Disgraced former OxyContin marketer Purdue Pharma is on the hook for billions after agreeing to settle cases that held the company responsible for fueling the U.S. opioid crisis. Now, the company that was consulting Purdue on its opioid business has agreed to a hefty settlement as well.
McKinsey will pay $650 million to settle with the U.S. Department of Justice (DOJ), which was investigating the company’s efforts to help Purdue increase its OxyContin sales. In exchange, the DOJ will drop its charges. The agency revealed the agreement in a Friday press release.
According to the settlement, which was revealed in a filing in federal court in Abingdon, Virginia, the consulting firm “knowingly and intentionally” conspired with Purdue to misbrand prescription drugs to “turbocharge” their sales.
As part of the agreement, a former partner at McKinsey, Martin Elling, has agreed to plead guilty to obstruction of justice for “knowingly destroying and concealing records and documents” having to do with the company’s advising of Purdue. McKinsey fired Elling in 2020 when the allegations first arose. The 60-year-old now lives as a U.S. citizen in Thailand, the DOJ said.
Also with the deal, McKinsey will be barred from providing any of its services to assist in the commercializing of controlled substances during its five-year deferred prosecution agreement. The company in 2019 decided to stop advising companies with opioid-related businesses.
"We are deeply sorry for our past client service to Purdue Pharma and the actions of a former partner who deleted documents related to his work for that client. We should have appreciated the harm opioids were causing in our society and we should not have undertaken sales and marketing work for Purdue Pharma," McKinsey said in a prepared statement. "This terrible public health crisis and our past work for opioid manufacturers will always be a source of profound regret for our firm."
McKinsey’s consulting work for Purdue came under scrutiny in 2020 when a bankruptcy proceeding revealed that it guided the marketing strategy for OxyContin.
Two years later, Congress applied pressure after further revelations that at least 22 McKinsey employees who were consulting for Purdue and other opioid producers were also doing work for government agencies tasked with regulating opioid use, including the FDA. Friday’s settlement also resolved those allegations.
“Consulting firms like McKinsey should get the message: if the advice you give to companies in boardrooms and PowerPoint presentations aids and abets criminal activity, we will come after you and we will expose the truth,” Joshua Levy, U.S. attorney for the District of Massachusetts, said in the DOJ statement.
In 2021, McKinsey agreed to pay $573 million to 47 states and the District of Columbia to resolve allegations over its role in the opioid crisis. While the company did not admit wrongdoing with that settlement, that changed with Friday’s DOJ deal.
"We have agreed to accept responsibility for our conduct and agreed to the facts and allegations underlying the charges against McKinsey U.S. for misdemeanor conspiracy to aid and abet in misbranding and felony obstruction by a now-former senior partner," McKinsey said.
In 2020, Purdue pleaded guilty to federal civil and criminal claims for its role in fueling the opioid epidemic and signed an $8 billion settlement. The company’s attempt to resolve the settlement through a bankruptcy effort came to a dead end in July when it was rejected by the U.S. Supreme Court.