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Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Effect of Net Investment Hedges
The effects of the Company’s net investment hedges on OCI and the Consolidated Statement of Income are shown below:
Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income (1)
Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing
Years Ended December 31202220212020202220212020
Net Investment Hedging Relationships
Foreign exchange contracts$(48)$(49)$26 $(1)$(13)$(19)
Euro-denominated notes(162)(296)385 — — — 
(1)    No amounts were reclassified from AOCL into income related to the sale of a subsidiary.
Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position
The table below presents the location of amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges as of December 31:
Carrying Amount of Hedged LiabilitiesCumulative Amount of Fair Value Hedging Adjustment Increase Included in the Carrying Amount
2022202120222021
Balance Sheet Line Item in which Hedged Item is Included
Loans payable and current portion of long-term debt$— $2,263 $— $13 
Fair Value of Derivatives on a Gross Basis Segregated Between those Derivatives that are Designated as Hedging Instruments and those that are Not Designated as Hedging Instruments
Presented in the table below is the fair value of derivatives on a gross basis segregated between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments as of December 31:
  20222021
  Fair Value of
Derivative		U.S. Dollar
Notional		Fair Value of
Derivative		U.S. Dollar
Notional
 AssetLiabilityAssetLiability
Derivatives Designated as Hedging InstrumentsBalance Sheet Caption      
Interest rate swap contractsOther current assets$— $— $— $14 $— $2,250 
Foreign exchange contractsOther current assets220 — 4,824 271 — 6,778 
Foreign exchange contractsOther Assets27 — 1,609 43 — 1,551 
Foreign exchange contractsAccrued and other current liabilities— 101 2,691 — 24 1,623 
Foreign exchange contractsOther Noncurrent Liabilities— 1 91 — 1 43 
  $247 $102 $9,215 $328 $25 $12,245 
Derivatives Not Designated as Hedging InstrumentsBalance Sheet Caption      
Foreign exchange contractsOther current assets$186 $— $8,540 $221 $— $10,073 
Foreign exchange contractsAccrued and other current liabilities— 307 10,926 — 96 10,640 
  $186 $307 $19,466 $221 $96 $20,713 
  $433 $409 $28,681 $549 $121 $32,958 
Information on Derivative Positions Subject to Master Netting Arrangements as if they were Presented on a Net Basis The following table provides information on the Company’s derivative positions subject to these master netting arrangements as if they were presented on a net basis, allowing for the right of offset by counterparty and cash collateral exchanged per the master agreements and related credit support annexes at December 31:
20222021
AssetLiabilityAssetLiability
Gross amounts recognized in the consolidated balance sheet$433 $409 $549 $121 
Gross amounts subject to offset in master netting arrangements not offset in the consolidated balance sheet(220)(220)(110)(110)
Cash collateral received/posted(66)(19)(164)— 
Net amounts$147 $170 $275 $11 
Location and Pretax Gain or Loss Amounts for Derivatives
The table below provides information regarding the location and amount of pretax gains and losses of derivatives designated in fair value or cash flow hedging relationships:
Years Ended December 31202220212020202220212020202220212020
Financial Statement Caption in which Effects of Fair Value or Cash Flow Hedges are RecordedSales
Other (income) expense, net (1)
Other comprehensive income (loss)
$59,283 $48,704 $41,518 $1,501 (1,341)(890)$(339)$1,756 $(441)
(Gain) loss on fair value hedging relationships:
Interest rate swap contracts
Hedged items— — — (13)(40)40 — — — 
Derivatives designated as hedging instruments— — — 4 1 (76)— — — 
Impact of cash flow hedging relationships:
Foreign exchange contracts
Amount of gain (loss) recognized in OCI on derivatives
— — — — — — 684 333 (383)
Increase (decrease) in Sales as a result of AOCL reclassifications
773 (194)(6)— — — (773)194 6 
Interest rate contracts
Amount of gain recognized in Other (income) expense, net on derivatives
— — — (2)(2)(4)— — — 
Amount of loss recognized in OCI on derivatives
— — — — — — (2)(2)(4)
(1)    Interest expense is a component of Other (income) expense, net.
