McKinsey agrees to $650 million settlement over opioid crisis charges

Management consulting firm McKinsey & Company has committed to a payment of $650 million (£515 million) to resolve criminal allegations concerning its involvement in the American opioid epidemic. The US Department of Justice stated that the firm “knowingly and intentionally” conspired with pharmaceutical company Purdue Pharma to “aid and abet the misbranding of prescription drugs… without valid prescriptions.” McKinsey was accused of conspiring to misbrand a drug and obstruction of justice. Prosecutors alleged that McKinsey provided Purdue Pharma with guidance on methods to “turbocharge” sales of OxyContin, a painkiller known by the brand name oxycodone hydrochloride. In a statement, McKinsey issued an apology, acknowledging, “we should have appreciated the harm opioids were causing in our society.” Martin Elling, a former senior partner at McKinsey, is also expected to enter a guilty plea for obstruction due to the destruction of records pertinent to the investigation. The US Department of Justice announced that McKinsey had entered into a deferred prosecution agreement, which will conclude in five years provided the firm fulfills its stipulated conditions. Under a deferred prosecution agreement, prosecutors mandate corporate reforms, among other requirements, in exchange for a temporary halt in legal proceedings. Should the defendant adhere to these terms, prosecutors have the option to seek dismissal of the charges. McKinsey had previously resolved lawsuits totaling nearly $1 billion (£792 million) concerning its engagements with Purdue and other pharmaceutical corporations. Purdue Pharma itself admitted guilt in 2020 to criminal accusations tied to its part in the US opioid crisis, as part of an $8.3 billion (£6.6 billion) settlement. The pharmaceutical firm confessed to facilitating the provision of drugs “without legitimate medical purpose.” Purdue Pharma launched OxyContin during the mid-1990s. A study indicated that by 2002, OxyContin represented 68% of all oxycodone sales. Furthermore, another report stated that the misuse of OxyContin and hydrocodone, which is another frequently prescribed opioid, was the most widespread among eight opioids by 2004. Over the last three decades, drug addiction and fatal overdoses in the United States have dramatically increased, initially driven by prescription opioids and subsequently by the emergence of heroin and synthetic opioids such as fentanyl. Annually, close to 100,000 individuals in the US succumb to drug overdoses. In the twelve months preceding June 2024, 97,000 overdose deaths were recorded, marking a 14% decrease compared to the previous year.