Merck plans to reduce costs by $3 billion by 2027 to support new products and offset revenue losses from Keytruda’s patent expiration in 2028. The company faces challenges with tariffs on pharmaceuticals but remains confident in its ability to grow. Merck reported second-quarter revenue below estimates due to China sales of Gardasil.

Merck approved a restructuring program to eliminate positions and reduce costs, with plans to generate $1.7 billion in annual savings by 2027. The company expects pretax costs of $3 billion, with a $649 million charge recorded for the second quarter. Merck narrowed its full-year guidance and reported second-quarter earnings slightly below expectations.

Merck’s pharmaceutical unit revenue of $14.05 billion in the second quarter was down 2%, with Keytruda sales at $7.96 billion, up 9%, driven by demand for earlier-stage cancers. Gardasil sales were $1.13 billion, down 55% due to China demand. Winrevair sales were $336 million. Animal health division sales were almost $1.65 billion, up 11%.

Read more at CNBC: Merck (MRK) earnings report Q2 2025