What could go wrong

1. 1Merck identifies its dependence on patent rights as a risk: if patents are invalidated or products lose market exclusivity, generic or biosimilar competition can rapidly reduce sales. Keytruda is its biggest-selling product, and the company reports that U.S. government price-setting for certain medicines is also affecting its business.
2. 2Government and private health-care cost controls can lower prices or restrict access. The latest quarterly report describes price-setting, Medicaid discounts and other cost-reduction measures, including a German health-care reform law expected to put downward pressure on sales there.
3. 3Vaccine sales can be affected by changes in vaccination recommendations, government purchasing and demand. Gardasil sales fell in China, where Merck suspended shipments before agreeing to limited shipments under a revised distributor contract; U.S. childhood immunization schedule changes were also subject to a court injunction and government appeal.