McKinsey to Pay at Least $500 Million in DOJ Opioid Probe
McKinsey & Co. is nearing a deal with US prosecutors to pay at least $500 million to settle federal probes into its past work helping opioid makers boost sales, according to people familiar with the matter.
A settlement, which could be announced in the coming weeks, would resolve criminal and civil investigations by the Justice Department, said the people, who asked not to be identified discussing a confidential matter. The terms haven’t been finalized and could still change.
Representatives for the Justice Department and McKinsey declined to comment.
The settlement would add to penalties that McKinsey has already paid US states for its past work with drug companies that produced highly-addictive painkillers. The privately held firm, which said it generated a record $16 billion in revenue last year, agreed in 2021 to pay hundreds of millions of dollars to settle claims by states that it helped fuel the country’s opioid epidemic by providing sales analysis and marketing advice.
At the time, McKinsey has denied allegations of wrongdoing and said its past work was legal. The firm also said in 2019 it would no longer consult with companies that made the opioid-based pain pills.
“Our past work for opioid manufacturers, while lawful, fell short of the high standards we set for ourselves,” the firm said in a statement on its website last updated in May. “We have implemented a rigorous client selection policy and spent approximately $1 billion building, enhancing, and operating our risk, legal, and compliance functions since 2018.”
US attorneys offices in Boston and Roanoke, Virginia, have been working on the federal investigation, along with Justice Department attorneys in Washington, said the people.
Thousands of state and local governments have targeted opioid makers and distributors in hopes of recouping billions in tax dollars spent dealing with the fallout of the country’s opioid epidemic.
Bloomberg Law has reported that a US judge greenlit a McKinsey proposal to pay $230 million to settle claims brought by cities and states and that the firm continues to face legal threats over its past work.
From 1999 to 2021, nearly 645,000 people died from an overdose involving any opioid, including both prescription and illicit opioids. The US began to see a rapid increase in overdose deaths in the 2010s. In the few years since the beginning of the Covid-19 pandemic, synthetic opioids have driven hundreds of thousands of additional deaths.