Pharmaceutical consulting firm settles opioid litigation for nearly $600 million.
McKinsey & Company has agreed to a $573 million multi-state settlement to resolve allegations it advised businesses on how to sell more prescription opioids, fueling the addiction crisis. Forty-seven states, the District of Columbia and five U.S. territories will receive the pay out while Washington’s attorney general announced a separate $13.5 million settlement and West Virginia announced a $10 million settlement with the consulting firm. Nevada is the only state that has yet to announce a deal. Its attorney general is continuing the state’s investigation and negotiations.
McKinsey’s role in the overdose epidemic became apparent as legal documents were made public in Purdue Pharma’s settle claims against the firm in bankruptcy court. It had worked closely with the company for years to help boost profits, and McKinsey consultants, in 2013, suggested ways that Purdue could “turbocharge sales of its OxyContin,” according to the 2019 complaint filed by the Massachusetts attorney general. OxyContin was Purdue’s biggest money-maker, so it would only make sense for Purdue’s consulting firm to focus on it, but that didn’t shield McKinsey from being held responsible for the crisis.
“McKinsey’s efforts worked. The number of pills prescribed, Purdue’s profits and McKinsey’s fees all skyrocketed,” said North Carolina Attorney General Josh Stein, whose state will receive nearly $19 million. “But so did the number of overdoses.” Stein indicated McKinsey worked for Purdue for roughly fifteen years, mainly focusing on its bread-and-butter product.
Under the multi-state deal, McKinsey agreed to make public all its communications with Purdue over the year, in addition to its work with Endo Pharmaceuticals, Mallinckrodt, and Johnson & Johnson.
Other attorneys general weighed in after the deal had been announced.
“Even though no amount of money can bring back the lives lost, I hope our settlement provides funding for programs to help those battling opioid addiction,” Arizona Attorney General Mark Brnovich said following the settlement.
“We are continuing to deliver on our promise to hold accountable the corporations and executives whose bad acts contributed to the opioid epidemic that has brought so much despair to our communities,” New Jersey Attorney General Gurbir Grewal said.
Colorado Attorney General Phil Weiser was pleased with how quickly the company chose to settle the matter. “They are the first company to work with the states to fix the problem rather than deny their conduct and engage in protracted litigation or delay,” he said. “Their approach provides a model for other companies to follow to focus our energy on fixing the problem rather than making excuses or blaming others.”
“Today’s focus is on opioids,” McKinsey Global Managing Partner Kevin Sneader wrote in a communication to McKinsey employees, “but we have also faced other issues that have made clear the importance of improving how we act everywhere that we operate.”
He added in a statement to the public following the multi-state settlement, “We deeply regret that we did not adequately acknowledge the tragic consequences of the epidemic unfolding in our communities. With this agreement, we hope to be part of the solution to the opioid crisis in the U.S.”