Merck & Co. Animal Health (MSD)

A.1.1. MSD does not currently recognise antimicrobial resistance (AMR) or exposure to antibiotics as a material risk to its business. It recognises that both an outbreak of disease that leads to widespread death, precautionary destruction or reduces consumption and demand for animals, as well as epidemics and pandemics that affect livestock could adversely affect the company. These could inherently include the risk posed by the presence of an antibiotic-resistant disease or bacteria in animals, but this is not specifically disclosed. MSD also recognises that events that affect the markets for its leading products could have a material effect on the business and highlights three antibiotic products (Nuflor, Resflor and Aquaflor, all florfenicol) in its principal products for its animal health segment. Notably, however, the company only specifically highlights one product, Bravecto (used for flea and tick prevention and is not an antibiotic), which made up 19% of sales in its animal health segment, as a product where negative effects could have a material adverse effect on the company's animal health segment sales. This suggests its sales of livestock antimicrobials is not as significant to its business. A.1.2. MSD appears to be investing in increasing its product offerings that could reduce the use of antibiotics in animal health but does not describe these as a strategy to reduce its exposure to antibiotics. Such product offerings include vaccines and technologies (SenseHub™ Dairy and SenseHub™ Feedlot products) that it states could reduce the use of antibiotics by monitoring cows' behaviour and alerting farmers of potential signs of disease at an early stage. As MSD Animal Health does not disclose the percentage of revenue from these products or antibiotics, it is unclear how these new offerings may be reducing its exposure to antibiotics. MSD is the only company in the engagement that is a signatory of the AMRIA Industry Roadmap for Progress on Combatting AMR. Signatories commit to reducing the development of antimicrobial resistance, investing in R&D and improving access to high-quality antibiotics and vaccines. It is unclear if this commitment applies to its animal health business. In 2021, the company specified that it was developing or commercializing vaccines for 15 animal diseases prioritized by the World Organization for Animal Health; however it is unclear which of these could reduce the need for antibiotics and the company has not provided a more recent update related to this statement. The company does, however, state in its 2024 Delivering on Our Commitments that it is working on vaccine innovation to reduce the key drivers of AMR although it does not provide any further details or numbers. MSD Animal Health has increased the number of vaccines it manufactures to 112 billion doses annually from 102 billion in its previous reporting but does not stipulate what percentage of these vaccine doses could reduce the use of antibiotics. It is, therefore, difficult for investors to assess the extent to which MSD is developing its offering of vaccines that reduce the need for antibiotics in livestock. Outside of increasing its offering of vaccines and technologies that could reduce the use of antibiotics, the company has not disclosed information publicly to suggest it is looking to reduce its own exposure to the sale of antibiotics within its animal health segment. A.1.3. MSD remains the only company in the engagement with both a human and animal health business. MSD does not disclose its revenue from the sale of antibiotics in its animal health segment but does list revenue from specific antibiotics in its human segment, e.g. Zerbaxa (0.4% of total revenue in 2024). The livestock segment of its animal health business accounted for 5.4% of its total revenue in 2024.

A.2.1. MSD’s animal health business does not disclose details of a strategy specific to the responsible sale and marketing of antimicrobial products for its livestock segment. MSD states that it provides an antimicrobial stewardship curriculum for all relevant employees, and adopts innovative approaches to field sales representative compensation in some countries but it is unclear if this includes its animal health segment. In its 2024 Delivering on Our Commitments document, MSD specifically highlights its work in informing the UK subscription model where an antibiotic’s reimbursement is based on its value to the health system rather than the volume prescribed. MSD does not, however, provide examples of this that are specific to its own sales incentives for its antimicrobial product offerings. MSD’s Veterinary Manuals cover topics including ‘antimicrobial feed additives for animals’ (updated Sept 2024). Under this topic, MSD continues to list antimicrobials that are currently banned by the EU for use as growth promoters in animal feed, and states that ‘these are not medically important to humans and pose little risk to AMR development.’ This list includes virginiamycin, categorised as a highly important antimicrobial (HIA) by the World Health Organization (WHO). A.2.2. As before, unlike other companies in the engagement, MSD has not disclosed whether it has voluntarily removed indications for growth promotion or prophylaxsis globally from any of its antibiotic products. In Brazil, Nuflor (florfenicol, a medically important antimicrobial classified as a HIA by the WHO) is indicated for uses that include giving to animals that have been subjected to stressful conditions or kept in facilities where the incidence of the disease has been observed frequently, during their stay or shortly after shipment. This labelling indication does not align with the WHO’s recommendation to completely restrict the use of all classes of medically important antimicrobials in food-producing animals for prevention of infectious diseases that have not yet been clinically diagnosed. A.2.3. MSD’s animal health business does not appear to have a strategy for the responsible sale and marketing of antimicrobial products for its livestock segment. MSD’s 2024 Code of Conduct states, as before, that the information provided to MSD's customers must be supported by scientific evidence and consistent with the product label. Any ethics and compliance concerns are triaged by the ethics and compliance office and the company states that if allegations are substantiated appropriate disciplinary actions are taken. The company does not share any instances of non-compliance or misconduct nor how these would be addressed for the animal health business specifically. A.2.4 It is unclear what performance indicators the sales of antimicrobials are linked to in the company’s animal health segment.

