Consulting Firm McKinsey Agrees to Pay $207 Million for its Role in the Opioid Epidemic
On Tuesday, consulting giant McKinsey agreed in filed documents to pay $207 million to settle claims it helped fuel the prescription opioid crisis. According to documents previously filed against the firm, McKinsey was hired by Purdue, the manufacturer of the drug OxyContin, and advised them on how to increase sales of the highly-addictive pain medication. Some tactics proposed by McKinsey and approved by Purdue were: 1) focusing sales calls to prescribers who wrote the most prescriptions, 2) emphasizing higher doses, and 3) offering direct distribution to patients and pharmacies. It was also alleged that once the epidemic had taken off, McKinsey identified the problem as a potential additional revenue stream and advised Purdue to take advantage of the opportunity by advancing drug abuse and addiction treatments, as well. And, in a twist of irony, plaintiffs alleged that while McKinsey was working for opioid companies, it was simultaneously advising other clients who were working to address the opioid crisis.
In 2019, McKinsey cut ties with Purdue, but the damage had already been done. Since then, McKinsey agreed to pay over $500 million to various states for its role in promoting the opioid crisis. This current agreement is to settle claims with various local governments who were not parties to any prior settlements. This current agreement must be approved by a judge before it can go into effect.
Although even the most principled counselors may err, these allegations underscore the need for ethical consulting. That is consulting without conflicts of interest, from true subject matter experts using a risk assessment/mitigation approach, and one that aims to minimize public harm.
References:
Rosenblatt, J. (2023, September 27). McKinsey agrees to pay $230m to settle suits claiming it fueled the opioid epidemic by advising drugmakers like Purdue how to sell painkillers. Fortune. https://fortune.com/2023/09/27/mckinsey-pay-230m-settle-suits-fueled-opioid-epidemic-advising-drugmakers-purdue-sell-painkillers/
See Complaint, Commonwealth of Massachusetts v. McKinsey & Company, Inc. United States, 15c, accessible at https://www.mass.gov/doc/massachusetts-mckinsey-complaint/download.
See Motion for Preliminary Approval of Class Action Settlement in Santa Cruz County, California et al. Individually and on Behalf of a Class of
Entities Similarly Situated, United States District Court for the Northern District of California Case No. 3:21-md-02996-CRB Document No. 598 (9/26/2023)