How Much Revenue Does Merck Generate From The United States?

December 31st, 2019 by Trefis Team
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Merck (NYSE:MRK) generates its revenue primarily from sales of pharmaceutical products. The company generated $18 billion in sales in the United States, accounting for over 40% of its total revenue in 2018. This figure has been on a decline and it dropped from 46% in 2016 to 43% in 2018, as the company’s drugs penetrate in international markets. Merck’s sales in the United States are much lower than that of Roche, Johnson & Johnson, and AbbVie. Below we show region-wise breakup of Merck’s revenues, its business model, and revenue trajectory. We also compare the United States as a market for Merck with that for other large pharmaceutical companies. You can look at our interactive dashboard analysis ~ How Big Is The United States Market For Merck? ~ for more details.

United States As A Region Accounts For Over 40% of The Company’s Total Revenue

  • Merck’s Revenue Contribution As of 2018:
    • United States ~ 43%
    • EMEA ~ 29%
    • Japan ~ 8%
    • ASPAC ~ 7%
    • LATAM ~ 6%
    • China ~ 5%
    • Others ~ 3%

United States As A Market Garnered Lowest Sales For Merck Among Large Pharmaceutical Companies

  • Merck’s sales in the United States declined from $17.1 billion in 2016 to $16.6 billion in 2018.
  • This compares with Johnson & Johnson’s US sales, which grew from $20.1 billion to $23.3 billion over the same period.
  • Roche’s sales in the United States grew from $18.8 billion to $23.7 billion between 2016 and 2018.
  • AbbVie’s sales in the United States grew from $15.9 billion to $21.5 billion in 2018.
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Merck’s Business Model

  • What Need Does It Serve?
    • Merck primarily serves the pharmaceuticals products markets. The company discovers, develops, and sells pharmaceutical products globally. Its drugs are used for the treatment of various types of diseases, including cancer, heart-related, and infectious, among others. Merck also operates in the animal health market.
    • Merck is one of the largest pharmaceuticals companies with a global presence. The firm used to develop consumer healthcare products, but the business was sold to Bayer in 2014.
  • Who Pays To Merck?
    • Chain stores (Walgreens, CVS, Rite-Aid, Walmart), clinics, long-term care facilities, health maintenance organizations, federal facilities, non-federal institutions, mail order pharmacies, retail stores, and animal healthcare centers.
  • What Buyers Care About?
    • Price
    • Subsidies available in the form of reimbursements
    • Availability
    • Any possible side effects
  • What Are The Alternatives To Merck?
    • Within pharmaceuticals, other alternatives are Bristol-Myers Squibb, Johnson & Johnson, Roche, Pfizer, Abbvie, GlaxoSmithKline, and Teva, among others.
    • Outside of pharmaceuticals, other alternatives are acupuncture, aromatherapy, ayurvedic medicine, chiropractic care, homeopathy, and nutritional counseling, among others.

The Contribution of United States To Merck’s Total Sales Has Hovered Around the 43% Mark In Recent Years

  • Merck’s total sales grew from $39.8 billion in 2016 to $46.6 billion in 2018.
  • The sales growth in the United States rose from $18.5 billion to $20.2 billion over the same period. Given the sales growth in the U.S. was much slower than the overall sales, the contribution of the United States as a region declined from 46% to 43%.

The Contribution of United States To Total Sales For Merck Is Lower Than That For Its Peers

Merck’s Total Revenue Grew 6% Between 2015 And 2018, And It Can Grow Another 10% In 2019

  • Merck’s sales growth over the recent years has primarily been led by Keytruda.
  • In fact, Keytruda alone is expected to generate over $10 billion in sales in 2019. And out of this $10 billion, we estimate $6 billion sales to come from the United States.
  • Looking forward, the sales growth is expected to slow, as the company will see the end of the market exclusivity period for some of its drugs. You can look at our interactive dashboard analysis for more details on Merck’s segment-wise revenues here.

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