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McKinsey & Co has agreed to pay $650 million to settle a US Department of Justice investigation into the consulting firm’s work advising OxyContin opioid maker Purdue Pharma on how to boost sales.
McKinsey has signed a five-year deferred plea agreement filed in federal court in Abingdon, Virginia, to resolve criminal charges filed as part of the latest corporate indictment over the marketing of addiction painkillers that helped fuel the deadly opioid epidemic in the US.
Prosecutors said McKinsey advised Stamford, Connecticut-based Purdue on steps it could take to “turbocharge” OxyContin sales. He was charged with conspiracy to mislabel a drug and obstruction of justice.
A former senior McKinsey associate, Martin Elling, has also agreed to plead guilty to obstruction of justice for destroying records related to McKinsey’s work for Purdue, according to court documents. He will submit his application on January 10.
Elling deleted documents related to his work for Purdue from his company laptop and sent himself e-mails to remind him, according to court documents.
“We regret the past customer service we provided to Purdue Pharma and the actions of a former partner who deleted documents related to that customer’s work,” McKinsey said in a statement.
“We should have recognized the harm opioids were doing to our society and should not be doing sales and marketing work for Purdue Pharma. This terrible public health crisis and past work for opioid manufacturers will always be a deep regret for our company.”
An attorney for Elling declined to comment.
McKinsey agreed to pay $650 million over five years, improve its compliance practices to detect illegal activity and submit to oversight by the DOJ and the office of the inspector general of the US Department of Health and Human Services as part of the deferred prosecution agreement, the company said.
The consulting firm also agreed to settle a civil investigation into alleged violations of the False Claims Act and enter into a “corporate integrity” agreement with the HHS inspector general’s office, the company said.
Purdue he pleaded guilty In 2020, criminal indictments cover widespread misconduct involving prescription painkillers, including defrauding US officials and paying illegal kickbacks to doctors and an electronic health records vendor.
Purdue is currently participating in a court-ordered mediation regarding a multimillion-dollar settlement reached by the U.S. Supreme Court in bankruptcy proceedings. aside from
In a statement Friday, Purdue said it was working to build consensus on a plan to “deliver billions of dollars of value in opioid reduction” and create a new company as an “engine for good.” Proceeds from the settlement are intended to compensate the victims, Purdue said.
McKinsey previously secured deals worth nearly $1 billion solve extended cases and other legal actions that say the company helped fuel the opioid epidemic by advising Purdue Pharma, the maker of OxyContin and other drugs.
In 2019, McKinsey announced that it would no longer advise clients on opioid-related businesses. That the Company admits no liability or wrongdoing in any of its settlements.
