Business Maverick

Business Maverick

McKinsey agrees to pay $230m to settle more opioid lawsuits

McKinsey agrees to pay $230m to settle more opioid lawsuits
McKinsey is offering some staff nine months’ pay to leave the firm.

McKinsey & Co. is poised to pay $230-million in its latest settlement of lawsuits blaming the company for its role advising opioid manufacturers in their sales of the painkillers.

The proposed accord with local governments and school districts filed in court on Tuesday would resolve allegations that McKinsey, one of the biggest US management consulting firms, helped fuel the country’s opioid epidemic by providing sales analysis and marketing advice to makers of the highly addictive painkillers, including Purdue Pharma LP and Johnson & Johnson.

More than 3,000 state and local governments have sued opioid makers, distributors and sellers seeking compensation for billions of tax dollars spent battling the public-health crisis spawned by the painkillers. Total recoveries across the US are expected to exceed $50-billion once all payments are made. 

Tuesday’s settlement involves school districts and local governments that opted not to join McKinsey’s settlements in 2021 with 50 state attorneys general. All told, McKinsey already has paid out more than $640-million to resolve suits over its opioid work.

McKinsey’s role in the US opioid crisis has been revealed in lawsuits and settlement agreements. New York’s suit detailed how the firm allegedly consulted Purdue to step up sales calls to high-prescribing OxyContin doctors, persuade them to write high-dose prescriptions, and consider creating direct-distribution systems for the painkillers.

Fallout from the crisis continues to unfold. Last month, the US Supreme court took up the Biden administration’s bid to undo Purdue’s own $6-billion opioid settlement. The Justice Department argues the deal improperly shields the Sackler family members who own the company.

McKinsey has said that its consulting for opioid manufacturers, “while lawful”, nonetheless fell short of its high standards. The company didn’t adequately acknowledge the epidemic unfolding across the US, it said previously, deciding more than four years ago to end all work on opioid-specific business. It also said it undertook corporate governance reforms to align its work with its values and social responsibility.

US District Judge Charles Breyer in San Francisco must approve the settlement.

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  • Geoff Krige says:

    McKinsey’s “consulting for opioid manufacturers, “while lawful”, nonetheless fell short of its high standards”. We all know what “high standards” McKinsey maintains, standards that allow aiding and abetting corruption, advising on mega-state-capture deals, etc, with no regard to the effects on the broader population, no consideration to the ethics of its deals, in fact no consideration for anything beyond massive profits.

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