The US is looking into McKinsey’s role in the drug problem
According to three people familiar with the situation, McKinsey Co. is the target of a criminal investigation in the United States due to claims that the consulting firm helped fuel the opioid epidemic. The investigation focuses on the firm’s advice given to Purdue Pharma, the company that makes OxyContin, and other drugmakers.
Both the US Justice Department and the consulting business refused to comment.
According to two of the people, the investigation is centered on determining if McKinsey participated in a criminal conspiracy when it advised Purdue and other pharmaceutical companies on marketing techniques to increase sales of prescription opioids that resulted in widespread addiction and deadly overdoses.
According to reports, the Justice Department is also looking into potential conspiracies to commit healthcare fraud after McKinsey’s consulting work for opioid-selling corporations led to false claims being submitted to government agencies like Medicare.
In addition, prosecutors are investigating whether McKinsey obstructed justice in connection with the firm’s admission that it had dismissed two partners for exchanging information about erasing records pertaining to their work with opioids, according to the persons.
Justice Department employees from offices in Virginia, Massachusetts, and Washington are involved in the investigation, which was started a few years before to the start of the worldwide epidemic, they claimed. According to one of the persons, both parties are in talks to end the investigation.
Investigators may choose to file criminal charges, request civil penalties, or end the investigation without taking any further action. Investigations are not proof of crime. The Justice Department’s probe was first reported by The Wall Street Journal.
The Justice Department investigation highlights how the almost century-old consulting company McKinsey is still in the business of advising drugmakers on opioids. The possibility for criminal charges against the corporation or its officials, as well as the severe financial penalties that the Justice Department often wants in return for concluding its white-collar investigations, make it more risky than past government investigations that McKinsey has handled.
In order to resolve several opioid lawsuits and other related legal proceedings taken by all 50 states, Washington, DC, US territories, different local governments, school districts, Native American tribes, and health insurers, McKinsey previously signed separate deals totaling over $1 billion.
In 2019, McKinsey said that it will stop advising clients on ventures involving opioids. According to McKinsey, there have been no admissions of fault or misconduct in any of the settlements. “We acknowledge and condone the criticism surrounding our previous client services provided to opioid producers. Despite being legal, this activity did not live up to the high standards McKinsey established for itself, the consulting firm said in a 2022 statement in response to a congressional committee investigation that examined its consulting work.
A request for comment from Purdue was not immediately answered. In 2020, the pharmaceutical company entered a guilty plea to charges related to its management of opioid analgesics. In 2019, Purdue declared bankruptcy and subsequently reached a $10 billion deal to resolve hundreds of claims claiming it was a contributing factor to the opioid crisis.
The settlement was blocked by the Supreme Court, which is scheduled to decide on a challenge to the agreement brought by the Biden administration.
According to one of the persons, prosecutors are still far from deciding whether to charge anybody in their criminal investigation of McKinsey since they are still going over a lot of papers and talking with the legal representatives of the consulting company.