B.1.1. MSD continues to state that it's manufacturing facilities are required to use specific Environmental Quality Criteria (EQC) to manage active pharmaceutical ingredients (APIs) in their wastewater. For its suppliers, MSD states that it provides wastewater discharge criteria and has initiated assessments to better understand and address potential impacts. MSD does not disclose if the EQC or wastewater discharge criteria specifically addresses antimicrobial compounds in its wastewater discharge. MSD remains the only company in the engagement that is a member of the AMR Industry Alliance (AMRIA). Members of the alliance follow the Common Antibiotic Manufacturing Framework (CAMF), a methodology outlining the minimum requirements needed to conduct a site risk evaluation and ensure appropriate antibiotic discharge management. The alliance assesses progress of its members against the CAMF and alliance members are committed to assessing products manufactured against the Predicted No Effect Concentrations targets (PNEC targets). MSD does not appear to apply the CAMF to the animal health business, and MSD does not provide an explanation for this. As in its previous reporting, MSDs ‘2024/2025 Impact Report’ continues to state that it reviewed the operations of its human health antibiotic manufacturing facilities and third-party human health antibiotic suppliers to assess their wastewater treatment controls and that it has developed a mechanism for transparently demonstrating that its supply chains meet the standards in the framework. MSD has not reported its findings from this assessment, and it remains unclear if its human health antimicrobial manufacturing meets all the CAMF criteria requirements or if all its relevant products have been assessed and are in line with PNEC targets. Notably the company does not disclose whether it has reviewed the operations of its animal health antibiotic manufacturing facilities or third-party suppliers to assess their wastewater treatment controls. It, therefore, remains unclear if MSD has a strategy for addressing levels of antibiotic discharge from the manufacture of antibiotic products for its animal health segment to ensure these remain within safe limits. In its ‘2024 Delivering on Our Commitments’ document MSD highlights the third-party verification program for the AMR Industry Alliance standard, which is facilitated by British Standards Institution (BSI) standards. MSD does not mention if its own human or animal heath segments are aiming for this certification. B.1.2. For its animal health segment, it remains unclear if MSD monitors its own or third-party antimicrobial manufacturing sites to ensure that active pharmaceutical ingredients from antibiotic manufacturing remain within PNEC. The company's 2023 policy statement on ‘Environmental Sustainability In Animal Health’ does not contain any information about how it ensures levels of active pharmaceutical ingredients from antibiotic manufacturing remain within safe limits. B.1.3. The Environmental Review Committee oversees the company's EQC standards; however, it is unclear how compliance is assessed and addressed at the company’s own manufacturing sites. MSD states that it screens external manufacturers for environmental health and safety (EHS) compliance and conducts periodical reassessments. Where required, the company states corrective and preventative action plans (CAPAs) are developed and monitored to completion. It is unclear if antibiotic effluent is monitored through this screening and reassessment. B.1.4. The company has previously disclosed it has Animal Health manufacturing sites in Germany, Australia, Spain and New Zealand but this does not appear to be an exhaustive list. As before, the company has not provided any details on where its largest third-party manufacturers and API suppliers are located for its animal health business. It disclosed that it in July 2024 it acquired the Aqua business of Elanco, including two manufacturing facilities in Canada and Vietnam.

C.1.1. MSD continues to state that vaccines can be used to reduce the need for antibiotics within animal health. It now also highlights that it is advancing a range of technologies that could reduce the need for antibiotic use in animal health, highlighting its SenseHub™ Dairy and SenseHub™ Feedlot products which it states alert the farmer to deviations from normal behaviour allowing earlier detection of disease and therefore helping to maintain a healthy herd and reduce the need for antibiotics. C.1.2. MSD continues to offer a number of products that reduce the need for antibiotics. In particular, the company highlights its vaccine offerings and has stated that it has increased its manufacturing volume to 112 billion vaccines a year. It is unclear what proportion of these could reduce the need for antibiotics. MSD now also highlights its technological product offerings that could reduce the need for antibiotics but does not provide a breakdown of products that could reduce the need for antibiotics as a percentage of its product portfolio. The company does not provide any information about how it assesses the effectiveness of these products in reducing antibiotic use. C.1.3. The company does not provide a breakdown of revenue from products that could reduce the need for antibiotics, or disclose the number of such products in its portfolio.

