The McKinsey & Co. consulting firm has reached a $573 million settlement with 47 states over its work advising Purdue Pharma and other drug makers to aggressively market opioid painkillers.
This is the first national settlement to emerge from the massive opioid litigation filed by state, county, and local governments against opioid manufacturers over the past several years. The deal is also the first to result in a substantial payment to the states to address the epidemic. The funds will be used for prevention, treatment, and recovery efforts.
McKinsey contributed to the opioid crisis by selling marketing schemes and consulting services, according to court documents. As one example, the consulting giant helped Purdue design plans to “turbocharge” OxyContin sales during the height of the opioid crisis. The consulting firm dubbed the plan “Evolve 2 Excellence,” which significantly increased sales.
The McKinsey team also advised Purdue to consider paying rebates of up to $14,000 to health insurers for each patient harmed by OxyContin in order to maintain those crucial business relationships. The firm calculated OxyContin was involved in just 4% of overdose deaths or opioid use disorder diagnoses and estimated there were about 50 such incidents per 1 million people covered by health insurers.
The consulting giant also advised Purdue to focus on higher, more lucrative dosages and increased sales rep visits to high-volume opioid prescribers, to target doctors with specific messaging to convince them to prescribe more OxyContin to more patients, and to deliver OxyContin directly to patients through mail-order pharmacies to circumvent retail pharmacy restrictions on high dose, suspicious prescriptions.
McKinsey also encouraged opioid makers to “band together” to “defend against strict treatment” by the Food and Drug Administration on risk mitigation efforts that could have reduced high doses and saved lives, according to court documents. Ultimately, the FDA adopted a classwide risk strategy that resulted in high-dose OxyContin remaining subject to the same oversight as lower-dose opioids.
“Today’s agreement sets a new standard for accountability in one of the most devastating crises of our time,” said Massachusetts Attorney General Maura Healey, in a statement. “As a result, our communities will receive substantial resources for treatment, prevention, and recovery services, and families who have seen their loved ones hurt and killed by the opioid epidemic will have the truth exposed about McKinsey’s illegal and dangerous partnership with Purdue Pharma.”
In a statement, Kevin Sneader, global managing partner at McKinsey, said, “We chose to resolve this matter in order to provide fast, meaningful support to communities across the U.S. 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.”
Court documents noted that, in 2019, McKinsey announced that it no longer worked for Purdue or other opioid makers. But the states argued that “the harm created by McKinsey’s marketing plans for opioid manufacturers has not stopped.”
As part of the settlement, McKinsey is required to turn over tens of thousands of internal documents detailing its work for Purdue Pharma and other opioid companies for public disclosure online. The agreement also imposes court-ordered ethics rules that McKinsey must implement, including strict company-wide standards for document retention, and conflict disclosures on state contracts. The consulting firm also agreed to stop advising companies on potentially dangerous Schedule II and III narcotics.