Merck Profits Rise, Tariffs Add $200M in Costs

Merck reported first-quarter earnings that beat analyst expectations, posting adjusted earnings per share of $2.22 and revenue of $15.53 billion, despite a 2% year-over-year sales decline. The company anticipates an extra $200 million in costs this year from tariffs imposed by the Trump administration and retaliatory actions, especially from China. Keytruda sales rose 4%, though Merck faces a patent expiration for the drug in 2028, which could invite generic competition. Animal health products also grew, offsetting declines in vaccine sales, particularly Gardasil, which saw a sharp drop due to weak demand in China. Merck maintained its 2025 worldwide sales forecast but cut its 2025 adjusted earnings guidance to account for tariff-related costs and other charges. Industry peers like Roche are seeking tariff exemptions and moving production to the U.S. as the sector faces regulatory, pricing, and trade challenges.