McKinsey & Co. has agreed to pay $650 million to resolve a Justice Division investigation into the consulting agency’s work advising opioid producer OxyContin maker Purdue Pharma on increase gross sales.
McKinsey has entered right into a five-year deferred prosecution settlement filed in federal court docket in Abingdon, Va., to resolve prison fees introduced as a part of a uncommon company prosecution in regards to the advertising of addictive painkillers that helped gas the lethal US opioid epidemic.
Prosecutors mentioned that McKinsey supplied Stamford, Conn.-based Purdue recommendation on measures it may take to “turbocharge” OxyContin gross sales.
It was charged with conspiring to misbrand a drug and obstruction of justice.
A former senior accomplice at McKinsey, Martin Elling, has additionally agreed to plead responsible to obstruction of justice for destroying information associated to McKinsey’s work for Purdue, in response to court docket papers.
He’s scheduled to enter his plea on Jan. 10.
Elling deleted paperwork associated to his work for Purdue from his firm laptop computer, sending himself emails to remind himself to take action, in response to court docket papers.
“We are deeply sorry for our past client service to Purdue Pharma and the actions of a former partner who deleted documents related to his work for that client,” McKinsey mentioned in a press release.
“We should have appreciated the harm opioids were causing in our society and we should not have undertaken sales and marketing work for Purdue Pharma. This terrible public health crisis and our past work for opioid manufacturers will always be a source of profound regret for our firm.”
A lawyer for Elling declined to remark.
McKinsey agreed to pay $650 million over 5 years, enhance its compliance practices to detect criminality and undergo oversight from the DOJ and U.S. Division of Well being and Human Providers inspector normal’s workplace as a part of the deferred prosecution settlement, the corporate mentioned.
The consulting agency additionally agreed to resolve a associated civil probe concerning alleged violations of the False Claims Act and enter right into a “corporate integrity” settlement with the HHS inspector normal’s workplace, the corporate mentioned.
Purdue pleaded responsible in 2020 to prison fees overlaying widespread misconduct concerning its dealing with of prescription painkillers, together with conspiring to defraud US officers and pay unlawful kickbacks to each medical doctors and an digital healthcare information vendor.
Purdue is at the moment concerned in court-ordered mediation over a multibillion-dollar settlement reached in chapter proceedings that the US Supreme Court docket turned apart.
In a press release on Friday, Purdue mentioned it was working to forge consensus on the plan to “deliver billions of dollars of value for opioid abatement” and create a brand new firm as an “engine for good.”
Settlement proceeds additionally goal to compensate victims, Purdue mentioned.
McKinsey beforehand reached agreements totaling practically $1 billion to settle widespread lawsuits and different authorized actions alleging the corporate helped gas the opioid epidemic by way of its work advising OxyContin maker Purdue Pharma and different drugmakers.
In 2019, McKinsey introduced it could now not advise purchasers on opioid-related companies.
The corporate has maintained that none of its settlements comprise admissions of legal responsibility or wrongdoing.
