Consulting firm McKinsey agrees to pay nearly $600 million for role in opioid crisis
The global business consulting firm McKinsey & Co. has agreed to pay nearly $600 million for its role in advising companies on how to sell more prescription opioid painkillers amid the nationwide overdose crisis.
“We deeply regret that we did not adequately acknowledge the tragic consequences of the epidemic unfolding in our communities,” McKinsey Global managing partner Kevin Sneader said in a statement Thursday, noting that the company cooperated with investigations. ”With this agreement, we hope to be part of the solution to the opioid crisis in the U.S.”
The company said it had deals in place with attorneys general for 49 states, the District of Columbia and five U.S. territories. Under details provided by states, 47 of the states, the District of Columbia and the territories will share $573 million, which also includes $15 million for the National Assn. of Attorneys General. Washington state announced a separate $13.5-million deal Thursday, and West Virginia said it would have a major opioid-related announcement, too.
Most of the payments will come within the next two months under the multistate agreement, and the money is earmarked for abating the raging overdose and addiction crisis, which has deepened during the coronavirus pandemic. Opioids, which include prescription drugs and illegal substances such as heroin and fentanyl, have been linked to more than 470,000 deaths in the U.S. since 2000.
“Even though no amount of money can bring back the lives lost, I hope our settlement provides funding for programs to help those battling opioid addiction,” Arizona Atty. Gen. Mark Brnovich said in a statement Thursday.
McKinsey’s role in the opioid crisis came into focus in recent months in legal documents that were made public as part of OxyContin maker Purdue Pharma‘s efforts to settle claims against it through bankruptcy court. The documents showed that McKinsey long worked with Purdue to boost sales even as the extent of the opioid epidemic became clear.
The Justice Department is accusing Walmart of unlawfully dispensing controlled substances through its pharmacies, helping to fuel the opioid crisis.
Some documents showed it was trying to “supercharge” flagging OxyContin sales in 2013. Its efforts over the years included encouraging Purdue sales representatives to focus on doctors who already prescribed high volumes of OxyContin and to try to move patients to more potent doses of the drug.
On a video call with journalists Thursday, North Carolina Atty. Gen. Josh Stein said that McKinsey worked for Purdue for 15 years.
“McKinsey’s efforts worked. The number of pills prescribed, Purdue’s profits and McKinsey’s fees all skyrocketed,” said Stein, whose state stands to receive nearly $19 million in the settlement. “But so did the number of overdoses.”
Stein said the settlement funds could go toward addiction treatment in healthcare settings and in jails, and toward programs like needle exchanges aimed at reducing the harm of drug use.
A panel of government advisors says there’s no clear evidence that a harder-to-crush version of the painkiller OxyContin resulted in fewer drug overdoses
In a statement, New Jersey Atty. Gen. Gurbir Grewal said that McKinsey would pay out more than it made advising companies on opioid sales.
“We are continuing to deliver on our promise to hold accountable the corporations and executives whose bad acts contributed to the opioid epidemic that has brought so much despair to our communities,” Grewal said.
Under the multistate deal, McKinsey agreed to make public all its communications with Purdue, plus those dealing with the opioid businesses of the pharmaceutical companies Endo, Johnson & Johnson and Mallinckrodt.
McKinsey, which announced two years ago that it would not advise clients on opioid-related businesses, said it had terminated two partners for communicating about deleting documents. It also said it would hire a new general counsel with a deep background in ethics and boost standards training for its employees.
The company agreed to plead guilty in a settlement that doesn’t begin to make up for the harm it has caused.
Although McKinsey emerged as a target of opioid investigations recently, there have been thousands of lawsuits filed by government entities against companies that make and distribute prescription drugs. Some of those could go to trial this year.
Other settlements have happened or are in the works, including with Purdue, which is attempting to settle with state and local governments after reaching a deal last year to plead guilty to federal criminal charges and settle a civil case. Separately, members of the Sackler family who own the company agreed to pay $225 million in a civil settlement but admitted no wrongdoing.
Another settlement has long been in the works involving the largest U.S. drug-distribution companies and Johnson & Johnson. On the call Thursday, California Atty. Gen. Xavier Becerra called them collectively “the opioid machine.”
“It’s not the last deal and it’s not the biggest of the settlements and actions that we as a collective of states will take,” he said.
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