Avoided opioid litigation: McKinsey shells out $650 million
In the '90s, Purdue Pharma, a notable pharmaceutical company, collaborated with McKinsey to introduce OxyContin, a painkiller, in the US. This move resulted in hundreds of thousands of fatalities due to opioid abuse. Consequently, McKinsey found itself under pressure and agreed to pay a hefty sum of $650 million (approximately €619 million) to settle allegations regarding its support for Purdue. This settlement was a part of an agreement with the US Department of Justice in a Virginia federal court, allowing McKinsey to avoid criminal charges, according to court documents.
Over a period of five years, McKinsey will make these payments. Additionally, they will abstain from any involvement in the sale and marketing of controlled substances during this span. Previously, McKinsey had agreed to pay over $1 billion to settle various lawsuits and legal disputes related to this matter. In 2019, McKinsey decided to cease advising clients on opioid-related businesses, asserting that none of its settlements contained admissions of liability or misconduct.
Court records reveal that Purdue paid McKinsey over $93 million over a 15-year period, mainly for increasing Oxycodone sales, a potent painkiller with high addiction potential. McKinsey was instructed to identify doctors who could be persuaded by Purdue's representatives to issue excess prescriptions. Consequently, prescriptions were issued without medical necessity, uncertainty, ineffectiveness, and medical irrelevance. McKinsey representatives have yet to comment on this request.
A senior McKinsey partner was accused of obstructing justice and deleting documents from his laptop after learning about investigations against Purdue Pharma.
Some healthcare professionals cooperate
Court records also suggest that McKinsey attempted to influence federal regulations on Purdue's behalf. These actions led to high-dose Oxycodone receiving the same scrutiny as lower-dose opioids, and mandatory doctor training being replaced with voluntary training.
Since 2021, McKinsey has agreed to pay around $765 million to state and local governments due to its role in selling powerful prescription painkillers. Health insurers and insurance companies are set to receive an additional $78 million.
Over 80,000 deaths from addiction have been reported in the US in recent years. The majority of these deaths in the past decade have been linked to illegal fentanyl, often mixed with other substances. At the beginning of the crisis, prescription drugs were the primary cause of death. Some experts attribute the crisis to the introduction of OxyContin by Purdue Pharma in 1996.
According to reports by U.S. health authorities, between 1999 and 2021, over 645,000 people in the U.S. died from opioid overdoses. Numerous lawsuits were filed against pharmaceutical companies, accusing them of downplaying the risks of painkillers. Pharmacies and retailers were also implicated for disregarding signs of illegal trafficking of these drugs. In 2020, the company agreed to pay fines totaling $8.3 billion, with most of these amounts being deferred while a settlement is pending in bankruptcy court.
The collaboration between Purdue Pharma and McKinsey led to the introduction of OxyContin, a painkiller, which unfortunately contributed to hundreds of thousands of opioid-related fatalities. After facing pressure, McKinsey agreed to pay a significant sum due to allegations related to their support for Purdue, admitting that they were instrumental in increasing Oxycodone sales, a potent painkiller with high addiction potential.
