McKinsey & Co Settles for $650 Million

By Nate Raymond and Mike Spector
BOSTON (Reuters) – McKinsey & Co has agreed to pay $650 million to resolve a U.S. Department of Justice investigation concerning its advisory role to Purdue Pharma, the maker of OxyContin, regarding sales strategies.

McKinsey has entered a five-year deferred prosecution agreement filed in federal court in Abingdon, Virginia, to address criminal charges linked to the marketing of addictive painkillers that contributed to the U.S. opioid epidemic.

Prosecutors alleged that McKinsey provided Purdue, based in Stamford, Connecticut, with advice to "turbocharge" OxyContin sales. The charges included conspiring to misbrand a drug and obstruction of justice.

Additionally, a former senior partner at McKinsey, Martin Elling, has agreed to plead guilty to obstruction of justice for destroying records related to McKinsey's work for Purdue, with his plea scheduled for January 10.

Neither McKinsey nor Elling's lawyer responded immediately for comments. Previously, McKinsey reached agreements amounting to nearly $1 billion to settle lawsuits alleging it contributed to the opioid crisis via its work with Purdue and other drugmakers.

These settlements involved all 50 states, Washington, D.C., U.S. territories, various local governments, school districts, Native American tribes, and health insurers.

In 2019, McKinsey stated it would no longer advise clients on opioid-related businesses while maintaining that none of its settlements indicated any admission of liability or wrongdoing.

Purdue Pharma pleaded guilty in 2020 to criminal charges related to its management of prescription painkillers, including defrauding U.S. officials and making illegal kickbacks to doctors and a healthcare records vendor. Purdue is currently in court-ordered mediation for a multimillion-dollar settlement stemming from bankruptcy proceedings, recently dismissed by the U.S. Supreme Court.