McKinsey to Pay $650 Million in Opioid Settlement With Justice Department

McKinsey & Company has agreed to pay $650 million to settle a Justice Department investigation of its work with the opioid maker Purdue Pharma. A former senior partner has also agreed to plead guilty to obstruction of justice for destroying internal company records in connection with that work.

At the center of the government’s case was the global consulting giant’s recommendation that Purdue Pharma “turbocharge” sales of Purdue’s flagship OxyContin painkiller in the midst of an opioid addiction epidemic that was killing hundreds of thousands of Americans.

The settlement and the government’s findings were presented at a news conference in Boston on Friday. According to prosecutors, McKinsey “knew the risks and dangers associated with OxyContin,” as well as the fact that top Purdue Pharma executives had pleaded guilty to federal crimes relating to sales of the drug. Yet the consulting company chose to continue working with the drugmaker to boost sales of the opioid.

More than two dozen McKinsey partners consulted for Purdue over roughly 15 years, earning the firm $93 million.

The settlement, which the government said ended its investigation of McKinsey, stemmed from charges brought by the U.S. attorney’s offices in Massachusetts and the Western District of Virginia. The case is unrelated to Purdue Pharma’s multibillion-dollar bankruptcy plan, now in legal limbo, that would have offered compensation to tens of thousands of families. Still, the McKinsey settlement brings closure to one strand of a broad legal effort to grapple with the industry behind the opioid epidemic.

McKinsey is widely regarded as the world’s most prestigious management consulting firm, with offices around the globe from which it advises most of the Fortune 500 companies as well as government agencies, including those in authoritarian nations such as China and Saudi Arabia.