CA AG Announces $573 Million Nationwide Settlement with McKinsey & Company for its Role in the Opioid Epidemic
Sacramento, CA (WorkersCompensation.com) - Attorney General Becerra, along with a coalition of attorneys general from 47 states, the District of Columbia and five U.S. territories, announced a $573 million settlement with one of the world's largest consulting firms, McKinsey & Company (McKinsey). The settlement resolves California's investigation into the company's role in advising opioid companies, helping those companies promote their drugs, and profiting from the opioid epidemic. This is the first multistate opioid settlement to result in substantial payment to the states to address the epidemic. California will receive $59,613,603.99 from the settlement, which will be used to abate the damage caused by opioids to families and communities in California.
“The abuse of opioids, not just by those who consumed these drugs, but by those who produced, marketed, distributed and dispensed them, has left much of America in mourning. We can't bring back lost lives, but we can hold ringleaders accountable,” said Attorney General Becerra. “McKinsey & Company was a player in this unfolding opioids tragedy. Today's settlement holds McKinsey to account.”
In addition to providing funds to address the crisis, the agreement calls on McKinsey to prepare tens of thousands of its internal documents detailing its work for Purdue Pharma and other opioid companies for public disclosure online. In addition, McKinsey agrees to adopt a strict document retention plan and continue its investigation into allegations that two of its partners tried to destroy documents in response to investigations of Purdue Pharma. The company must implement a strict ethics code that all partners must agree to each year, and it must stop advising companies on potentially dangerous Schedule II and III narcotics.
Today's filings describe how McKinsey contributed to the opioid crisis by promoting marketing schemes and consulting services to opioid manufacturers, including OxyContin maker Purdue Pharma, for over a decade. California's legal complaint, filed alongside the settlement, details how McKinsey advised Purdue on how to maximize profits from its opioid products, including targeting high-volume opioid prescribers, using specific messaging to get physicians to prescribe more OxyContin to more patients, and circumventing pharmacy restrictions in order to deliver high-dose prescriptions. When states began to sue Purdue's directors for their implementation of McKinsey's marketing schemes, McKinsey partners began corresponding about deleting documents and emails related to their work for Purdue.
The opioid epidemic has led to considerable harm to individuals and California's communities. In 2019, the California Department of Public Health reported 3,244 deaths related to an opioid overdose. The epidemic has resulted in considerable costs to the state in the form of healthcare, child welfare, criminal justice, and many other programmatic costs. On the societal level, opioid addiction, abuse, and overdose deaths have torn families apart, damaged relationships, and eroded the social fabric of communities. In addition, the uncertainty and stress caused by the COVID-19 pandemic continues to feed the increase in opioid overdose deaths. The Overdose Detection Mapping Application Program reports that national suspected overdoses in 2020 rose 18 percent in March, 29 percent in April, and 42 percent in May compared to the same months in 2019.
Today's filing is the latest action taken by Attorney General Becerra to combat the opioid epidemic and hold accountable those who are responsible for creating and fueling the crisis. In January, the Attorney General urged the United States Food and Drug Administration to provide an update on its work to help states combat the opioid epidemic. Last year, Attorney General Becerra also announced a global settlement framework between state attorneys general, local subdivisions, and Mallinckrodt, its subsidiaries, and certain other affiliates over the company's participation in the opioid crisis. In 2019, the Attorney General announced a lawsuit against Purdue Pharma and former Purdue President and board member Dr. Richard S. Sackler for the role the company's illegal and misleading marketing and sales practices played in contributing to the opioid crisis. In 2017, Attorney General Becerra expanded his investigation of pharmaceutical manufacturers and the three largest distributors of opioids to determine if the companies engaged in unlawful practices in the marketing, sale, and distribution of opioids. The California Department of Justice also maintains California's prescription drug monitoring program, CURES 2.0, which assists in efforts to curb prescription drug abuse.
The states' investigation was led by an executive committee made up of the attorneys general of California, Colorado, Connecticut, Massachusetts, New York, North Carolina, Oklahoma, Oregon, Tennessee, and Vermont. The executive committee is joined by the attorneys general of Alabama, Alaska, Arizona, Arkansas, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Texas, Utah, Virginia, Wisconsin, Wyoming, the District of Columbia, and the territories of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.
A copy of the complaint is available here and a copy of the signed judgment is here.
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