The conclusion of a rancid story of greed and evil human exploitation emerged recently.
‘Powerful message to consulting’: McKinsey to pay $1b for opioid crisis
David Ovalle
Dec 15, 2024 – 7.57am
Washington | Business consulting giant McKinsey will pay $US650 million ($1 billion) to end a criminal probe by the Justice Department into the company’s role in bolstering sales of addictive pain pills, prosecutors announced on the weekend.
In what officials described as a landmark case, US attorneys in Massachusetts and Virginia filed charges of conspiracy to misbrand a drug and obstruction.
The investigation stems from the company’s work advising Purdue Pharma on how to “turbocharge” sales of the blockbuster opioid OxyContin, officials said. State and federal officials allege Purdue helped kick-start the nation’s opioid crisis in the late 1990s and 2000s by aggressively marketing the drug to doctors while downplaying its addiction risk.
It marks the first time a management consulting company has faced criminal charges related to work with the opioid industry, said Christopher R. Kavanaugh, US attorney for the Western District of Virginia.
“It sends a powerful message to the consulting industry,” Mr Kavanaugh said at a news conference in Boston on Friday (Saturday AEDT).
McKinsey’s agreement also resolves a Justice Department civil investigation into allegations the company’s work with Purdue led to false claims to federal health insurance programs.
The agreement adds to more than $US989 million that McKinsey agreed earlier to pay to settle lawsuits from states, local governments, school districts, health insurers and benefit plans. It is another black eye for the consulting giant. This month, a McKinsey subsidiary agreed to pay more than $US122 million to resolve a federal probe into allegations it sought to bribe government officials in South Africa.
McKinsey said in a statement that it should never have worked with Purdue. “This terrible public health crisis and our past work for opioid manufacturers will always be a source of profound regret for our firm,” the company said.
Martin Elling, a former McKinsey senior partner, has also agreed to plead guilty to allegations he destroyed records related to the company’s consulting with Purdue, federal court records show. His attorney did not immediately respond to a request for comment.
McKinsey began working with Purdue in 2004, continuing even after an affiliate of the Connecticut drugmaker and several executives pleaded guilty to misbranding OxyContin in 2007.
According to a court filing on Friday, the company helped try to fend off proposed Food and Drug Administration restrictions designed to minimise the risk of the opioid. Amid slumping sales, McKinsey advised Purdue on how to target doctors who then wrote medically unnecessary prescriptions, prosecutors said.
McKinsey consultants even rode along with Purdue sales representatives to visit doctors, officials said.
“They were no better than street level dealers reaping a profit from addiction and misery of others,” said Boston FBI Special Agent in Charge Jodi Cohen.
McKinsey has stopped working with opioid industry companies. If the company successfully completes five years of federal oversight, prosecutors will drop the charges, according to the agreement.
Purdue, facing a tsunami of lawsuits, filed for bankruptcy in 2019. In June, the Supreme Court scuttled a bankruptcy plan that would have settled lawsuits with governments and victims. The company estimated the settlement could be worth up to $US10 billion.
Purdue, the family that owns the company and creditors are engaged in court-ordered mediation scheduled to conclude on December 23; Purdue is asking for an extension through late January. In a statement on Friday, the company said it was working toward a settlement that would compensate victims and curb the opioid crisis.
The McKinsey agreement marks another moment of reckoning for companies involved in the opioid crisis, which started with prescription pills that often ended up on the illicit market, fuelling addiction.
As prescriptions for opioids declined in recent years, the epidemic of addiction shifted to illicit fentanyl, which has proved even deadlier. Drug overdoses killed more than 100,000 people in the United States in each of the past three years, although officials have noted a sharp decrease in 2024.
Local and state governments have filed thousands of lawsuits against companies involved with prescription opioids, arguing that the flood of potent pain pills wreaked havoc on communities.
The legal strategy of using state public nuisance laws has resulted in more than $US50 billion in settlements with drug makers, distributors, pharmacy chains and others. In cases that have gone to trial, some cities and counties have won large judgments.
But others have lost. The latest example happened on Tuesday, when the Oklahoma Supreme Court sided with retail chains that had been ordered to pay $US650 million to help communities suffering from the crisis.
Washington Post
Here is the link:
There are some really excellent documentaries on all this. Here is a link to a good one:
https://www.netflix.com/title/81095069
The combination of greed, exploitation and raw evil in pushing Oxycontin was really something to behold!
That 100,000 people died of overdoses is just too horrific to contemplate – but shows just how evil people driven by financial greed can be!
Great to see the piper is being paid
and the crooks are being bankrupted! Sends a message to those over-smart consultants!
There is a lesson here I believe…
David.
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