McKinsey pays $650 million to fight opioid crisis

The consulting firm helped a U.S. pharmaceutical company promote an addictive painkiller. Now, that's costing McKinsey dearly.

Consulting firm McKinsey will pay $650 million to end an investigation into its work for U.S. opioid maker Purdue Pharma. The company will avoid prosecution thanks to a deal with the U.S. Department of Justice, according to court documents filed in the U.S. state of Virginia on Friday.

Not only must he pay the money, but he must also meet other conditions within five years, including ceasing all sales and marketing of controlled substances.

According to court documents, Purdue paid McKinsey more than $93 million over 15 years, including to increase sales of oxycodone, a powerful and highly addictive painkiller.

Regret and delete files

McKinsey was commissioned to find out which doctors Purdue Pharma representatives would persuade to write additional prescriptions. Therefore, the prescription was issued without a medically recognized indication and was unsafe, ineffective and medically unnecessary.

McKinsey issued a statement saying: “We deeply regret our past client service for Purdue Pharma and the actions of a former partner to delete documents related to his work for this client.” They must recognize the impact of opioids on society cause harm and shall not be responsible for Purdue Pharma's sales and marketing efforts. “Our company will forever regret this terrible public health crisis and our past work on behalf of opioid manufacturers.”

A former senior partner at McKinsey pleaded guilty to obstructing justice, documents show. After learning of the investigation into Purdue Pharma, he deleted the files from his laptop.

The consulting firm also sought to give Purdue a say in drafting federal laws, documents show. That results in high-dose oxycodone being subject to the same regulations as lower-dose opioids and making training for prescribers voluntary rather than mandatory, the government said in new documents.

80,000 people succumb to drug addiction

McKinsey has agreed to pay approximately $765 million in settlements to state and local governments through 2021 for its role in selling powerful prescription painkillers. Health insurers and insurance companies will receive an additional $78 million.

In recent years, more than 80,000 people in the United States have been addicted to drugs. Over the past decade, most deaths have been attributed to illicit fentanyl, which is mixed into many drugs. At the beginning of the outbreak, prescription drugs were the leading cause of death. Some experts say the crisis was triggered when Purdue Pharma's drug OxyContin was launched in 1996.

The company received a total of $8.3 billion in fines in 2020. Much of that amount was deferred while the bankruptcy court settlement was ongoing.

In a press release, several representatives of U.S. legal authorities harshly criticized McKinsey. McKinsey conspired with Purdue Pharma to boost OxyContin sales as the severe opioid epidemic continues to devastate families and communities across the country, the company said in a statement.

highly addictive opioids

The comparison should now be taken as a message by consulting firms such as McKinsey: “If the advice your company provides in boardrooms and PowerPoint presentations supports and encourages criminal activity, we will come after you and we will expose the truth.”

An FBI official said the settlement demonstrates that when you try to exploit a crisis by putting “profits over patient safety” and then try to hinder an investigation, you pay a heavy price.

“McKinsey will now be held criminally and financially responsible for developing an aggressive marketing strategy that was effectively a road map to increase sales of highly addictive opioids.” This resulted in powerful prescription painkillers being labeled as unsafe, ineffective, and medical used in unnecessary ways. (dpa/chm) (aargauerzeitung.ch)