Law & the Courts

McKinsey to Pay $573 Million Settlement to States over Opioid Advice

A pharmacist holds 40mg pills of OxyContin, made by Purdue Pharma. (George Frey/Reuters)

McKinsey & Company has reached a $573 million settlement with states over the consulting firm’s role in advising Purdue Pharma and other drug manufacturers to aggressively market opioid painkillers.

The deal struck between the consulting firm and 47 states and the District of Columbia, will stave off civil lawsuits that attorneys general could bring against the company, according to the Wall Street Journal.

Most of the money will be divided among the participating states and will be paid out immediately, with the rest distributed in four yearly payments beginning next year. Fifteen million will go to the National Association of Attorneys General to reimburse it for the cost of the investigation.

The settlement, which contains no admission of wrongdoing or liability, will also require McKinsey to create a repository of documents related to its work for opioid makers, the report said.

The settlement comes as state and local governments sue companies across the opioid supply chain as the opioid crisis continues to devastate America; At least 400,000 people have died in the U.S. from overdoses of legal and illegal opioids since 1999, federal data show.

The consulting firm stopped doing opioid-related work in 2019 and said its work for Purdue, the maker of OxyContin, was done with the goal of supporting the legal use of opioids and helping patients with medical needs.

Hundreds of exhibits detailing McKinsey’s efforts to increase OxyContin sales were made public in recent months during Purdue’s chapter eleven bankruptcy case.

Documents show McKinsey in 2013 recommended to Purdue executives that the company’s sales team target health care providers it knew wrote the most OxyContin prescriptions and move away from those who wrote fewer prescriptions. The tactic evolved into a Purdue initiative called “Evolve to Excellence.”

McKinsey said its recommendations that year would increase its annual sales by more than $100 million, according to bankruptcy court records. The consulting firm suggested Purdue could better target “higher value” prescribers and take other steps to “Turbocharge Purdue’s Sales Engine.” 

Purdue pleaded guilty in November to three felonies, including paying illegal kickbacks and misleading drug-enforcement officials. 

Court documents released in November showed that McKinsey advised the Sackler family, owners of Purdue Pharma, on how to boost sales of OxyContin even as overdose deaths from the opioid painkiller spiked across the U.S.

McKinsey recommended several possible strategies, one of which was to give rebates to pharmacies for every overdose and case of addiction among their customers, according to the New York Times.

The rebates would total $14,810 per overdose for pills sold at CVS or Anthem, though both companies denied ever receiving rebates for overdoses.

McKinsey also offered guidance to other opioid makers on sales, including Johnson & Johnson. Oklahoma sued Johnson & Johnson in 2019 for its aggressive marketing of prescription painkillers in the state, resulting in a $572 million verdict against the drugmaker, which was later reduced to $465 million and is still on appeal.

Kevin Sneader, Global Managing Partner of McKinsey, said in a statement that the firm chose to settle “in order to provide fast, meaningful support to communities across the United States.”

“We deeply regret that we did not adequately acknowledge the tragic consequences of the epidemic unfolding in our communities,” the statement adds. “With this agreement, we hope to be part of the solution to the opioid crisis in the U.S.”

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