US opioid crisis: McKinsey to settle accusations by paying $573mn

By Sayujya S, Desk Reporter
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Global consulting firm McKinsey & Co. will pay $573 million to US states and settle claims that it contributed to the country’s deadly opioid crisis through its advice to pharmaceutical giants, including the manufacturer of OxyContin, Purdue Pharma.

Opioids are pain-relieving drugs that can lead to death when consumed excessively.


McKinsey advised Purdue Pharma 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 the opioid could reduce stress and make users more optimistic. Reports claim that McKinsey consultants also worked with Perdue Pharma to counter “the emotional messages from mothers with teenagers that overdosed” on OxyContin.

Almost half a million Americans died in overdoses from both prescription and illegal opioids between 1999 and 2018, according to the Centers for Disease Control and Prevention. Authorities have said that the opioid crisis has driven the first significant reduction in US life expectancy since the 1990s.

Settlement terms

Under the terms of the settlement announced recently, McKinsey will not admit fault, and the agreement protects the company from future civil claims from the states involved in the case. However, the company will have to stop consulting work on some narcotics, implement a new ethics code and release documents related to their work with Purdue while ensuring none are destroyed, said New York Attorney General Letitia James, who announced the settlement.

“Under the terms of today’s agreement, the company will finally end its illegal conduct, deliver more than half a billion dollars into communities across the nation and will never be able to help perpetrate this type of fraud and deception again,” Ms. Letiti said.

Proceeds from the settlement, which exceeds any profits the firm made from its work with pharmaceutical giants, will go towards opioid addiction prevention and recovery programs, Ms. Letitia said.

The settlement is a rare one in the history of the massive consulting firm that advertises its ability to solve problems worldwide, but has found itself accused of having a hand in creating a massive public health crisis in the United States.

New York was among the group of 47 states, five territories and the District of Columbia that sued the firm over its work with Purdue Pharma, which last year pleaded guilty to criminal charges over the production and sale of prescription opioid OxyContin. The pharma company had reached an $8.3 billion settlement with the US Justice Department.