$650M Deal Means Firm Won’t Face Prosecution For Encouraging OxyContin Sales

The United States Department of Justice has reached an out-of-court resolution with New York-based consulting firm McKinsey & Company, which was accused of advising opioid manufacturer Purdue Pharma to push OxyContin sales.

Under a series of agreements, McKinsey will be required to pay more than $650 million, the Justice Department announced Friday. In return, federal prosecutors will dismiss current charges against the company without a formal trial or an admission of guilt from McKinsey.

Purdue Pharma used McKinsey’s consulting services as opioid overdose rates rose nationally. In a corporate memo obtained by the Justice Department, McKinsey advised the manufacturer to “turbocharge” its sales of OxyContin.

Overprescription of the drug has been widely cited as a cause of the U.S. opioid crisis. Opioid overdoses have claimed tens of thousands of lives in the past two decades, including the death of more than 9,000 West Virginians between 2014 and 2022, according to the Centers for Disease Control and Prevention.

Under the agreement, McKinsey will pay $231 million in penalty fees and forfeit the $93 million it was paid by Purdue Pharma between 2004 and 2019. The company will also pay $2 million to the Virginia Medicaid Fraud Control Unit to resolve criminal allegations, and $323 million in civil agreement payments.

Additionally, one former senior partner at McKinsey, Martin Elling, has agreed to plead guilty to felony obstruction of justice for deleting “various Purdue-related electronic materials from his McKinsey laptop… to obstruct future investigations,” according to Christopher Kavanaugh, U.S. attorney for the Western District of Virginia.

In a statement sent to National Public Radio on Friday, McKinsey apologized for its role advising Purdue Pharma, and “the actions of a former partner who deleted documents related to his work for that client.”

Purdue Pharma has been embroiled in its own years-long legal battle over its role in the U.S. opioid crisis. The manufacturer pleaded guilty to federal charges in 2007 and 2020.

In June, the U.S. Supreme Court rejected a deal that would have granted the company and its staff immunity from civil charges for its role in the crisis in exchange for $6 billion in payments.

But no executives from Purdue Pharma have been individually charged for their role in the opioid crisis. Under its agreement with the Justice Department, Elling is the only McKinsey executive eligible to face criminal charges for encouraging the sale of prescription opioids. He will face sentencing at a later date, according to the Friday press release.