McKinsey to pay $573M for role in opioid epidemic

The complaint describes how, from 2004 to 2019, McKinsey provided consulting services to opioid manufacturers—including OxyContin maker Purdue Pharma—and designed marketing schemes that directly contributed to the opioid crisis. According to the complaint, McKinsey allegedly advised Purdue on how to increase OxyContin sales “through physician targeting and specific messaging to prescribers.”

In one example, after conducting an analysis of Oxycontin growth opportunities for Purdue in 2013, McKinsey laid out new plans to increase sales, including, among other measures, “focus[ing] sales calls on high-volume opioid prescribers, including those who wrote as many as 25 times as many OxyContin scripts as their lower volume counterparts,” the complaint stated. Purdue ultimately approved the plan.

The complaint further describes how McKinsey provided consulting services to Purdue on how to circumvent pharmacy restrictions to deliver high-dose prescriptions. “These McKinsey strategies formed the pillars of Purdue’s sales tactics for the next 15 years,” the Delaware attorney general’s office said.

McKinsey continued to develop ways Purdue could increase sales of OxyContin well after the opioid epidemic peaked, the complaint continues: “At the same time McKinsey was working for opioid companies, McKinsey also consulted with governments and non-profits working to abate the raging opioid crisis—a crisis that McKinsey’s own research showed was caused in large part by prescription opioids.”

The complaint further alleges when states started filing lawsuits against Purdue’s directors for implementing McKinsey’s marketing schemes, two of McKinsey’s partners began destroying or deleting documents related to their work for Purdue.

Remedial measures

In addition to providing funds to address the crisis, the consent judgment calls for McKinsey to publicly disclose tens of thousands of internal documents detailing its work for Purdue Pharma, as well as for Endo Pharmaceuticals, Johnson & Johnson, and Mallinckrodt Pharmaceuticals.

In a press release in response to the settlement, McKinsey “reaffirmed the commitment it made two years ago not to advise clients on any opioid-related business anywhere in the world.” It continues to deny allegations that its past work was unlawful. “The settlement agreements themselves contain no admission of wrongdoing or liability,” the company said.

“We chose to resolve this matter in order to provide fast, meaningful support to communities across the United States,” said McKinsey Global Managing Partner Kevin Sneader. “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 United States.”

McKinsey said it has “significantly improved its risk and governance processes” over the last two years, including:

• Adopting what it described as a best-in-class client service policy to guide which clients the firm serves and on what topics;
• Adopting and enforcing a code of conduct;
• Strengthening and scaling up the firm’s control functions and hiring a new general counsel; and
• Enhancing the firm’s professional standards’ training and introducing an anonymous hotline.

Additionally, McKinsey said it terminated the two partners alleged to have destroyed or deleted documents relating to their work for Purdue, stating they violated the firm’s professional standards. “As I have said previously, we are determined to take the steps necessary to strengthen our firm’s risk management policies and culture,” Sneader said. “We will build on the steps we have already taken to learn from past mistakes and ensure we consistently meet the high standards our firm has always aspired to.”