McKinsey settles for more than $ 573 million in opioid crisis

McKinsey & Company, an advisor to blue-chip corporations and governments around the world, has agreed to pay $ 573 million to help in the investigation “.TurbochargedOpioid sales, a rare example of this, are being held publicly accountable for their work with customers.

According to five people familiar with the negotiations, the firm has tie-ups with the Attorney General of 47 states, the District of Columbia and five regions. The lawsuits were revealed after the trial, which showed how McKinsey’s sales of Purdue Pharma’s OxyContin painkiller work contributed to the deaths of more than 450,000 people over the past two decades amid an opioid epidemic in the United States did.

McKinsey’s extensive work with Percu included advising to focus on selling attractive high-dose pills, documents show, even after the drugmaker pleaded guilty in federal criminal charges in 2007 to the risk of oxyopept The doctors and regulators were misled. The firm also told Purdue that it could “band” with other opioid manufacturers to face “strict treatment” by the Food and Drug Administration.

The consulting firm will not admit wrongdoings in the settlement, to be filed in state courts on Thursday, but it prohibits court orders on its work with certain types of intoxicating narcotics, according to people familiar with the arrangement Will agree to apply. McKinsey will also maintain the email for five years and disclose potential conflicts when bidding for state contracts. And in a move similar to the tobacco industry settlements decades ago, it would put thousands of pages of documents related to its opioid work on a publicly available database.

The states used civil penalties – $ 478 million of which must be paid within 60 days – for opioid treatment, prevention and recovery programs, the people said. This will be the first money since Purdue Pharma agreed to pay $ 8.3 billion in October Confess offense Federal criminal charges on the marketing of OxyCopt. Purdue declared bankruptcy, meaning the party to that agreement would have to line up with other creditors.

Separately, members of the Sackler family, who own Purdue, agreed last fall to pay the federal government $ 225 million in civil penalties, And are negotiating with other litigants to pay $ 3 billion.

Many states were dissatisfied with the October deal, which was reached just days before the Trump administration’s Justice Department defeated the former president in the November election.

The amount that McKinsey is paying is substantially more than the income earned from work with Purdue or Johnson & Johnson, Endo International and Mallinckrodt Pharmaceuticals along with its other opioid-producing customers.

A spokesperson for the firm did not immediately respond to requests for comment.

A former partner called the settlement extremely important because it shattered McKinsey’s distance – arguing that it only makes recommendations – between his advice and his clients’ actions. For decades, the firm has avoided legal liability for the high-profile failures of some customers, including energy company Enron and Swissair, Switzerland’s deflected national airline. The former partner asked for anonymity because McKinsey’s former employees are bound by the confidentiality agreement.

Making McKinsey and its rivals even more sensitive is the fact that in recent years they have aggressively moved into a new line of work, providing not only management advice but also helping companies implement their suggestions are doing.

McKinsey’s material released in litigation over the last two years goes back to 2004 and as recently as 2019.

The records highlight McKinsey’s close relationship with Purdue over the years. In 2009, the firm wrote a report for Purdue stating that the new sales strategy would increase Oxikopt’s sales by $ 400 million annually, and suggested “sales’ drivers based on the idea that opioid would reduce stress And make patients more positive and less isolated. “According to a lawsuit filed by Massachusetts in 2018. McKinsey described ways to combat emotional messages from mothers with teenagers eating” on drugs “with Purdue officials Worked in searching.

In 2013, the federal government entered into an agreement with pharmacy chain Valgrens to clamp down on illegal opioid prescriptions. Sales of Walgreens began to decline. According to the Massachusetts lawsuit, McKinsey recommended that Purdue “lobby lobbyists to loosen leaders.”

And in a 2017 slide presentation, McKinsey offered several options to increase sales. One of the distributors of Purdue was A. To exempt Every OxyCopt overdose is due to the pills they sold. The slides are notable for their fine detail. For example, McKinsey estimated that 2,484 CVS customers would overdose or develop an opioid use disorder in 2019 by taking oxyopept. CVS stated that the scheme was never implemented.

By 2018, McKinsey’s senior executives were becoming aware that they might face liability for their opioid work. After Massachusetts, Martin Alling, a leader in the firm’s pharmaceutical practice, wrote to another partner, Arnab Ghatak: “Perhaps it makes sense to have a quick chat with the Risk Committee about whether we should do anything else” Destroy all documents and emails. No doubt, but as things get harder, someone can change for us. “

McKinsey’s North America managing partner Liz Hilton Segel said in a letter to Congress in December that the two men were held pending the results of an administrative investigation into any material being destroyed. That month, McKinsey released a rare Public apology For its work on opioids.

“As we look at our customer service during the opioid crisis, we recognize that we have not adequately exposed the epidemic in our communities or the terrible impact of opioid abuse and addiction on millions of families across the country.” The company said a statement. The firm later changed the statement to read “misuse” rather than “misuse”.

The agreement with 47 states – Nevada, Washington and West Virginia – was not in its favor – does not preclude the Biden administration from taking legal action against McKinsey. Additionally, several counties and cities across the country – including Mingo County in West Virginia, one of the states most hit by the opioid crisis – have sued McKinsey in recent times.

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