Navigating Merck’s Gardasil Sales Drag in 2025: Key Insights
Explore how weak Gardasil sales in China and Japan are impacting Merck’s 2025 revenue, uncover strategic responses, and understand what this means for the vaccine giant’s near-term growth outlook.
Key Takeaways
- Gardasil sales plunged 48% to $2.45B in H1 2025, mainly due to China and Japan.
- Merck halted Gardasil shipments to China until at least end-2025 to clear excess inventory.
- Japan’s sales weakened from reimbursement expiration and public purchase timing.
- Merck withdrew its $11B Gardasil sales target for 2030 amid ongoing headwinds.
- Other Merck vaccines also saw sales declines in early 2025.
- New RSV antibody Enflonsia launched, facing competition from AstraZeneca/Sanofi’s Beyfortus.
Merck’s Gardasil vaccine, once a shining star in its portfolio, has hit a rough patch in 2025. Sales dropped a staggering 48% in the first half of the year, tumbling to $2.45 billion. The main culprits? Weak demand in China and Japan, two critical markets where economic and policy challenges have cast long shadows.
China’s economic slowdown paired with bloated distributor inventories forced Merck to pause Gardasil shipments until at least the end of 2025. Meanwhile, Japan’s sales suffered from the expiration of reimbursement for catch-up vaccination cohorts and irregular public sector purchases. These setbacks have forced Merck to pull back its ambitious $11 billion Gardasil sales target for 2030.
This article dives into the Gardasil sales slump, its ripple effects on Merck’s top line, and how the company is navigating these choppy waters. We’ll also explore the broader vaccine portfolio and what the future holds for this pharmaceutical giant.
Examining Gardasil’s Sales Decline
Gardasil’s sales nosedived 48% in the first half of 2025, landing at $2.45 billion. That’s nearly half the revenue from the same period a year earlier. Imagine a blockbuster product suddenly losing its shine—this is the reality Merck faces. The steep drop is largely due to China, where demand softened amid an economic slowdown. Distributors like Zhifei found themselves sitting on piles of unsold vaccine doses, prompting Merck to halt shipments until at least the end of 2025.
Japan’s story adds another layer. The expiration of reimbursement for catch-up vaccination cohorts and the timing of public sector purchases have dampened sales. While the U.S. market remains relatively stable, with slight growth driven by price and demand, the combined weight of China and Japan’s struggles has pulled Gardasil’s global sales down sharply.
This decline isn’t just a number—it’s a shift in Merck’s revenue landscape. Gardasil was once a reliable growth engine, but now it’s a drag, forcing the company to rethink its forecasts and strategies.
China’s Economic Slowdown Impact
China’s economic headwinds are at the heart of Gardasil’s sales troubles. The country’s GDP growth has slowed, and a housing market slump has chipped away at consumer confidence. For a vaccine like Gardasil, which relies on steady demand and public health initiatives, this spells trouble.
The inventory buildup at Zhifei, Merck’s commercialization partner, is a symptom of this weak demand. When distributors hold excess stock, it’s a red flag that sales aren’t matching expectations. To avoid flooding the market and depressing prices, Merck paused shipments, a move that underscores the seriousness of the situation.
This pause extends beyond mid-2025, now expected to last until the end of the year. It’s a clear signal that Merck is prioritizing inventory normalization over short-term sales boosts. The company’s withdrawal of its $11 billion Gardasil sales target for 2030 reflects the uncertainty surrounding China’s recovery timeline.
Japan’s Policy and Market Challenges
Japan’s Gardasil sales woes stem from policy shifts and market timing. The expiration of reimbursement for catch-up vaccination cohorts means fewer people are covered for the vaccine, directly hitting demand. Public sector purchases, which often drive volume spikes, have been irregular, adding to the sales slump.
Unlike China’s economic factors, Japan’s challenges are more about healthcare policy and purchasing cycles. This creates a patchy sales pattern that’s hard to predict or smooth out. For Merck, it means continued pressure on Gardasil sales in the region through the second half of 2025.
Despite these hurdles, Gardasil remains a key vaccine in Japan’s prevention arsenal. The company’s ability to navigate reimbursement landscapes and align with public health initiatives will be crucial for stabilizing sales.
Merck’s Broader Vaccine Portfolio
Gardasil isn’t Merck’s only vaccine, but it’s certainly the second-largest. Other vaccines like ProQuad, M-M-R II, Varivax, Rotateq, and Pneumovax 23 also saw sales declines in early 2025. This suggests broader market or operational challenges beyond Gardasil alone.
On a brighter note, Merck launched Enflonsia (clesrovimab), a respiratory syncytial virus (RSV) antibody approved in the U.S. in June 2025. It’s designed to protect infants with a single dose regardless of weight—a unique selling point. However, Enflonsia faces stiff competition from AstraZeneca and Sanofi’s Beyfortus, which recorded a 79% sales increase in the first half of 2025.
Merck’s vaccine portfolio diversification and pipeline innovations are vital as Gardasil sales falter. They provide alternative revenue streams and growth opportunities, helping to offset some of the top-line pressure.
Outlook and Strategic Adaptation
Merck’s near-term outlook is clouded by Gardasil’s sales drag, especially with the shipment halt in China extending through 2025. The company expects weak demand in Japan to persist as well. These factors combine for a projected negative compound annual growth rate of 15.1% for Gardasil over the next three years.
Management is focusing on inventory management and pipeline progress to navigate these headwinds. CEO Robert M. Davis highlighted efforts to realize near-term opportunities and emphasized the importance of new product launches.
While Gardasil’s challenges weigh on Merck’s revenue, the company’s oncology franchise and vaccine pipeline offer a broader foundation. The stock’s valuation, trading at a forward P/E of 8.98 compared to the industry’s 14.79, reflects both risk and potential. Investors should watch how Merck balances these pressures and opportunities in the coming quarters.
Long Story Short
Merck’s Gardasil sales slump in 2025 is more than a hiccup—it’s a significant drag on the company’s revenue, especially with China’s economic headwinds and Japan’s policy shifts. The halt in Chinese shipments underscores the inventory and demand challenges that won’t simply vanish overnight. Yet, Merck’s diversified vaccine lineup and pipeline innovations, including the recent launch of Enflonsia, offer some ballast amid the storm. For investors and observers, the key takeaway is that Merck’s near-term growth will likely remain constrained by Gardasil’s struggles. However, the company’s strategic focus on inventory management and new product launches signals a commitment to steadying the ship. The eventual clearing of inventories and stabilization in key markets could pave the way for recovery beyond 2025. In the meantime, Merck’s stock performance reflects these uncertainties, trading below industry averages but offering valuation appeal. For those watching the vaccine space, this is a story of resilience, adaptation, and the complex dance between global markets and pharmaceutical innovation.