Income Statement Effects of Derivatives Not Designated as Hedging Instruments
The table below provides information regarding the income statement effects of derivatives not designated as hedging instruments:
Amount of Derivative Pretax (Gain) Loss Recognized in Income
Years Ended December 31202220212020
Derivatives Not Designated as Hedging InstrumentsIncome Statement Caption
Foreign exchange contracts (1)
Other (income) expense, net$(49)$313 $(12)
Foreign exchange contracts (2)
Sales(37)9 13 
Interest rate contracts (3)
Other (income) expense, net— — 9 
Forward contract related to Seagen common stockResearch and development— — 15 
(1)    These derivative contracts primarily mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates. Amount in 2021 includes a loss on forward exchange contracts entered into in conjunction with the spin-off of Organon.
(2)     These derivative contracts serve as economic hedges of forecasted transactions.
(3)     These derivative contracts serve as economic hedges against rising treasury rates.
Information on Investments in Debt and Equity Securities
Information on investments in debt and equity securities at December 31 is as follows:
 
 20222021
 Amortized
Cost		Gross UnrealizedFair
Value		Amortized
Cost		Gross UnrealizedFair
Value
  GainsLossesGainsLosses
Commercial paper$498 $— $— $498 $— $— $— $— 
U.S. government and agency securities68 — — 68 80— — 80 
Corporate notes and bonds3 — — 3 4 — — 4 
Foreign government bonds— — — — 2 — — 2 
Total debt securities569 — — 569 86 — — 86 
Publicly traded equity securities (1)
1,284 1,647 
Total debt and publicly traded equity securities$1,853 $1,733 
(1)    Unrealized net losses of $462 million were recorded in Other (income) expense, net in 2022 on equity securities still held at December 31, 2022. Unrealized net losses of $232 million were recorded in Other (income) expense, net in 2021 on equity securities still held at December 31, 2021.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Financial assets and liabilities measured at fair value on a recurring basis at December 31 are summarized below:
 Fair Value Measurements UsingFair Value Measurements Using
  Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
  20222021
Assets
Investments
Commercial paper$— $498 $— $498 $— $— $— $— 
Foreign government bonds— — — — — 2 — 2 
Publicly traded equity securities1,015 — — 1,015 368 — — 368 
 1,015 498 — 1,513 368 2 — 370 
Other assets (1)
U.S. government and agency securities68 — — 68 80 — — 80 
Corporate notes and bonds3 — — 3 4 — — 4 
Publicly traded equity securities269 — — 269 1,279 — — 1,279 
340 — — 340 1,363 — — 1,363 
Derivative assets (2)
Forward exchange contracts— 218 — 218 — 351 — 351 
Purchased currency options— 215 — 215 — 184 — 184 
Interest rate swaps— — — — — 14 — 14 
 — 433 — 433 — 549 — 549 
Total assets$1,355 $931 $— $2,286 $1,731 $551 $— $2,282 
Liabilities
Other liabilities
Contingent consideration$— $— $456 $456 $— $— $777 $777 
Derivative liabilities (2)
Forward exchange contracts— 402 — 402 — 120 — 120 
Written currency options— 7 — 7 — 1 — 1 
— 409 — 409 — 121 — 121 
Total liabilities$— $409 $456 $865 $— $121 $777 $898 
(1)    Investments included in other assets are restricted as to use, including for the payment of benefits under employee benefit plans.
(2)    The fair value determination of derivatives includes the impact of the credit risk of counterparties to the derivatives and the Company’s own credit risk, the effects of which were not significant.
Summarized Information about the Changes in Liabilities for Contingent Consideration
Summarized information about the changes in the fair value of liabilities for contingent consideration associated with business combinations is as follows:
20222021
Fair value January 1$777 $841 
Changes in estimated fair value (1)
(146)57 
Payments(119)(109)
Other(56)(12)
Fair value December 31 (2)
$456 $777 
(1)    Recorded in Cost of sales, Research and development expenses, and Other (income) expense, net. Includes cumulative translation adjustments.
(2)    At December 31, 2022 and 2021, $368 million and $620 million, respectively, of the liabilities relate to the termination of the Sanofi Pasteur MSD joint venture in 2016. As part of the termination, Merck recorded a liability for contingent future royalty payments of 11.5% on net sales of all Merck products that were previously sold by the joint venture through December 31, 2024. The fair value of this liability is determined utilizing the estimated amount and timing of projected cash flows using a risk-adjusted discount rate to present value the cash flows. Balance at December 31, 2022 includes $122 million recorded as a current liability for amounts expected to be paid within the next 12 months.