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

Global consulting firm McKinsey & Company 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 improve 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 performance – it said the drug manufacturer's organizational mindset and culture would need 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.

Holiday deals:Shop this season’s top products and sales curated by our editors.

The Justice Department charged McKinsey's U.S. branch with knowingly destroying records to obstruct an investigation and with conspiring with Purdue Pharma to help 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 move forward on those charges if McKinsey meets its responsibilities under the agreement.

The agreement also resolves McKinsey's civil liability for allegedly violating the False Claims Act by causing Purdue Pharma to submit false 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 harm opioids were causing in our society and we should not have undertaken sales and marketing work for Purdue Pharma," McKinsey said. "This terrible public health crisis and our past work for opioid manufacturers will always be a source of profound regret 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 bankruptcy settlement for Purdue Pharma that had shielded the Sackler family behind the company's drug marketing from future 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 bankruptcy judge had approved the settlement in 2021, after Purdue Pharma filed for bankruptcy to address debts that largely came from thousands of lawsuits tied to its OxyContin business. The financial award would have been given to creditors that included local governments, individual 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 company 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 help with harms and financial burdens resulting from the opioid crisis.

Contributing: Bart Jansen and Maureen Groppe

Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.