McKinsey to pay $650m to settle opioid charges

Consulting firm McKinsey has agreed to pay $650m (£515m) to settle criminal charges related to its role in the US opioid crisis.

The company “knowingly and intentionally” conspired with pharmaceutical firm Purdue Pharma to “aid and abet the misbranding of prescription drugs… without valid prescriptions”, according to the US Department of Justice.

McKinsey faced charges of conspiring to misbrand a drug and obstructing justice. Prosecutors said it gave Purdue Pharma advice on how to “turbocharge” sales of OxyContin, a brand name for the painkiller oxycodone hydrochloride.

McKinsey apologised in a statement, saying “we should have appreciated the harm opioids were causing in our society”.

Former McKinsey senior partner Martin Elling is also set to plead guilty to obstruction for destroying records related to the case.

The US Department of Justice said McKinsey had entered a deferred prosecution agreement that will expire in five years if it meets the conditions.

In a deferred prosecution agreement, prosecutors require company reform, among other things, in exchange for temporarily suspending prosecution. If the defendant complies, prosecutors can move to dismiss the charges.

McKinsey already previously settled nearly $1bn (£792m) in lawsuits over its work with Purdue and other pharmaceutical companies.

Purdue Pharma itself pleaded guilty in 2020 to criminal charges related to its role in the US opioid crisis in an $8.3bn (£6.6bn) settlement.

The pharmaceutical company admitted to enabling the supply of drugs “without legitimate medical purpose”.

Purdue Pharma introduced OxyContin in the mid-1990s. One study found that by 2002, OxyContin accounted for 68% of oxycodone sales. Another reported that the abuse of OxyContin and hydrocodone, another commonly prescribed opioid, were the most prevalent among eight opioids by 2004.

Drug addiction and overdose deaths in the US have skyrocketed for the past three decades, initially fuelled by prescription opioids and later by the rise of heroin and synthetic opioids like fentanyl.

Nearly 100,000 people die every year from drug overdoses in the US. In the year leading up to June 2024, 97,000 people died from overdoses – a 14% drop from the year before.