Mass. to get $13.2m from McKinsey opioid settlement

MASSACHUSETTS WILL get $13.2 million from a national settlement with consultant McKinsey & Company over the company’s role working for opioid companies.

Massachusetts Attorney General Maura Healey, who has been a leader in the opioid-related litigation, called the settlement “an important moment for accountability” for families who have been devasted by opioid addiction.

The Massachusetts payment is part of a $573 million settlement that McKinsey reached with attorneys general from 47 states, five territories, and Washington, DC, over its role in encouraging Purdue Pharma to pursue aggressive sales tactics for its addictive opioid drugs. This is the first settlement with a company involved in the opioid epidemic that has resulted in a substantial payout to states, although more settlements are likely to follow.

Kevin Sneader, global managing partner of McKinsey, said in a statement that the company chose to settle “in order to provide fast, meaningful support” to communities across the United States.

“We deeply regret that we did not adequately acknowledge the tragic consequences of the epidemic unfolding in our communities,” Sneader said. “With this agreement, we hope to be part of the solution to the opioid crisis in the US.”

In December, McKinsey issued a public apology for its work with Purdue Pharma and said it stopped working on opioid-specific business in 2019.

The settlement money, which will be paid out over five years, is supposed to be used by states to cover their costs in pursuing the case and to address the harms caused by the opioid epidemic. Healey said in Massachusetts the money will go into a newly created Opioid Recovery and Remediation Fund to help expand access to opioid use disorder prevention, intervention, treatment, and recovery options.

The case has strong Massachusetts ties, since Healey has been leading the attorney generals’ fight against Purdue Pharma and McKinsey. Healey sued Purdue Pharma in June 2018, accusing the company of misleading prescribers and consumers about the addiction and health risks of opioids, including OxyContin. Related lawsuits ultimately led the company to file for bankruptcy. It was documents released by Healey and in federal bankruptcy court that revealed McKinsey’s involvement with Purdue Pharma.

The documents showed that the New York-based consulting firm advised Purdue Pharma officials on how to “turbocharge” sales of OxyContin even amid the opioid addiction epidemic.

Although the settlement is national, consent judgements are being filed for judicial approval in state courts.

A complaint filed in Suffolk Superior Court Thursday accuses McKinsey of violating the state consumer protection act through work it did for Purdue Pharma between 2004 and 2019.

The complaint says McKinsey developed Purdue’s strategy of targeting its marketing to the physicians who prescribed the most opioids. McKinsey advised the company to band together with other opioid manufacturers to lobby against stricter FDA regulation. In 2013, McKinsey developed a strategy to increase sales of OxyContin, including targeting high-volume prescribers with more marketing and sales visits, marketing higher dosages, and trying to develop new ways of providing OxyContin, potentially through direct sales to consumers through mail-order pharmacies, in order to circumvent retail pharmacy restrictions on suspicious, high-dose prescriptions.

McKinsey proposed giving health insurers and pharmacies rebates for every overdose or instance of opioid use disorder attributable to Purdue Pharma pills.

The company also convinced Purdue Pharma to try to manufacture addiction treatment medication.

After Massachusetts filed the lawsuit, McKinsey consultants discussed deleting documents related to their Purdue Pharma work. (McKinsey says it fired the two partners who discussed deleting documents.)

Amid lawsuits and growing scrutiny, McKinsey advised Purdue on a strategy for exiting the opioid market, which included continuing to sell opioids to fund new ventures.

Beyond Purdue Pharma, the complaint says McKinsey worked for other opioid manufacturers, including Johnson & Johnson and Endo, advising them how to boost sales. It was also working at the same time for governments and nonprofits seeking to abate the opioid crisis.

Under the settlement, also filed with Suffolk Superior Court, McKinsey does not admit to any wrongdoing.

McKinsey agrees not to accept any future opioid-related work. The company agrees to formalize a system for preserving documents and to create a policy requiring the disclosure of conflicts of interest.

Within nine months, McKinsey agrees to disclose to the attorneys general tens of thousands of internal documents related to the company’s work with Purdue Pharma and other opioid manufacturers. The attorneys general will be allowed to make the documents public.

While most of the settlement will be distributed directly to participating states, $15 million will go to the National Association of Attorneys General, to reimburse investigative costs and to set up a national document repository to store the newly disclosed documents.

“The public document repository is important because it ensures the full story of McKinsey’s opioid misconduct will now be known in perpetuity with full transparency,” Healey said.

The documents will also likely be relevant to ongoing lawsuits against Purdue Pharma and other opioid manufacturers and distributors. While Purdue Pharma reached an $8 billion settlement with the US Department of Justice and 24 states, Healey and other attorney generals opposed it, and Healey has said she will continue her Massachusetts-based lawsuit against the company.

Other settlement talks are ongoing in lawsuits against drug distributors and manufacturers. Attorneys general involved in the McKinsey settlement said an agreement was able to be reached quickly in this case because McKinsey was willing to come to the table, and they hope other companies will do the same.

“We do not want to be in litigation for years on this spending money and resources while people are dying,” said Colorado Attorney General Phil Weiser on a conference call with reporters. “We want to get fair settlements now. This shows what taking responsibility looks like. Others need to follow suit.”