Settlement marks a significant response to the firm's involvement in the escalating US opioid epidemic
McKinsey to Pay $650 Million to Resolve Opioid Crisis Charges
McKinsey to Pay $650 Million to Resolve Opioid Crisis Charges
Consulting firm admits to role in aiding Purdue Pharma’s misleading marketing tactics
In a landmark decision, consulting giant McKinsey & Company has consented to a $650 million (£515 million) settlement to resolve criminal charges associated with its complicity in the United States’ opioid crisis. According to the US Department of Justice, McKinsey "knowingly and intentionally" collaborated with Purdue Pharma, the manufacturer of OxyContin, to aid in the misbranding of prescription medications without valid prescriptions.
Several allegations against McKinsey included conspiring to misbrand drugs and obstructing justice, with prosecutors asserting that the consulting firm provided Purdue with strategies to significantly boost sales of the opioid painkiller OxyContin. In acknowledging its mistakes, McKinsey released a statement expressing regret, indicating, “we should have appreciated the harm opioids were causing in our society.”
Additionally, Martin Elling, a former senior partner at McKinsey, is reportedly facing charges of obstruction for allegedly destroying key documents linked to this case. The settlement comes alongside a deferred prosecution agreement with the US Department of Justice, allowing for the suspension of formal charges for up to five years, contingent on McKinsey meeting specified reform-related conditions during that period.
Prior to this settlement, McKinsey had already incurred nearly $1 billion (£792 million) in litigation costs due to its involvement with Purdue Pharma and other pharmaceutical companies. Purdue Pharma entered a guilty plea to criminal charges in 2020, resulting in an extensive $8.3 billion (£6.6 billion) settlement and admitting to supplying medications "without legitimate medical purpose."
Since OxyContin's introduction in the mid-1990s, its role in the opioid epidemic has been profound, with studies indicating that by 2002, it constituted 68% of oxycodone sales. The subsequent surge in drug addiction and overdose deaths across the United States has been alarming, with prescription opioids initially fueling the crisis, which has now been compounded by the prevalence of heroin and synthetic opioids such as fentanyl. In the latest statistics, nearly 100,000 individuals die annually from drug overdoses in the US, though recent reports indicate a 14% reduction in overdose deaths from the previous year.
Several allegations against McKinsey included conspiring to misbrand drugs and obstructing justice, with prosecutors asserting that the consulting firm provided Purdue with strategies to significantly boost sales of the opioid painkiller OxyContin. In acknowledging its mistakes, McKinsey released a statement expressing regret, indicating, “we should have appreciated the harm opioids were causing in our society.”
Additionally, Martin Elling, a former senior partner at McKinsey, is reportedly facing charges of obstruction for allegedly destroying key documents linked to this case. The settlement comes alongside a deferred prosecution agreement with the US Department of Justice, allowing for the suspension of formal charges for up to five years, contingent on McKinsey meeting specified reform-related conditions during that period.
Prior to this settlement, McKinsey had already incurred nearly $1 billion (£792 million) in litigation costs due to its involvement with Purdue Pharma and other pharmaceutical companies. Purdue Pharma entered a guilty plea to criminal charges in 2020, resulting in an extensive $8.3 billion (£6.6 billion) settlement and admitting to supplying medications "without legitimate medical purpose."
Since OxyContin's introduction in the mid-1990s, its role in the opioid epidemic has been profound, with studies indicating that by 2002, it constituted 68% of oxycodone sales. The subsequent surge in drug addiction and overdose deaths across the United States has been alarming, with prescription opioids initially fueling the crisis, which has now been compounded by the prevalence of heroin and synthetic opioids such as fentanyl. In the latest statistics, nearly 100,000 individuals die annually from drug overdoses in the US, though recent reports indicate a 14% reduction in overdose deaths from the previous year.
