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McKinsey is paying, again, for its role in the opioid crisis

December 13, 2024

The American consulting firm McKinsey will pay $650 million in a settlement with the United States government to, once again, avoid a trial linked to its role in the opioid crisis that has killed nearly 800,000 people since 1999.

The so-called deferred prosecution agreement (DPA), filed Friday in a federal court in Virginia, aims to end criminal proceedings after five years of supervision.

The prestigious firm was accused of contributing to the opioid crisis by advising pharmaceutical groups such as Purdue Pharma, maker of the painkiller OxyContin.

He admitted to "knowingly and intentionally conspiring with Purdue Pharma and others to aid and abet the provision of prescription drug miscommunication," the lawsuit states.

And also of having, "through the actions of a senior McKinsey official, knowingly destroyed and concealed archives and documents" to obstruct investigations.

The group dismissed two employees shortly after the scandal broke for destroying documents in this affair.

The DPA also specifies that McKinsey has already paid out nearly a billion dollars in several out-of-court settlements since 2019 in the United States.

"We are deeply sorry for our service to our former client Purdue Pharma and for the actions of a former manager who destroyed documents," McKinsey said in a statement.

"This terrible public health crisis and our work being seen as opiate manufacturers will always be a source of deep regret," he continued, stressing that he had accepted in the DPA "responsibility for (his) conduct."

This agreement "closes this chapter of McKinsey's history."

Virginia Attorney General Chris Cavanaugh, speaking at a news conference with state attorneys and investigators, noted that this was "the first consulting firm to be held criminally liable for advice that led to a crime by its client."

– No narcotics –

McKinsey committed several years ago to no longer advise companies on the development, manufacture, promotion, marketing, sale or use of an opiate or any other narcotic.

He had notably advised Purdue Pharma to help it boost sales of OxyContin after a sales slump, a strategy called "TurboCharge," according to Mr. Cavanaugh.

According to him, the 650 million DPA represents 85 times the fees received by the firm within the framework of this strategic mission.

The firm also recommended that Purdue – which abandoned opioids in 2018 – focus on high doses, considered the most lucrative but highly addictive.

Overprescription of the drug is widely credited with sparking the opioid crisis in the United States.

According to data from the Centers for Disease Control and Prevention (CDC), more than 700,000 people died in the country between 1999 and 2022 from an overdose linked to taking opiates, obtained by prescription or illegally.

For the first time since 2018, the number of deaths linked to opioids (mainly fentanyl) decreased slightly in 2023.

Hit by an avalanche of lawsuits, the Purdue laboratory declared bankruptcy in 2019 but has faced several court rejections of its bankruptcy plan.

He appealed to the Supreme Court in Washington, but the court overturned the latest version at the end of June, which provided for the creation of a new entity and the payment of at least 5.5 billion dollars over eighteen years.

The Sages said the plan would exempt the Sackler family, which owns Purdue, from any future lawsuits from victims. The Sacklers are accused of aggressively promoting OxyContin despite knowing it was highly addictive, which earned them tens of billions of dollars.

Major drug distributors such as CVS, Walgreens and Walmart, as well as a subsidiary of French advertising giant Publicis, have also been sued for their role in the crisis.

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