McKinsey under criminal investigation over opioid-related consulting
Consulting firm’s advice to makers of Oxycontin, other opioid products under investigation
The Justice Department is conducting a criminal investigation into consulting firm McKinsey related to its past role in advising some of the nation’s largest opioid manufacturers on how to boost sales.
Federal prosecutors are also probing whether McKinsey or any of its employees may have obstructed justice in relation to records of its consulting services for opioid producers, according to people familiar with the investigation, which has been ongoing for several years.
A grand jury has been empaneled in Virginia as part of the federal investigation into McKinsey’s opioid-related consulting, some of the people said. The U.S. attorney’s offices in the Western District of Virginia and the District of Massachusetts are jointly conducting the investigation, the people said. McKinsey declined to comment . The criminal probe centers on consulting advice McKinsey gave to drugmaker clients including Purdue, Endo International and Mallinckrodt that previously sparked mass civil litigation against the firm. Government and private plaintiffs filed hundreds of civil lawsuits in recent years accusing the consulting firm of exacerbating opioid addiction, an allegation that McKinsey has denied.
In 2021, McKinsey reached a settlement with all 50 states, five U.S. territories, and Washington, D.C., to pay $642 million to resolve civil opioid-related litigation against the firm, without admitting wrongdoing.
The firm in 2023 reached separate deals totaling $347 million with Native American tribes, public school districts, insurance companies and municipal governments, also without admitting wrongdoing.
In the settlement with state attorneys general, McKinsey said that “in order to achieve finality and avoid the inherent cost and risk of litigating in venues across the country, McKinsey chose to be part of the solution to a complex public health crisis,” by contributing to opioid-abatement efforts without admitting liability.
McKinsey’s former clients Purdue, Endo, and Mallinckrodt filed for chapter 11 bankruptcy while facing mass lawsuits alleging they sold drugs through misleading marketing practices and fueled addiction. McKinsey helped Purdue, the closely held maker of the painkiller OxyContin, develop an initiative to boost drug sales and marketing , according to records released after Purdue went bankrupt in 2019.
McKinsey consultants advised the company on how to increase sales of its flagship drug , including suggesting that Purdue’s sales team make more calls to healthcare providers it knew wrote high volumes of OxyContin prescriptions and spend less time on doctors who prescribed the opioid medication the least, the records showed.
In August 2013, consultants from the firm sent a memo to Purdue executives with 20 recommendations they said would boost sales of OxyContin by more than $100 million annually. McKinsey advised Purdue that there was “significant opportunity” to shift sales calls to the highest volume prescribers, who as a group wrote 25 times as many OxyContin prescriptions on average than their peers, according to the memo, included in unsealed court records.
McKinsey previously said it stopped doing work on opioid-specific businesses in 2019 and that its work for Purdue was intended to support the legal use of opioids and patients with legitimate medical needs.
McKinsey also advised Purdue and Endo on how to target the U.S. Department of Veterans Affairs for sales of their products, according to documents made public through the firm’s settlements with state and local governments. This advisory work occurred while McKinsey was simultaneously working as a conget. sultant for the VA itself. McKinsey has said that it advised the VA on matters unrelated to opioid procurement.
Pharmaceutical companies began marketing opioids as a safe-to-use pain reliever in the 1990s, leading many doctors to prescribe the pills for all manner of injuries and ailments.
The volume of pills from Purdue Pharma and other manufacturers that flooded the U.S. is believed to have contributed to the opioid epidemic. Nearly 645,000 people died from overdoses involving opioids from 1999 to 2021, according to the Centers for Disease Control and Prevention.
The U.S. attorney’s office in the Western District of Virginia successfully prosecuted Purdue and several of its executives in 2007, when the company pleaded guilty to a felony charge of misbranding OxyContin with the intent to defraud or mislead. Purdue separately pleaded guilty in 2020 to three federal felonies related to the marketing and distribution of OxyContin.
In 2021, Endo said it received a subpoena from the same U.S. attorney’s office the prior year, seeking documents related to McKinsey. Endo received a related subpoena in 2021, the company said in a securities filing, without disclosing further details.
Endo reached a criminal resolution earlier this year in which it pleaded guilty to a one-count misdemeanor for introducing misbranded drugs into interstate commerce.
In tandem with the criminal plea, Endo made a bankruptcy agreement to pay $465 million to the government over 10 years to settle its monetary claims arising from criminal and civil settlements.
Mallinckrodt, another of McKinsey’s former clients, disclosed last year that it faced a grand jury subpoena from the U.S. attorney’s office for the Western District of Virginia, seeking data and information about the company’s reporting of orders for suspicious controlled substances.