By Nate Raymond and Mike Spector
BOSTON (Reuters) – McKinsey & Co has agreed to pay $650 million to resolve charges over advice it provided Purdue Pharma on how to “turbocharge” sales of its addictive painkiller OxyContin, the U.S. Department of Justice said on Friday.
The consulting firm entered into a five-year deferred prosecution agreement filed in federal court in Abingdon, Virginia, to resolve criminal charges brought as part of the latest corporate prosecution concerning the marketing of addictive painkillers that helped fuel the deadly U.S. opioid epidemic.
A former senior McKinsey partner, Martin Elling, has also agreed to plead guilty to obstructing justice by destroying records concerning McKinsey’s work for Purdue. He is set to plead guilty on Jan. 10 and faces up to a year in prison under his plea agreement. His lawyer declined to comment.
Prosecutors said the case marked the first time a management consulting firm had been held criminally responsible for advice that it had given that resulted in a client committing a crime and should be a warning to the rest of the consulting sector.
“We will cut through the slick PowerPoints and the consultant speak and hold you accountable for your conduct if you engage in criminal violations,” U.S. Attorney Joshua Levy of Massachusetts said at a press conference in Boston.
The case was the latest to emerge from years of litigation and investigations into the extent that major drugmakers, drug distributors, pharmacies and corporations contributed to the epidemic. Nearly 727,000 people in the U.S. have died from opioid overdoses from 1999 to 2022, according to the U.S. Centers for Disease Control and Prevention.
The case against McKinsey followed Purdue’s own guilty plea in 2020 to charges covering widespread misconduct regarding its handling of prescription painkillers, including conspiring to defraud U.S. officials and pay illegal kickbacks to both doctors and an electronic healthcare records vendor.
Purdue is currently involved in court-ordered mediation to rework a multibillion-dollar civil settlement with states, local governments and others in bankruptcy proceedings after the U.S. Supreme Court turned aside its initial deal. The company on Friday said it aims to use settlement proceeds for opioid abatement and to compensate victims.
Prosecutors said Purdue in the wake of an earlier criminal case against the drugmaker over its marketing of OxyContin had obtained approval in 2010 with McKinsey’s advice for a new, reformulated version of the drug with abuse-deterrent properties.
