Consulting firm McKinsey has agreed to a $650 million settlement in the United States to end an investigation into its marketing practices of addictive painkillers. As part of the settlement, McKinsey is prohibited from engaging in the marketing, sales, or promotion of narcotics distribution.
The agreement includes a five-year probation period. Prosecutors alleged that McKinsey advised pharmaceutical company Purdue Pharma on boosting sales of the powerful and addictive painkiller OxyContin.
McKinsey faced accusations of conspiring to mislead users of the drug and obstructing justice. The complaint claims that the firm “knowingly” collaborated “with Purdue and others to support misleading labeling of prescription drugs.” Additionally, McKinsey was accused of “intentionally destroying and concealing documents” to hinder the Department of Justice’s investigation.
A former senior partner at McKinsey is expected to plead guilty next month. McKinsey had advised several major drug manufacturers on increasing their sales, including targeting advertisements for strong painkillers at people susceptible to addiction, such as those with a high risk of workplace injury.
Regions with high addiction and overdose rates were also targeted. McKinsey previously settled for nearly $1 billion in other lawsuits related to its involvement in the opioid epidemic, involving all 50 U.S. states, various local governments, and insurers.
In 2019, McKinsey announced it would no longer advise clients on opioid-related activities. In response to today’s settlement, McKinsey expressed deep regret for its past services to Purdue Pharma, including actions by a former partner who concealed documents.
“We should have recognized the harm opioids cause in our society. We regret our sales and marketing work for Purdue Pharma,” the company stated.
“This terrible public health crisis and our previous work for opioid manufacturers will always be regretted.” McKinsey’s annual revenue is estimated at $16 billion.
Source: NOS