C.2.1. As before, MSD is clearly investing in R&D for alternatives to antibiotics, but the company does not disclose the proportion of its overall R&D spend on this. In 2024, MSD Animal Health stated it is working to develop vaccines for a variety of animal diseases, including those animal diseases where vaccines can reduce the need for antibiotic use. In 2024, MSD invested $17.9 billion in research and development. However, it does not disclose what percentage of this was within its Animal Health segment or how much of this was directed towards products that could reduce the need for antibiotics. It is, therefore, unclear if MSD is strategically approaching the development of its this product range or if it intends to increase spending in this area in the coming years. C.2.2. In 2024, Merck acquired the Aqua Business of Elanco Animal Health. This acquisition has increased the portfolio of products offered by MSD and included additional vaccines, an antiparasitic sea lice treatment and a DNA vaccine-based technology that could help develop novel vaccines. C.2.3. MSD provides no visibility over the marketing spend for its animal health business. Thus, investors have no oversight of marketing spend for antibiotics or products that could reduce the need for antibiotics.

D.1.1. MSD has engaged in stewardship activities globally focused on reducing antibiotic use in farming. Some of the initiatives to support antibiotic stewardship in animals include: • MSD was a founding member of Global Alliance for Livestock Veterinary Medicine (GALVmed), an initiative to improve access to medicines and vaccines in Africa and Asia for small-scale livestock producers. Improved access to some types of vaccines could help to reduce the need for antibiotic use. • In 2019 and 2020 MSD funded scholarships through the Association of American Veterinary Medical Colleges (AAVMC) designed to help mitigate AMR. • In 2021 it released ‘Addressing a Global Public Threat’ public document advocating for increasing vaccination, diagnostic use, evidence-led policies on AMR and supporting global AMR surveillance systems. • MSD Animal Health was the first industry partner of the Preventing Zoonotic Disease Emergence (PREZODE) Initiative which aims to advance global research efforts on animal, human, and environmental health to better understand, prevent, detect, and monitor zoonotic pandemic risks. • ‘Time to Vaccinate’ campaign, promoting vaccination for food animals in Europe. • MSD's General Vice President represents the biopharmaceutical industry in the One Health Global Leaders Group on AMR. MSD has also disclosed that it has supported the development of several Antimicrobial Stewardship (AMS) Centres of Excellence and provided grants for AMS research projects. However, it is unclear if these will support research to improve antibiotic stewardship in food-producing animals. In 2025, MSD’s website stated that it has funded 70+ investigator-initiated antimicrobial stewardship programs, however it is unclear if any of these programmes are related to animal health. D.1.2. MSD runs the Study for Monitoring Antimicrobial Resistance Trends (SMART), started in 2002, with an online database launched in 2020. SMART is a surveillance programme that determines pathogen prevalence and antibiotic susceptibility in 220 sites across 60 countries. MSD also participates in the AMR Register, an online platform that allows pharma companies to share susceptibility data on infection-causing pathogens, however, both of these programmes appear to be for monitoring pathogens in humans. Outside of advocating for the National Antimicrobial Resistance Monitoring System (NARMS), a US-based public health surveillance system that tracks changes in the antimicrobial susceptibility of enteric (intestinal) bacteria found in people, retail meats, and food animals, MSD does not disclose how it is supporting AMR stewardship efforts to improve AMR surveillance and reduce antibiotic residues entering the environment from farms.

D.2.1. MSD discloses political and lobbying spend in countries where this is required by law. Lobbying is overseen by the Governance Committee of the Board of Directors. Political contributions are disclosed for the US, Canada, Japan, Australia and New Zealand. In the company’s 2023/2024 Impact Report MSD disclosed that in the US it engaged on protecting access to animal health products and support for a strong immunization infrastructure, although it is unclear if this is for humans or animals. MSD also declared it lobbied in Europe for Preventing Antimicrobial Resistance (AMR): Prevention First Initiative, Animal welfare and the science-based solutions provided by its new technology portfolio, and Animal health as a contributor to food sustainability. MSD does not disclose what position it has taken when lobbying on these issues. MSD also discloses all trade association dues greater than $25,000 where the trade association is used for lobbying in the US. Notably, the Animal Health Institute, a lobbying organisation and an association member of HealthforAnimals, is listed as receiving $89,091 in 2024, $70,770 in 2023, $68,708 in 2022, and $49,481 in 2021. HealthforAnimals is a global industry association for animal health.