McKinsey & Company agrees to pay $650 million to resolve a Justice Department investigation into the consulting firm's work advising opioid maker OxyContin maker Purdue Pharma on how to increase sales did.
McKinsey has filed a five-year lawsuit in federal court in Abingdon, Virginia, to resolve criminal charges brought as part of a rare corporate prosecution related to the sale of addictive painkillers that fueled America's deadly opioid epidemic. A grace contract was concluded.
Prosecutors said McKinsey advised Stamford, Conn.-based Purdue on steps it could take to “increase” OxyContin sales.
He was charged with conspiracy to misbrand drugs and obstruction of justice.
Former McKinsey senior partner Martin Elling also agreed to plead guilty to obstruction of justice for destroying records related to McKinsey's work at Purdue, according to court documents.
He plans to enter his plea on January 10th.
According to court documents, Elling deleted documents related to his job at Purdue from his work laptop and sent himself an email urging him to do so.
McKinsey said in a statement that it “deeply regrets the actions of a former partner in deleting documents related to his past client service and work for Purdue Pharma.”
“We should have recognized the harm that opioids are causing in our society, and Purdue Pharma's sales and marketing efforts should not have been made. Our past efforts will always be a source of deep regret for our company.”
Mr. Elling's lawyer declined to comment.
As part of the deferred prosecution agreement, McKinsey will pay $650 million over five years to improve its compliance practices to detect illegal activity and submit to oversight by the Department of Justice and the U.S. Department of Health and Human Services Office of Inspector General. The company said it agreed.
The consulting firm also agreed to resolve a related civil investigation into alleged violations of the False Claims Act and enter into a “corporate integrity” agreement with the HHS Office of Inspector General, the company said.
Purdue pled guilty in 2020 to criminal charges surrounding widespread fraud in its handling of prescription painkillers, including conspiring to defraud U.S. officials and pay illegal kickbacks to both doctors and electronic medical records vendors.
Purdue is currently participating in court-ordered mediation over a multibillion-dollar settlement reached in a bankruptcy case that was rejected by the U.S. Supreme Court.
Purdue said in a statement Friday that it is working to reach consensus on a plan to create a new company that will “deliver billions of dollars of value to opioid reduction” and be an “engine for good.”
Purdue said the settlement is also intended to compensate victims.
McKinsey previously reached an agreement totaling nearly $1 billion to resolve a wide range of lawsuits and other legal claims alleging that it fueled the opioid epidemic through its advice to OxyContin maker Purdue Pharma and other drug companies. was.
In 2019, McKinsey announced it would no longer advise clients on opioid-related businesses.
The company maintains that the settlement does not include any admission of liability or wrongdoing.
