McKinsey & Co., one of the largest management consulting firms in the United States, has reached a proposed settlement of $230 million in lawsuits filed by local governments and school districts. These lawsuits allege that McKinsey played a pivotal role in exacerbating the opioid epidemic by providing sales analysis and marketing advice to Purdue Pharma LP and Johnson & Johnson, two major opioid manufacturers.
Over 3,000 state and local governments have previously taken legal action against various stakeholders in the opioid industry, seeking restitution for the billions of dollars expended in a combined public health crisis stemming from painkiller abuse. It is anticipated that total recoveries in the U.S. will exceed $50 billion once all settlements are finalized.
This latest settlement specifically addresses the school districts and local governments that opted out of McKinsey's prior 2021 settlements with 50 state attorneys general. To date, McKinsey has already disbursed nearly $640 million to resolve lawsuits related to its involvement in the opioid crisis.
Additionally, revelations emerging from these lawsuits and settlements have shed light on McKinsey's specific contributions to the opioid epidemic. New York's claims, for instance, assert that the consulting firm advised Purdue on tactics such as increasing sales calls to high-prescribing OxyContin doctors, encouraging them to issue high-dose prescriptions, and assessing direct-distribution systems.
The aftermath of the crisis continues to reverberate through legal channels. The Biden administration has recently opposed the $6 billion settlement that Purdue Pharma reached in the U.S. Supreme Court. The Justice Department contends that the agreement unfairly safeguards the interests of Purdue's owners, the Sackler family.
In response to the settlement, McKinsey stated that its consulting services for opioid manufacturers, although deemed legal, fell short of the company's own high standards. The corporation acknowledged that, when it ceased its involvement in opioid-specific business over four years ago, it did not fully grasp the extent of the drug crisis in the U.S. McKinsey asserts that it has since implemented reforms in corporate governance to align with its values and social responsibility.
The proposed settlement now awaits approval from San Francisco U.S. District Judge Charles Breyer. Once approved, this agreement will mark another step towards accountability in the complex web of actors involved in the opioid epidemic, providing some measure of relief for communities struggling with the aftermath of this devastating public health crisis.