McKinsey reached an undisclosed deal with school districts and local governments concerning it’s role in the opioid crisis.
McKinsey & Company, the long-time drug consulting firm headquartered in New York, has agreed to settle hundreds of cases brought by U.S. local governments and school district alleging the firm played a role in fueling the opioid crisis. The deal was unsealed in a court filing in a San Francisco federal court late last month. The terms weren’t made public.
In 2021, McKinsey paid out $641 million in claims from U.S. states saying the consulting firm provided marketing strategy services to Purdue Pharma, Johnson & Johnson and others. McKinsey did not admit to any wrongdoing. Then, in May of this year, the head of McKinsey & Company denied the consulting firm illegally concealed its work for Purdue Pharma while simultaneously acting as an advisor for the Food and Drug Administration (FDA).
Since 2008, McKinsey consulted for the FDA’s drug regulation division and has been involved in numerous FDA projects. The FDA maintains it did not know McKinsey was simultaneously working for the Oxycontin maker. The chair of the House oversight committee, Carolyn Maloney, called the firm’s conduct “among the worst I have seen in my years in government. At the same time the FDA was relying on McKinsey’s advice to ensure drug safety and protect American lives, the firm was also being paid by the very companies fueling the deadly opioid epidemic to help them avoid tougher regulation of these dangerous drugs.”
As part of the consulting firm’s advisory work, a September 2013 rolled out a presentation slide outlining a “Wildfire” sales strategy for OxyContin which included proposed cash prizes for top performing sales reps. The meeting “went very well – the room was filled with only family, including the elder statesman Dr. Raymond,” wrote Arnab Ghatak, a senior partner at the firm, at the time. Martin Elling, leader for McKinsey’s North American pharmaceutical practice, added, “By the end of the meeting, the findings were crystal clear to everyone and they gave a ringing endorsement of moving forward fast.”
In a 2017 presentation made to Purdue executives, McKinsey suggested that the company give its distributors a rebate for every overdose attributable to the OxyContin. As part of the presentation, the consulting firm demonstrated how many customers of large companies, including CVS Pharmacy and the insurance company Anthem, might overdose. The slides indicated, for example, in 2018, “2,484 CVS customers would either have an overdose or develop an opioid use disorder (OUD).” Thus, McKinsey demonstrated a rebate of “$14,810 per event equated to paying CVS $36.8 million that year.” These presentations made it clear that McKinsey was aware of the potential for users of OxyContin to overdose but continued to brainstorm ways that Purdue could get around any backlash.
Purdue is currently in bankruptcy after having reached a nationwide settlement agreement concerning the opioid cases against it earlier this year in which the Sackler family members have been made to contribute as much as $6 billion in cash for allegedly fueling the crisis. In addition to the ongoing opioid cases, McKinsey is also currently undergoing a federal investigation into its role in the opioid epidemic, which has been linked to 500,000 deaths, according to the Centers for Disease Control and Prevention (CDC).