McKinsey reaches $573M settlement with 47 states for role in opioid epidemic

New York City-based consulting firm McKinsey on Feb. 4 agreed to pay $573 million to settle investigations into counsel it provided to Purdue Pharma and other opioid drugmakers.

Purdue Pharma pleaded guilty to three criminal charges related to the marketing and sales of OxyContin during a Nov. 24 hearing, in which the Justice Department noted that an undisclosed consulting company helped the drugmaker ramp up sales for the painkiller. Documents released in a New York federal bankruptcy court revealed that firm to be McKinsey.

The documents revealed McKinsey had advised the Sackler family, owners of Purdue Pharma, to "turbocharge" OxyContin sales during a time when the government and pharmaceutical industry was aware that hundreds of thousands of Americans had died from opioid overdoses. 

Included in the 160 pages of emails and slides is a McKinsey presentation from 2017 that suggested the drugmaker pay a rebate for every overdose attributable to OxyContin, estimating how many customers from distributors such as CVS or Anthem may overdose.

The firm also did opioid-related work with Johnson & Johnson, Endo International and Mallinckrodt Pharmaceuticals. Under the settlement agreement, McKinsey is paying significantly more than it earned from its work with any of its opioid-producing clients, a person involved in the settlement negotiations told The New York Times.

McKinsey must pay $478 million of the settlement within 60 days, and the money will be allocated for opioid treatment, prevention and recovery programs.

The firm reached the agreement with attorneys general in 47 states, Washington, D.C., and five U.S. territories. The states that are not included in the settlement are Washington, Nevada and West Virginia. Washington reached its own $13 million settlement with McKinsey, also filed Feb. 4.

McKinsey said it "believes its past work was lawful and has denied allegations to the contrary," in a Feb. 4 news release.

The firm accepted court-ordered restrictions on its opioid-related work, agrees to retain emails for five years and vows to disclose possible conflicts of interest when pursuing state contracts. It will also release tens of thousands of pages of documents regarding its opioid-related work into a database that is available to the public.

"We chose to resolve this matter in order to provide fast, meaningful support to communities across the United States," Kevin Sneader, McKinsey's global managing partner, said in a statement. "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."

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