McKinsey & Company suggests Purdue offer rebates for OxyContin overdoses.
Records recently released in a federal bankruptcy court in New York show that Purdue Pharma’s adviser responsible for driving OxyContin sales was consulting firm McKinsey & Company, and hundreds of documents now show the firm’s plans to “turbocharge” the sale of the addictive pain medication.
In a 2017 presentation, according to court records, McKinsey suggested Purdue give its distributors a rebate for every OxyContin overdose attributable to the OxyContin they sold. 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 indicate, 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.”
After Massachusetts filed a lawsuit against Purdue in 2018, Martin Elling, a leader for McKinsey’s North American pharmaceutical practice, wrote to another senior partner, Arnab Ghatak, “It probably makes sense to have a quick conversation with the risk committee to see if we should be doing anything other than eliminating all our documents and emails. Suspect not but as things get tougher there someone might turn to us.” To date, the Justice Department has not pursued litigation against McKinsey, but these exchanges suggest the company was taking steps to protect itself.
In 2013, court documents show the same two executives emailed colleagues about a meeting with members of the Sackler family to drive up sales of OxyContin through an aggressive marketing campaign. The meeting “went very well – the room was filled with only family, including the elder statesman Dr. Raymond,” wrote Ghatak. Elling added, “By the end of the meeting, the findings were crystal clear to everyone and they gave a ringing endorsement of moving forward fast.”
Four years later, in 2017, Purdue’s chief executive, Craig Landau, wrote that the opioid epidemic was caused by “too many Rxs being written at too high a dose” and “for too long.” The pain pills, he said, “were being prescribed for conditions that often don’t require them by physicians who lacked the requisite training in how to use them appropriately.”
McKinsey was eventually asked to stop pursuing the marketing campaign and Landau was quoted as saying “we should have done (this) five years ago.”
Whether the consulting firm will be the subject of litigation remains unseen. However, Purdue has pleaded guilty to criminal allegations, including fraud charges and paying illegal physician kickbacks. It is slated to pay out $8.3 billion in fines, and members of the Sackler family will pay $225 million in civil penalties. Internal emails, presentations, and financial charts released effectively showed how members of the Sackler family “treated one of its opioids as a cash cow,” according to records, and withdrew approximately $10 billion from Purdue since 2008.
“This is the banality of evil, MBA edition,” Anand Giridharadas, a former McKinsey consultant said of the company’s involvement with Purdue. “They knew what was going on. And they found a way to look past it, through it, around it, so as to answer the only questions they cared about: how to make the client money and, when the walls closed in, how to protect themselves.”