McKinsey Reaches $650 Million Settlement Over Opioid Crisis Involvement

McKinsey & Company has settled for $650 million in connection with criminal charges tied to its collaboration with Purdue Pharma during the opioid crisis, marking the latest in a series of legal repercussions faced by the consulting firm and the pharmaceutical industry.

Consulting firm McKinsey & Company has struck a deal worth $650 million (£515 million) to resolve criminal charges associated with its involvement in the ongoing US opioid crisis. According to the US Department of Justice, McKinsey “knowingly and intentionally” collaborated with Purdue Pharma to misbrand prescription drugs, effectively enabling their distribution without appropriate prescriptions.

The allegations against McKinsey include conspiring to misbrand drugs and obstructing justice. Prosecutors claim that the firm provided Purdue Pharma with strategies designed to "turbocharge" the sales of OxyContin, a widely used painkiller containing oxycodone hydrochloride. In a public statement, McKinsey expressed remorse, acknowledging, "we should have appreciated the harm opioids were causing in our society."

Additionally, former McKinsey senior partner Martin Elling is expected to plead guilty to charges of obstruction for the destruction of relevant case documents. As part of a deferred prosecution agreement, McKinsey will avoid prosecution for five years if it successfully meets stipulated requirements, which include company reform among other conditions.

This is not McKinsey's first legal settlement related to the opioid crisis; it previously agreed to pay nearly $1 billion (£792 million) over similar lawsuits concerning its engagements with Purdue and other pharmaceutical enterprises. Purdue Pharma itself acknowledged guilt in 2020, reaching an $8.3 billion (£6.6 billion) settlement for its involvement in the opioid epidemic, admitting to facilitating drug distribution “without legitimate medical purpose.”

Introduced in the mid-1990s, OxyContin has had a significant impact on drug sales and addiction rates, leading to dire public health consequences. The US has grappled with a dramatic rise in drug addiction and overdose deaths, with nearly 100,000 people dying annually from overdoses. However, recent trends show a hopeful decline in these fatalities, with about 97,000 overdose deaths reported in the year preceding June 2024, marking a 14% drop compared to the previous year.