McKinsey agrees $600m settlement over role in opioids crisis

Business consultancy McKinsey has agreed to pay nearly $600m for its role in consulting businesses on how to sell more prescription opioid painkillers amid a 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 on Thursday, adding “with this agreement, we hope to be part of the solution to the opioid crisis in the US.”

Most of the money is in a $573m settlement reached with 47 states, the District of Columbia and five US territories, but the company said it had deals with a total of 49 states.

Washington’s attorney general announced a separate $13.5m deal, and West Virginia has an opioid-related announcement scheduled for Thursday.

The only remaining state that has not announced a deal with the company is Nevada.

Most of the payments will come within the next two months under the multi-state agreement.

The payments are earmarked for abating the raging overdose and addiction crisis that has deepened during the coronavirus pandemic.

Opioids, which include prescription drugs such as OxyContin and its generic cousins based on the narcotic active ingredient oxycodone, and illegal substances such as heroin and illicit fentanyl, have been linked to more than 470,000 deaths in the US 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 attorney general Mark Brnovich said in a statement.

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 a bankruptcy court in New York.

They showed the company long worked with Purdue to boost sales even as the extent of the opioid epidemic became clear.

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 attorney general 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 health care settings as well as in jails plus programs like needle exchanges aimed at reducing the harm of drug use.

In a statement, New Jersey attorney general 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,” he said.

Under the multi-state 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.

The company, which announced two years ago that it would not advise clients on opioid-related businesses, said it has terminated two of its partners for communicating about deleting documents.

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, certain members of the Sackler family who own the company, agreed to pay $225 million in a civil settlement, but admitted no wrongdoing.

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Another settlement has long been in the works involving the largest US drug distribution companies and Johnson & Johnson.

On the call Thursday, California attorney general Xavier Becerra called them collectively “the opioid machine.”