McKinsey & Company, the global consulting giant, has agreed to pay $650 million to resolve criminal and civil investigations into its involvement in advising Purdue Pharma, the manufacturer of the opioid OxyContin. The settlement addresses the firm’s role in helping the drugmaker enhance sales of its addictive painkiller despite knowing the associated risks.
From 2004 to 2019, McKinsey earned over $93 million for 75 consulting engagements with Purdue Pharma. Among the admissions in court documents, McKinsey acknowledged its work in 2013 to conduct a rapid assessment of OxyContin sales, during which it suggested strategies to “turbocharge” revenue. The firm also admitted to being aware of the public health risks tied to opioids but continued its advisory services.
Legal Allegations and Admissions
The Justice Department accused McKinsey of conspiring with Purdue Pharma to misbrand prescription drugs, marketing them for unsafe, ineffective, or medically unnecessary uses. Additionally, McKinsey’s U.S. branch faced charges of deliberately destroying documents to obstruct an investigation.
Under the settlement terms, criminal charges will not proceed if McKinsey fulfills its obligations, which include refraining from consulting work related to selling controlled substances for the next five years.
The agreement also resolves McKinsey’s civil liability under the False Claims Act, which accused the firm of causing Purdue Pharma to submit false claims for unnecessary OxyContin prescriptions to federal healthcare programs.
McKinsey’s Response
In a public statement, McKinsey expressed deep regret for its involvement, acknowledging the devastating impact of opioids on society. “We should have recognized the harm opioids were causing and should not have engaged in sales and marketing work for Purdue Pharma,” the firm stated.
Broader Implications
This settlement is the latest chapter in the legal fallout from McKinsey’s role in the opioid epidemic. In 2021, the company paid $573 million to 47 states, Washington, D.C., and U.S. territories, and separately committed $23 million to assist school districts affected by the crisis.
The opioid epidemic has claimed over 100,000 lives annually in recent years, with 75% of those fatalities linked to opioid use, according to the National Institutes of Health. OxyContin, Purdue Pharma’s flagship product, played a central role in fueling the addiction crisis.
Developments Surrounding Purdue Pharma
In June, the Supreme Court nullified a $6 billion bankruptcy settlement involving Purdue Pharma. The settlement, initially approved in 2021, sought to shield the Sackler family, who owned Purdue Pharma, from future lawsuits while compensating victims and creditors, including local governments, hospitals, and individuals. The ruling reopened the possibility of future legal action against the Sacklers.
McKinsey’s settlement underscores the ongoing legal reckoning tied to the opioid crisis and highlights the severe consequences for organizations complicit in exacerbating the epidemic.
