BOSTON (AP) — Consulting firm McKinsey & Company has agreed to pay $650 million to settle a federal investigation into its work helping opioid maker Purdue Pharma boost sales of the highly addictive drug OxyContin, according to court documents filed in Virginia on Friday.
As part of the deal with the US Department of Justice, McKinsey will avoid criminal charges if it pays the sum and adheres to certain conditions for five years, including ceasing all sales, marketing or promotion activities controlled substances.
A former McKinsey senior partner, Martin Elling, has also agreed to plead guilty to obstruction of justice for deleting documents from his laptop after learning of investigations into Purdue Pharma, the maker of OxyContin that was then a customer was, according to the documents. An attorney for Elling declined to comment Friday.
McKinsey said in a statement Friday that it “deeply regrets” its work for Purdue Pharma.
“We should have realized the harm that opioids were causing in our society and should not have undertaken sales and marketing work for Purdue Pharma,” the company said. “This terrible public health crisis and our past work for opioid manufacturers will always be a source of deep regret for our company.”
It’s the latest attempt by federal prosecutors to hold companies accountable. Officials say this has fueled America’s addiction and overdose crisis, with opioids responsible for more than 80,000 annual deaths in recent years. Over the past decade, most of these have been attributed to illicit fentanyl, which is found in many illicit drugs. Earlier in the epidemic, prescription pills were the leading cause of death.
Over the past eight years, drugmakers, wholesalers and pharmacies have agreed to settlements worth about $50 billion with governments — with most of the money to be used to fight the crisis.
Purdue paid McKinsey more than $93 million over 15 years for various products, including how to improve OxyContin sales. Prosecutors say McKinsey knew “the risks and dangers” of OxyContin and that Purdue Pharma executives had previously pleaded guilty to crimes related to the drug’s promotion, but decided to work with the opioid manufacturer anyway.
One of McKinsey’s tasks, the papers said, was to identify which prescribers would generate the most additional prescriptions if Purdue salespeople focused on them. That resulted in prescriptions that were “not for a medically accepted indication, unsafe, ineffective and medically unnecessary, and were often diverted for use without a legitimate medical purpose,” the filing said.
“This was not hypothetical,” U.S. Attorney for the Western District of Virginia Christopher Kavanaugh said at a news conference in Boston on Friday. “This wasn’t just marketing. It was a strategy. It was implemented and it worked.”
During work to boost Purdue’s sales in 2013 after a sales slump, McKinsey consultants accompanied Purdue sales representatives on visits to prescribers and pharmacies to gather information. In a note about a ride, a McKinsey consultant said a pharmacist had a gun “and was shaking; Abuse is definitely a big problem.” According to court documents, the company continued to look for ways to increase sales of OxyContin.
In 2014, McKinsey identified several small clinics that wrote more opioid prescriptions than entire hospital systems — and suggested they would be targeted for more turnover, the court said.
The company also tried to help Purdue get a say in shaping federal rules intended to ensure that the benefits of addictive prescription drugs outweighed the risks. The government said in its new documents that this resulted in high-dose OxyContin being subject to the same oversight as lower-dose opioids, and training for prescribers was made voluntary rather than mandatory.
Since 2021, McKinsey has agreed to pay state and local governments about $765 million in settlements for their role in advising companies on how to sell more powerful prescription painkillers amid a national opioid crisis.
The company also agreed last year to pay health care funds and insurance companies $78 million.
Federal authorities say the deal marks the first time a management consulting firm has been held responsible in this way for advising a client to break the law.
“If a consulting firm first conspires with a client to engage in criminal conduct, being an outside consultant will not protect you,” said Joshua Levy, the U.S. attorney for Massachusetts.
Some advocates say the opioid crisis began when Purdue Pharma’s OxyContin hit the market in 1996.
Three Purdue executives pleaded guilty in 2007 to misbranding charges and the company agreed to pay a fine. The company pleaded guilty to criminal charges in 2020 and agreed to $8.3 billion in fines and forfeitures — most of which will be forgiven as long as it reaches a settlement through bankruptcy court that is still in the works.
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Durkin Richer reported from Washington and Mulvihill from Cherry Hill, New Jersey.
