substitutes with a Generic Quality Consistency Evaluation approval.

Mature products that have entered into the latest rounds of VBP had, on average, a price reduction of more than 50%.

The Company expects that the VBP process will have a significant impact on mature products moving forward.

The Company may not be able to realize the expected benefits of its investments in emerging markets.

20 unchanged sentences

Failure of these third parties to meet their contractual, regulatory and other obligations to the Company or the development of factors that materially disrupt the relationships between the Company and these third parties could have a material adverse effect on the Company’s business.

Table of Content s

Negative events in the animal health industry could have a material adverse effect on future results of operations and financial condition of the Company or its Animal Health business.

3 unchanged sentences

Other risks specific to animal health include epidemics and pandemics affecting livestock, government procurement and pricing practices, weather and global agribusiness economic events.

In addition, in 2024, sales of Bravecto were $1.1 billion, which represented 19% of the Company’s Animal Health segment sales.

Any negative event with respect to Bravecto could have a material adverse effect on the Company’s Animal Health sales.

In addition, in 2025, sales of the Bravecto family of products were

$1.1 billion, which represented 18% of the Company’s Animal Health segment sales.

Any negative event with respect to the Bravecto family of products could have a material adverse effect on the Company’s Animal Health sales.

If the Animal Health segment of the Company’s business becomes more significant, the impact of any such events on future results of operations could also become more significant.

Biologics and vaccines carry unique risks and uncertainties, which could have a material adverse effect on the Company’s future results of operations and financial condition.

Biologics and vaccines carry unique risks and uncertainties, which could have a material adverse effect on the Company’s future results of operations, cash flows, financial condition, and prospects.

The successful development, testing, manufacturing and commercialization of biologics and vaccines, particularly human and animal health vaccines, is a long, complex, expensive and uncertain process.

6 unchanged sentences

These regulations are often more complex and extensive than the regulations applicable to other pharmaceutical products.

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

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

• Manufacturing biologics and vaccines, especially in large quantities, is complex and may require the use of innovative technologies to handle living micro-organisms.

7 unchanged sentences

Any of these events could result in substantial costs.

Table of Content s

• Biologics and vaccines require long manufacturing lead times, sometimes requiring planning years in advance of demand, which could increase the risk of inventory write-downs if that demand does not materialize.

Risks Relating to Government Regulation and Legal Proceedings

3 unchanged sentences

“Competition and the Health Care Environment,” the Company believes that the health care industry will continue to be subject to increasing regulation as well as political and legal action, as future proposals to reform the health care system are considered by the Executive Branch, Congress and state legislatures.

In 2022, Congress passed the IRA, which makes significant changes to how drugs are covered and paid for under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, which has taken effect in 2025, and government price setting for certain Medicare Part D drugs, starting in 2026, and Medicare Part B drugs starting in 2028.

In 2022, Congress passed the IRA, which made significant changes to how drugs are covered and paid for under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, which has taken effect in 2025, and government price setting for certain Medicare Part D drugs,

starting in 2026, and Medicare Part B drugs starting in 2028.

Furthermore, government price setting may also impact pricing in the private market, negatively affecting the Company’s performance.

As noted in Item 1.

On January 17, 2025, HHS announced that Janumet and Janumet XR have been selected for government price setting, which will become effective on January 1, 2027.

In 2025, HHS selected Janumet and Janumet XR for government price setting, the set price for which will become effective on January 1, 2027.

In addition, in January 2026, HHS announced that Lenvima has been selected for government price setting, the set price for which will become effective on January 1, 2028.

sales of Keytruda will decline after that time.

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

sales of Keytruda will decline materially after that time.

In addition, in 2021, Congress passed the American Rescue Plan Act, which included a provision that eliminated the statutory cap on rebates drug manufacturers pay to Medicaid.

These rebates act as a discount off the list price and eliminating the cap means that manufacturer discounts paid to Medicaid can increase.

4 unchanged sentences

Also, t he Company expects that states will continue their focus on pharmaceutical pricing and will increasingly shift to more aggressive price control tools such as Prescription Drug Affordability Boards that have the authority to conduct affordability reviews and establish upper payment limits and that Company products may be selected for such reviews.

In the U.S., members of the government have made public statements in favor of, and may take steps to implement, various regulatory changes that could negatively impact the pharmaceutical industry, including the Company.

Those potential changes include some related to vaccines and vaccine development, as well as personnel and policy changes at the FDA and other government agencies and programs.

For example, HHS could undergo changes that could make it more difficult for the FDA to grant regulatory approvals for drugs and vaccines and the U.S.

Centers for Disease Control and Prevention (CDC) to issue or maintain recommendations for vaccines.

In the U.S., members of the government have made public statements in favor of, and may take steps to implement, various regulatory or policy changes that could negatively impact the pharmaceutical industry, including the Company.

