A $16 Billion Investment in The Future

By Robert Davis, executive vice president, Global Services, and chief financial officer

Earlier this year, the accounting firm PricewaterhouseCoopers released a study – the 2018 Global Innovation 1000 Study – which found that Merck was in the top 10 of R&D investors. Not just in the United States – but in the world.

We were glad to see that – but we weren’t surprised. As CFO, I know that one of the most important investments we make at Merck is in R&D – about $7 billion a year over the last five years. We make those sustained investments year after year to build on the momentum we have today in oncology, vaccines, animal health and other crucial areas – and in the hope that we will invent even more medicines and vaccines that can make a difference in the world.

Creating the space where that research can take place and where the more than 19,000 people in Merck Research Labs can invent new medicines and vaccines means buildings and infrastructure and cutting-edge labs. And, because invention is not enough, we need the manufacturing facilities, capabilities and global supply chains to produce these medicines and vaccines and distribute them around the world, whether for people, pets or livestock.

That’s why last month we announced an endeavor of an unprecedented scope for our company: we will invest $16 billion in capital projects over the next five years. That is in addition to our annual investment in R&D.

While Merck* is a global company, the United States is where we have been based for more than 125 years, and where 25,000 of our employees live. I am proud to say that more than $9 billion of these investments will be spent here in the United States.

A portion of these investments will go toward expanding our vaccine production capacity to the highest levels we have ever reached – because demand for vaccines globally is the highest it has ever been. For example, we plan to more than triple the global distribution of our HPV vaccines from our 2017 base over the next five years. We know that we have an essential role in supporting vaccination efforts around the world, and we want to do our part.

These are sizable investments, to be sure. And they have some risk as well. Just as we don’t know if the money we invest in R&D will result in a new medicine, we build our facilities based on expectations of what the demand will be five and ten years from now. But placing those long bets is what has made Merck who we are today – because we invest not just for the next quarter, but for the next generation.

*Merck & Co. is known as MSD outside the United States and Canada