The company struck a multi-million-dollar settlement with officials across 47 states, Washington, DC and five US territories, the New York Times reported on Wednesday evening, citing five people “familiar with the negotiations.”
The company will be required to pay out $478 million of the settlement within 60 days, much of which will go to fund opioid treatment and addiction recovery programs in various states.
The reported settlement comes as the high profile consulting outfit is under fire for helping to – in its own words – “turbocharge” sales of Purdue Pharma’s OxyContin, a high-dose oxycodone formulation blamed for tens of thousands of overdose deaths in the US over the last 20 years.
Oxycodone is a highly addictive narcotic with effects and potency comparable to heroin. It is roughly 1.5 times stronger than morphine, another commonly used painkiller, and has played an outsized role in driving the US opioid crisis.
READ MORE: OxyContin maker files for bankruptcy faced with over 2,000 lawsuits over opioid epidemic
In consulting for Purdue – which has itself pleaded guilty to criminal charges linked to its opioids – McKinsey helped the company bolster OxyContin sales in a number of ways, such as crafting its marketing to combat “emotional messages from mothers with teenagers that overdosed” on the drug, according to court documents released last year. McKinsey also proposed paying “rebates” to Purdue’s distributors for every OxyContin overdose tied to pills they sold. It is unclear if the scheme was ever put into action, however, with major distributors CVS and Anthem denying they were ever compensated for overdoses.
Though oxycodone was once reserved for the terminally ill and others with serious medical conditions, in recent years Big Pharma firms like Purdue have increasingly pushed healthcare professionals to prescribe the drug to standard pain patients. In the company’s promotional material, usually aimed at physicians, it claimed for years that OxyContin’s addiction risk was “extremely small,” even as the drug became one of the most highly abused opioids in the country.
While McKinsey, a multi-billion-dollar firm, will admit to no wrongdoing in the settlement, it has previously acknowledged errors in its work with Purdue, issuing a rare apology in December.
“As we look back at our client service during the opioid crisis, we recognize that we did not adequately acknowledge the epidemic unfolding in our communities or the terrible impact of opioid abuse and addiction on millions of families across the country,” it said in a statement.
The company will, however, agree to court-ordered restrictions related to certain types of narcotics, and to retain its internal communications for a period of five years in case of future probes. It will also place documents pertaining to its opioid-related work into a public database, apparently in bid at transparency after McKinsey executives were caught suggesting “eliminating all our documents and emails” linked to Purdue when the pharma firm was sued by the state of Massachusetts in 2018. It is unknown whether they went on to destroy any records.
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