McKinsey & Co., one of the world’s largest consulting firms, has agreed to pay $573.9 million in a settlement with 47 states for its role in aiding drug companies boost sales, and drive the opioid addiction epidemic.
According to Massachusetts court filings, McKinsey “sold its ideas” to Purdue Pharma for over 15 years, beginning in 2004. McKinsey played a prominent role in the drug maker’s push to expand the market, easing the Food and Drug Administration’s restrictions and developing a multipoint plan to “turbocharge” sales at the height of the epidemic.
“Today’s agreement sets a new standard for accountability in one of the most devastating crises of our time,” Massachusetts Attorney General Maura Healey said in a statement. “As a result, our communities will receive substantial resources for treatment, prevention, and recovery services, and families who have seen their loved ones hurt and killed by the opioid epidemic will have the truth exposed” about McKinsey’s partnership with Purdue Pharma.
While in the settlement agreement McKinsey does not admit any wrongdoing, a statement by the Global Managing Partner, Kevin Sneader, fringes on an apology.
“We chose to resolve this matter in order to provide fast, meaningful support to communities across the United States,” Sneader’s statement said. “We deeply regret that we did not adequately acknowledge the tragic consequences of the epidemic unfolding in our communities. With this agreement, we hope to be part of the solution to the opioid crisis in the U.S.”
Most of the money to be paid by McKinsey will go to state programs funding addiction treatment centers and recovery services.
The settlement marks a humbling setback for the prestigious firm labeled as he “trusted advisor and counselor to many of the world’s most influential businesses and institutions,” however the deal may allow for a McKinsey hedge fund affiliate to generate investment gains. An investigation conducted by NBC News has discovered that the firm’s wholly owned hedge fund affiliate, MIO Partners, holds indirect stakes in addiction treatment centers and a maker of overdose treatment products.
Records show, in addition, that MIO once invested in companies that benefited from the rise of the opioid crisis, while now holding stakes in companies that may profit from the aftermath.
Morgenson, Gretchen. “Consulting Giant McKinsey Allegedly Fed the Opioid Crisis. Now an Affiliate May Profit from Treating Addicts.” NBCNews.com, NBCUniversal News Group, 8 Feb. 2021, www.nbcnews.com/news/us-news/consulting-giant-mckinsey-allegedly-fed-opioid-crisis-now-affiliate-may-n1256969.