A steep fall in demand from China drove a 41% decline in MSD Q1 2025 sales of its human papillomavirus (HPV) vaccines Gardasil and Gardasil 9, marking a continued setback for the company’s second-highest selling product.
During MSD’s Q1 2025 earnings call on 24 April, chief financial officer Caroline Litchfield said MSD does not expect to resume Gardasil shipments to China before mid-year, following a suspension announced back in February.
Q1 2025 Gardasil sales totalled $1.3bn, down from $2.2bn in Q1 2024. Excluding the impact of foreign exchange, the decline was 40%. Despite the setback in China, the company said the revenue drop was partially offset by stronger demand in the US and Japan. Outside of China, Gardasil sales grew 14%, or 16% on a constant currency basis.
Litchfield acknowledged that China would continue to be a hang heavy on the company’s vaccine performance this year: “As we look to Gardasil globally this year, we expect China to be a headwind…expect, given the current dynamics in China, that it is not so likely that we will ship further product in China.”
The suspension in shipments came amidst a challenging environment in China, where a combination of regulatory scrutiny, growing local competition, and weaker discretionary spending hit foreign vaccine makers. MSD previously withdrew its $11bn Gardasil sales target in Q4 2024, citing the deteriorating outlook on the Chinese market.
Despite the pullback, Litchfield reiterated the company’s focus on long-term opportunities in China, including plans to expand access to the vaccine for males, and emphasised strong double-digit growth potential elsewhere.
In January 2025, MSD secured approval for Gardasil for men aged 9 to 26, and on April 14, 2025, the Chinese regulator approved the more advanced Gardasil 9 shot for men aged 16 to 26.
MSD CEO Robert Davis also addressed growing concerns about trade policy, as the US government moved forward with a Section 232 investigation into pharmaceutical imports – a precursor to potential industry-specific tariffs.
Davis said the company is anticipating approximately $200m in tariff-related costs from existing duties involving the US, China, Canada, and Mexico. He emphasised that MSD is actively adapting its manufacturing strategy to mitigate future risks.
Many large pharma companies like Johnson & Johnson Innovative Medicine (J&J) and Novartis have announced plans to increase manufacturing activity in the US against the backdrop of these tariff announcements, and MSD announced its own $1bn investment in the US in March 2025.