Those potential changes include some related to vaccines and vaccine development, as well as personnel and policy changes at the FDA and other government agencies, committees, and programs.

For example, HHS could undergo changes that could make it more difficult for the FDA to grant regulatory approvals for drugs and vaccines.

Additionally, if the FDA drug user fee programs were eliminated, that could cause significant delays to facility inspections and approvals of new products.

It is too early for the Company to assess which, if any, of the policy changes that have been publicly referenced would be implemented, and the Company cannot predict what additional future changes in the health care industry in general, or the pharmaceutical industry in particular, will occur;

Changes could also impact the CDC, including how recommendations for immunizations are issued and maintained.

Changes that have been made to the CDC’s recommended immunization schedule which could impact public and private coverage, as well as reduction in state-controlled school immunization requirements, could cause a decline in vaccine uptake.

Alterations to the National Vaccine Injury Compensation Program also could impact how claims against vaccine manufacturers are adjudicated.

The government also has discussed certain policy changes to facilitate market entry of biosimilar products.

It is too early for the Company to assess which, if any, of the regulatory or policy changes that have been publicly referenced would be implemented or how they would impact the market, and the Company cannot predict what additional future changes in the health care industry in general, or the pharmaceutical industry in particular, will occur;

however, any changes could have a material adverse effect on the Company’s business, cash flows, results of operations, financial condition and prospects.

The Company’s products, including products in development, cannot be marketed unless the Company obtains and maintains regulatory approval.

The Company’s products, including products in development, cannot be marketed unless the Company obtains and maintains regulatory approval or authorization.

The Company’s activities, including research, preclinical testing, clinical trials and the manufacturing and marketing of its products, are subject to extensive regulation by numerous federal, state and local governmental authorities in the U.S., including the FDA, and by foreign regulatory authorities, including in the EU, Japan and China.

4 unchanged sentences

The FDA and foreign regulatory authorities, including in the EU, Japan and China, have substantial discretion to require additional testing, to delay or withhold registration and marketing approval and to otherwise preclude distribution and sale of a product.

Table of Content s

Even if the Company is successful in developing new products, it will not be able to market any of those products unless and until it has obtained all required regulatory approvals (which in limited circumstances may include authorizations for emergency use) in each jurisdiction where it proposes to market the new products.

Once obtained, the Company must maintain approval as long as it plans to market its new products in each jurisdiction where approval is required.

The Company’s failure to obtain approval, significant delays in the approval process, or its failure to maintain approval in any jurisdiction will prevent it from selling the products in that jurisdiction and realizing sales.

Developments following regulatory approval may adversely affect sales of the Company’s products.

The Company’s failure to obtain approval, significant delays in the approval process, or its

failure to maintain approval in any jurisdiction will prevent it from selling the products in that jurisdiction and realizing sales.

Developments following regulatory approval or authorization may adversely affect sales of the Company’s products.

Even after a product reaches the market, certain developments following regulatory approval may decrease demand for the Company’s products, including the following:

• results in post-approval Phase 4 trials or other studies;

• the re-review of products that are already marketed;

• the re-review of products or indications that are already marketed;

• the recall or loss of marketing approval of products that are already marketed;

9 unchanged sentences

If previously unknown side effects are discovered or if there is an increase in negative publicity regarding known side effects of any of the Company’s products, it could significantly reduce demand for the product or require the Company to take actions that could negatively affect sales, including removing the product from the market, restricting its distribution or applying for labeling changes.

Similarly, new information that becomes available about products from other manufacturers may prompt new regulatory reviews of the Company’s products, leading to actions that could negatively affect sales.

Further, in the environment in which all pharmaceutical companies operate, the Company is at risk for product liability and consumer protection claims and civil and criminal governmental actions related to its products, research and/or marketing activities.

16 unchanged sentences

and (x) the potential impact of importation restrictions, embargoes, trade sanctions and legislative and/or other regulatory changes.

Table of Content s

The Company is subject to evolving and complex tax laws, which may result in additional liabilities that may affect results of operations and financial condition.

The Company is subject to evolving and complex tax laws in the jurisdictions in which it operates.

Significant judgment is required for determining the Company’s tax liabilities, and the Company’s tax returns are routinely examined by various tax authorities.

Significant judgment is required for determining the Company’s tax liabilities, and the Company’s tax returns are

routinely examined by various tax authorities.

The Internal Revenue Service (IRS) is currently conducting examinations of the Company’s tax returns for the years 2017 and 2018, including the one-time transition tax enacted under the Tax Cuts and Jobs Act of 2017 (TCJA).

If the IRS disagrees with the Company’s transition tax position, it may result in a significant tax liability.

