The US Department of Justice is conducting a criminal investigation into the McKinsey consulting firm regarding its past role in advising some of the nation’s largest opioid manufacturers. The suspicion concerns the way in which the consulting company was helped to increase sales.
Federal prosecutors are investigating whether McKinsey or any of its employees obstructed legal proceedings over its records of its consulting services to opioid manufacturers, according to people familiar with the investigation, which has been going on for several years.
A grand jury has been empaneled in Virginia as part of a federal investigation into McKinsey’s opioid consulting, according to people familiar with the details. The U.S. Attorney’s Offices for the Western District of Virginia and the District of Massachusetts are jointly conducting the investigation.
McKinsey declined to comment.
The criminal investigation focuses on the consulting advice that McKinsey gave to drugmakers including Purdue, Endo International and Melnickrodt, which in the past led to civil lawsuits against the consulting firm. In recent years, government entities and private plaintiffs have filed hundreds of civil lawsuits accusing the consulting firm of exacerbating opioid addiction—a claim McKinsey has denied.
In 2021, McKinsey reached a settlement with all 50 U.S. states, the five U.S. territories, and Washington, D.C., under which it will pay $642 million to settle opioid-related civil lawsuits against the company, without admitting any wrongdoing. Additionally, in 2023, the company reached additional agreements totaling $347 million with public schools, insurance companies, and more, also without admitting wrongdoing.
In the settlement with the states’ attorneys general, McKinsey said that “to achieve finality and avoid the cost and risk inherent in statewide litigation, McKinsey chose to be part of the solution to the complex public health crisis,” by contributing to opioid reduction efforts without admitting liability.
Former McKinsey clients Perdue, Endo and Meinkerudt filed for Chapter 11 bankruptcy while facing mass lawsuits alleging they sold drugs through deceptive marketing practices and fueled addiction.
McKinsey’s advice
McKinsey helped Perdio, maker of the pain reliever OxyContin, develop an initiative to boost drug sales and marketing, according to records released after Perdio filed for bankruptcy in 2019.
McKinsey consultants advised the company on how to increase sales of its flagship drug. Among the recommendations was the suggestion that Purdue’s sales force should make more calls to health care providers who are known to have written large amounts of OxyContin prescriptions. On the other hand, the consultants suggested that the team should devote less time to the doctors who wrote the lowest number of prescriptions for this opioid drug. This is what the records show.
In August 2013, consultants from the company sent a memo to Pardio executives with 20 recommendations that they said would increase OxyContin sales by more than $100 million a year. McKinsey advised Perdue of a “significant opportunity” to divert sales calls to the highest-volume prescribers, who as a group wrote an average of 25 times more OxyContin prescriptions than their peers, according to the memo, which was included in the disclosed court records.
McKinsey previously said it stopped working with opioid-specific businesses in 2019 and that its work for Purdue was aimed at supporting the legal use of opioids and patients with legitimate medical needs.
According to documents disclosed as part of the settlement between McKinsey and the US states and local governments, the company also advised Perdio and Endo on how to focus on selling their products to the US Department of Veterans Affairs. It should be noted that this consultation occurred concurrently with McKinsey’s work as a consultant for the Department of Veterans Affairs itself. However, McKinsey claimed that the advice it provided to the Department of Veterans Affairs was unrelated to the issue of the opioid purchase.
About 645 thousand die from the plague
Pharmaceutical companies began marketing opioid pain relievers in the 1990s, leading many doctors to prescribe the pills for all kinds of injuries and illnesses. The volume of pills from Perdio Pharma and other manufacturers that has flooded the US is considered a contributor to the opioid epidemic.
Nearly 645,000 people died from overdoses involving opioids from 1999 to 2021, according to the Centers for Disease Control and Prevention.
The U.S. Attorney’s Office for the Western District of Virginia successfully prosecuted Purdue and several of its executives in 2007, when the company pleaded guilty to a felony count of mislabeling OxyContin with intent to defraud or mislead. Purdue pleaded guilty separately in 2020 to three federal felonies related to marketing and distribution. of oxycontin.
In 2021, Endo disclosed that it had received a subpoena from the same U.S. attorney’s office the previous year seeking documents related to McKinsey. Endo also received a related subpoena in 2021, according to a securities filing, but no further details were disclosed.
Ando reached a plea deal earlier this year in which she pleaded guilty to one misdemeanor charge of introducing mislabeled drugs into interstate commerce. Concurrent with the guilty plea, Endo entered into a bankruptcy agreement that includes a $465 million payment to the government over 10 years to settle financial claims against it arising from criminal and civil settlements.
Mallinckrodt, another former McKinsey client, revealed last year that she was facing a grand jury subpoena from the U.S. Attorney’s Office for the Western District of Virginia seeking data and information about the company’s reporting of suspected controlled substance orders.
For your attention: The Globes system strives for a diverse, relevant and respectful discourse in accordance with the code of ethics that appears in the trust report according to which we operate. Expressions of violence, racism, incitement or any other inappropriate discourse are filtered out automatically and will not be published on the site.