McKinsey & Company, the global consulting firm, has agreed to pay $650 million to resolve allegations stemming from its advisory work with Purdue Pharma, particularly concerning OxyContin, amid the serious opioid crisis gripping the United States. The settlement was announced by the U.S. Department of Justice, which has charged McKinsey with conspiracy to misbrand prescription drugs and obstruction of justice.
The investigation revealed McKinsey advised Purdue Pharma on strategies to "turbocharge" the sales of OxyContin, linking their practices to the worsening opioid epidemic. U.S. lawmakers and advocacy groups have long criticized the pharmaceutical industry’s role, including consulting firms like McKinsey, which have faced minimal accountability until recent developments.
On Friday, McKinsey entered a deferred prosecution agreement filed in federal court, which means prosecution is on hold for five years, contingent on compliance with the terms set by the Justice Department. Federal officials described the agreement as unprecedented, marking the first time a management consulting firm has been held criminally responsible for its advisory role related to client misconduct.
McKinsey’s internal documents revealed its deep involvement with Purdue, including advising the company on methods to aggressively market OxyContin even as public scrutiny and backlash against the opioid crisis increased. "McKinsey's strategy resulted in prescriptions for OxyContin being unsafe and medically unnecessary," U.S. Attorney Christopher Kavanaugh stated during the announcement.
Further complicity from within the company is highlighted by the actions of former senior partner Martin Elling, who has agreed to plead guilty to obstruction for destroying documents tied to McKinsey’s work for Purdue. These actions were viewed as attempts to hinder investigations and stem the fallout from the public health disaster precipitated by opioid over-prescriptions.
When the opioid epidemic began to escalate, Purdue Pharma sought McKinsey’s assistance as sales of OxyContin began to decline. The consulting firm had previously helped Purdue obtain approval for reformulated OxyContin intended to deter abuse but later advised the company to target “high-value” prescribers who might continue to write prescriptions even after evidence of the drug’s dangers became more widely recognized.
“We are deeply sorry for our past client service to Purdue Pharma,” McKinsey stated, acknowledging the firm’s misjudgment and its failure to appreciate the harm opioids were causing within society. The firm committed to significant changes by enhancing compliance practices and subjecting itself to oversight by the Department of Justice and the U.S. Department of Health and Human Services.
Aside from the $650 million settlement, this agreement brings closure to one segment of McKinsey’s broader legal challenges, following the consulting firm’s previous settlements amounting to nearly $1 billion across various lawsuits filed by states and local governments. Critics of the corporate accountability system continue to highlight how such settlements often lack genuine consequences for corporate leaders, who remain largely shielded from criminal prosecutions.
Purdue Pharma itself had previously pleaded guilty to federal charges concerning its involvement with the opioid crisis, resulting in its own $8.3 billion settlement agreement. Critics have pointed to the structured accountability mechanisms as failing to hold individuals responsible when high-level executives seemingly escape justice. This pattern has ignited calls for stricter legal frameworks surrounding corporate accountability.
The opioid epidemic, which has claimed the lives of over 80,000 Americans recently, continues to have devastating effects across the country. While McKinsey’s involvement and subsequent settlement mark significant developments, advocates insist more accountability is necessary not only from pharmaceutical companies but also from the consulting firms aiding them.
“No one goes to jail,” stated Ed Bisch, whose son was among the tragic victims of the opioid crisis. His advocacy group has called for increased accountability for companies involved at different levels of the opioid supply chain. Such sentiments echo through communities grappling with the remnants of the widespread addiction crisis, as many families long for justice and reparations for the carnage left behind.
The Department of Justice’s announcement serves as both a conclusion to McKinsey’s current legal challenges and as part of the larger dialogue surrounding corporate ethics and accountability within industries complicit in public health crises. While McKinsey has promised reforms and future compliance, the questions surrounding the effectiveness of such measures and their sufficiency to deter future misconduct remain unanswered.
By agreeing to the substantial settlement and outlining corrective actions, McKinsey initiates its new chapter under closer scrutiny by federal authorities, marking the start of what advocates hope will be more significant changes throughout the industry.
