McKinsey & Co. Agrees to $78 Million Settlement in Opioid Crisis Case

Global consulting firm McKinsey & Co. has reached a $78 million settlement to resolve claims from insurers and healthcare funds alleging that its collaboration with drug companies contributed to the opioid addiction crisis. The settlement, which is yet to receive judicial approval, involves McKinsey establishing a fund to reimburse insurers and private benefit plans for a portion or all of their prescription opioid costs.

Insurers asserted that McKinsey worked in tandem with Purdue Pharma, the manufacturer of OxyContin, employing aggressive marketing and sales strategies to overcome doctors' reservations about highly addictive opioids. This allegedly compelled insurers to cover the costs of prescription opioids instead of safer, non-addictive, and more cost-effective alternatives, including over-the-counter pain medication. The insurers further contended that they had to bear the expenses of opioid addiction treatment.

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The opioid crisis, resulting in nearly 280,000 deaths from prescription opioid overdoses in the U.S. between 1999 and 2021, prompted insurers to accuse McKinsey of collaboration with Purdue Pharma even when the crisis's magnitude became apparent.

This settlement marks a continuation of efforts to hold McKinsey accountable for its role in the opioid epidemic. In February 2021, the company agreed to pay almost $600 million to U.S. states, the District of Columbia, and five U.S. territories. Subsequently, in September, McKinsey announced a separate $230 million settlement with school districts and local governments.

In response to inquiries, McKinsey referred to a statement from September, emphasizing its belief that its past work was lawful and denying any allegations to the contrary. The company stated that the settlement was reached to avoid prolonged litigation and underscored that it ceased advising clients on any opioid-related business in 2019.