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McKinsey to pay $650 million after advising opioid maker on how to ‘turbocharge’ sales


U.S. Department of fairness

McKinsey to pay $650 million after advising opioid maker on how to ‘turbocharge’ sales

Portrait of Aysha Bagchi Aysha Bagchi

USA TODAY

Global consulting firm McKinsey & business agreed Friday to pay $650 million to resolve criminal and civil investigations into the advice it provided to opioids manufacturer Purdue Pharma.

As part of the agreement, McKinsey admitted in a court filing that it chose to continue working with Purdue Pharma to enhance sales of OxyContin despite knowing the risks of the addictive opioid. McKinsey was paid more than $93 million by Purdue Pharma across 75 engagements from 2004 to 2019.

The court filing includes a host of admissions by McKinsey, including that – after being retained by Purdue Pharma in 2013 to do a rapid assessment of OxyContin’s act – it said the drug manufacturer’s organizational mindset and population would require to evolve in order to “turbocharge” its sales.

OxyContin, a painkiller, spurred an epidemic of opioid addiction. More than 100,000 Americans have been dying annually in recent years from drug overdoses, and 75% of those deaths involved opioids, according to the National Institutes of Health.

More:These two moms lost sons to opioids. Now they’re on opposite sides at the Supreme Court.

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The McKinsey & Company logo is displayed at the 54th International Paris Airshow at Le Bourget Airport near Paris, France, June 21, 2023.

The fairness Department charged McKinsey’s U.S. branch with knowingly destroying records to obstruct an investigation and with conspiring with Purdue Pharma to assist misbrand prescription drugs. The drugs were marketed to prescribers who were writing prescriptions for unsafe, ineffective, and medically unnecessary uses, according to the charges.

The government won’t shift forward on those charges if McKinsey meets its responsibilities under the agreement.

The agreement also resolves McKinsey’s civil debt for allegedly violating the untrue Claims Act by causing Purdue Pharma to submit untrue claims to federal healthcare programs for medically unnecessary prescriptions of OxyContin.

In a statement provided to USA TODAY, McKinsey said it is “deeply sorry” for its service to the drug maker.

“We should have appreciated the damage opioids were causing in our population and we should not have undertaken sales and marketing work for Purdue Pharma,” McKinsey said. “This terrible community health crisis and our history work for opioid manufacturers will always be a source of profound remorse for our firm.”

In addition to paying $650 million, McKinsey agreed it won’t do any work related to selling controlled substances for five years.

More:Supreme Court throws out multi-billion dollar settlement with Purdue over opioid crisis

In June, the Supreme Court threw out a major insolvency settlement for Purdue Pharma that had shielded the Sackler household behind the business’s drug marketing from upcoming damages. The settlement would have paid $6 billion to victims, but also would have prevented people who hadn’t agreed to the settlement from suing the Sacklers down the line.

A insolvency judge had approved the settlement in 2021, after Purdue Pharma filed for insolvency to address debts that largely came from thousands of lawsuits tied to its OxyContin business. The monetary award would have been given to creditors that included local governments, person victims, and hospitals.

The Friday agreement is just the latest in a series of legal developments tied to McKinsey’s role in the opioid epidemic.

The business reached a $573 million settlement in 2021 with 47 states, Washington, D.C., and five U.S. territories, and agreed to pay school districts $23 million to assist with harms and monetary burdens resulting from the opioid crisis.

Contributing: Bart Jansen and Maureen Groppe

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