If the IRS’ challenge to the Company’s transition tax position is ultimately successful, the impact could be material to the Company’s cash flows, results of operations and financial condition.

The IRS is also currently conducting examinations of the Company’s tax returns for the years 2021 and 2022.

10 unchanged sentences

federal income tax liabilities for the Company and its shareholders.

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

Current or future litigation, claims, proceedings and government investigations could preclude or delay the commercialization of Merck’s products or could adversely affect Merck’s business, results of operations, cash flows, financial condition and prospects.

Adverse outcomes in current or future legal matters could negatively affect the Company’s business.

Current or future litigation, claims, proceedings and government investigations could preclude or delay the commercialization of the Company’s products or could adversely affect the Company’s business, results of operations, cash flows, financial condition and prospects.

Such legal matters may include, but are not limited to:

17 unchanged sentences

however, there can be no guarantee that insurance coverage will be obtained or, if obtained, will be sufficient to fully cover product liabilities that may arise.

Table of Content s

Risks Related to Technology

6 unchanged sentences

Misuse of any of these IT systems could result in the disclosure of sensitive personal information or the theft of trade secrets, intellectual property, or other confidential business information.

The Company continues to leverage new and innovative technologies across the enterprise to replace outmoded technology and improve the efficacy and efficiency of its business processes, including data acquisition, the use of which can create new risks.

The Company continues to leverage new and innovative technologies across the enterprise to replace outmoded technology and is beginning a multi-year system upgrade of its SAP system and is working to improve the efficacy and efficiency of its business processes, including data acquisition, the use of which can create new risks.

In addition, the Company’s Animal Health business sells technology products that, when deployed, could potentially be compromised by a third party and cause disruption both internally and externally.

6 unchanged sentences

Flaws, biases, or malfunctions in these systems could lead to operational disruptions, data loss, or erroneous decision-making, impacting the Company’s business operations, financial condition, and reputation.

Ethical and legal challenges may arise, including biases or discrimination in AI outcomes, non-compliance with data protection regulations and laws specifically governing the use of AI systems and tools, and lack of transparency.

Ethical and legal challenges may arise, including biases or discrimination in AI outcomes, non-compliance with data protection regulations and emerging laws specifically governing AI systems and tools, such as the European Union AI Act and NIS2 Directive.

Unauthorized use of open-source AI tools or generative AI platforms by employees or third parties could result in inadvertent disclosure of confidential information, intellectual property leakage, or regulatory violations.

Furthermore, the deployment of AI systems could expose the Company to increased cybersecurity threats, such as data breaches and unauthorized access leading to financial losses, legal liabilities, and reputational damage.

6 unchanged sentences

Identifying potential new points of unauthorized entry as new communication tools expand also presents new challenges.

Table of Content s

Cautionary Factors that May Affect Future Results

3 unchanged sentences

One can also identify them by the fact that they do not relate strictly to historical or current facts.

These statements are likely to address the Company’s growth strategy, financial results, product approvals, product potential, development programs, environmental or other sustainability initiatives.

These statements are likely to address the Company’s growth strategy, financial results, product approvals, product potential, and development programs.

One must carefully consider any such statement and should understand that many factors could cause actual results to differ materially from the Company’s forward-looking statements.

6 unchanged sentences

• Increased “brand” competition in therapeutic areas important to the Company’s long-term business performance.

• The difficulties and uncertainties inherent in new product development.

The outcome of the lengthy and complex process of new product development is inherently uncertain.

• The difficulties and uncertainties inherent in development of new product candidates or uses.

The outcome of the lengthy and complex process of development of new product candidates and uses is inherently uncertain.

A drug candidate can fail at any stage of the process and one or more late-stage product candidates could fail to receive regulatory approval.

New product candidates may appear promising in development but fail to reach the market because of efficacy or safety concerns, the inability to obtain necessary regulatory approvals, the difficulty or excessive cost to manufacture and/or the infringement of patents or intellectual property rights of others.

New product candidates or uses may appear promising in development but fail to reach the market because of efficacy or safety concerns, the inability to obtain necessary regulatory approvals, the difficulty or excessive cost to manufacture and/or the infringement of patents or intellectual property rights of others.

Furthermore, the sales of new products may prove to be disappointing and fail to reach anticipated levels.

• Pricing pressures, both in the U.S.

• Pricing pressures in the public and private sectors, both in the U.S.

and abroad, including rules and practices of managed care groups, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and health care reform, pharmaceutical reimbursement and pricing in general.

10 unchanged sentences

• Changes in accounting pronouncements promulgated by standard-setting or regulatory bodies, including the Financial Accounting Standards Board and the SEC, that are adverse to the Company.

Table of Content s

• Economic factors over which the Company has no control, including changes in inflation, interest rates and foreign currency exchange rates.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors