McKinsey to pay $650 mn to settle US criminal case on opioids

Consulting giant McKinsey & Company will pay $650 million to settle US criminal charges that it collaborated with Purdue Pharma to intentionally misbrand opioids, according to a court filing Friday.

McKinsey "knowingly and intentionally" conspired with Purdue to "aid and abet the misbranding of prescription drugs... without valid prescriptions," according to a US Department of Justice document describing a deferred prosecution agreement (DPA) that will expire in five years if McKinsey meets the conditions.

The DPA filed by US attorneys in the Western District of Virginia also noted that a senior partner with the prominent consultancy "knowingly" destroyed and hid records with the "intent to impede, obstruct and influence" the probe.

The Department of Justice said it will charge a former senior partner with obstruction of justice.

Tough settlement

Under the settlement, McKinsey, which did not immediately respond to a request for comment, will cooperate with ongoing investigations into opioids or obstruction of justice. The company also agreed not to do any work "related to the marketing, sale, promotion or distribution of controlled substances," the filing said.

From 1999 through 2022 nearly 727,000 people died from opioid overdoses, according to the Centers for Disease Control and Prevention.

In February 2021, McKinsey agreed to pay $573 million to settle civil claims brought by 47 states and five US territories that it contributed to the opioid crisis through its advice to pharmaceutical giants.

'Turbocharged' opioid sales

Media reports have focused on how McKinsey helped Purdue boost sales and tailor marketing campaigns to counter statements from mothers whose teenagers had suffered overdoses.

McKinsey advised Purdue on how to "turbocharge the sales engine" of the drug by up to $400 million per-year, according to a Massachusetts lawsuit, by emphasizing that its opioids could reduce stress and make users more optimistic.

In September 2023, McKinsey agreed to an additional $230 million in settlements with US municipalities, counties and public school districts.