Merck & Co. has launched a new multiyear optimization to generate an expected $3.0 billion in annual cost savings from productivity actions, which the company says will be fully reinvested to support new product launches and its pipeline across multiple therapeutic areas. The company made the announcement as part of second-quarter earnings announcement on July 29, 2025. 

As part of this initiative, the company has approved a new restructuring program, in which it expects to eliminate certain administrative, sales, and R&D positions. The company says it will, however, continue to hire employees into new roles across strategic growth areas of the business. In addition, the company says it will reduce its global real estate footprint and continue to optimize its manufacturing network, aligning the geography of its global manufacturing to its customers and reflecting changes in the company’s business. 

The company anticipates cumulative pretax costs related to the program to be approximately $3.0 billion. For the second quarter of 2025, the Company recorded charges in its GAAP results of $649 million related to this restructuring program. 

The Company expects the actions under the restructuring program to result in annual cost savings of approximately $1.7 billion, which will be substantially realized by the end of 2027. This restructuring program is part of the multiyear optimization initiative expected to achieve $3.0 billion in annual cost savings by the end of 2027. 

Emphasis on US manufacturing and R&D investments 
In its second-quarter results, the company also highlighted its recently announced investments in its US manufacturing and R&D capabilities. This includes the start of construction for a $1.0-billion, 470,000-square-foot Biologics Center of Excellence in Wilmington, Delaware, which will serve as a launch and commercial production facility and the primary US. manufacturing site for Keytruda (pembrolizumab), an immunotherapy for treating multiple cancers. Keytruda posted 2024 global sales of $29.5 billion and 2024 US sales of $17.9 billion, with the US representing 61% of its global sales. In addition, the company announced an $895-million expansion of its animal-health manufacturing facility in De Soto, Kansas; the 200,000-square-foot facility will increase capacity for animal health vaccines and biologic products. 

Source: Merck & Co.