The United States Attorney's Office alongside other federal officials on Friday announced the resolution of criminal and civil investigations into McKinsey & Company's work with Purdue Pharma.
NBC News and CNBC, citing court filings, reported Friday morning that McKinsey has agreed to pay $650 million in a five-year deferred prosecution agreement that will resolve a federal criminal probe into the company's consulting work advising Purdue Pharma on how to "turbocharge" sales of its addictive opioid drug OxyContin.
"This is a case about real people, this is a case about thousands of people who lost their lives to opioid addiction," Joshua Levy, U.S. Attorney for the District of Massachusetts, said at a press conference at the Moakley Federal Courthouse in Boston Friday.
The painkillers have helped fuel the deadly U.S. opioid epidemic. Christopher R. Kavanaugh, U.S. Attorney for the Western District of Virginia, said McKinsey in its capacity as a consulting firm was brought in by Purdue Pharma to help make up lost sales. The company eventually came up with a plan to get those sales back by targeting what they called "high-value" prescribers, knowingly looking at those who may be prescribing the drug for unsafe or medically unnecessary reasons, Kavanaugh said. This strategy was then used by Purdue for years.
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"Here in Massachusetts we are losing about five people a day to overdose," explained Julie Burns, who works as head of the RIZE Massachusetts Foundation to end the opioid crisis in the Commonwealth.
"I think it is going to send a very clear message to other companies that if you engage in practices that are outside the law you are going to be held accountable," Burns said of the landmark settlement.
But though the settlement is a step forward, it's too late for families who have lost loved ones.
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"$650 million is not going to bring my kids back, but it will surely help save somebody else I hope," said Cheryl Juaire, who lost her son Corey in 2011 and his brother Sean 10 years later to opioid overdoses.
A former senior partner at the consulting firm, Martin Elling, has also agreed to plead guilty to obstruction of justice next month in the Department of Justice's probe, CNBC reports, citing a filing in U.S. District Court in Abingdon, Virginia.
According to the criminal charging document, McKinsey "knowingly and intentionally" conspired with Purdue Pharma "and others to aid and abet the misbranding of prescription drugs," CNBC reports. Through then-partner Elling, McKinsey is also accused of "knowingly destroying and concealing records and documents with the intent" to impede the DOJ's investigation.
Elling is scheduled to enter his plea on Jan. 10, 2025, according to NBC News.
McKinsey accepted responsibility for the alleged conduct in the deferred prosecution agreement, federal officials said at Friday's presser. The consulting giant has previously agreed to pay almost $1 billion to settle lawsuits by states, local governments and others related to its opioid consulting.
CNBC and NBC News contributed to this report
