McKinsey agrees to pay $650 million for its role in the opioid crisis

The management consulting firm McKinsey and Company will pay $650 million over work it did for Purdue Pharma that federal prosecutors say helped fuel the opioid crisis.

The settlement resolves criminal and civil Justice Department investigations into McKinsey's work helping Purdue increase sales of powerful opioids despite concerns about addiction.

Federal prosecutors accused McKinsey of "turbocharging" Purdue's sales of opioids by targeting doctors who had high volumes of opioid painkiller prescriptions and who would prescribe the drug even if it wasn't medically necessary.

“This is a case about the thousands and thousands of people who’ve lost their lives to opioid addiction over the last many years," said acting Massachusetts U.S. Attorney Joshua Levy when announcing the agreement with prosecutors in Virginia, where the case was filed.

Under the agreement, McKinsey agreed to participate in a compliance program to prevent illegal activity and to refrain from work related to the sale of controlled substances.

Authorities say it's the first time a consulting firm has been held responsible for its role in the crisis, which causes tens of thousands of deaths each year in the U.S.

"We recognize that imposing huge fines and corporate compliance programs that's not going to bring one life back," Levy said. " But it is, we hope, going to prevent this conduct from happening again — whether it's in the opioid space or some other threat to public safety."

McKinsey also agreed to forfeit all fees from Purdue, which declared bankruptcy in 2019 amid a series of lawsuits and investigations into the sales and marketing of its painkiller OxyContin.

In a statement, McKinsey said it agreed to accept responsibility for the allegations underlying the charges of misdemeanor conspiracy to aid and abet in misbranding.

"We should have appreciated the harm opioids were causing in our society and we should not have undertaken sales and marketing work for Purdue Pharma," the McKinsey statement said. "This terrible public health crisis and our past work for opioid manufacturers will always be a source of profound regret for our firm."

A former senior McKinsey partner, Martin Elling, also agreed to plead guilty to obstruction of justice for destroying records about the company's work with Purdue.