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HomeBusinessMcKinsey pays $230m settlement for opioid lawsuits.

McKinsey pays $230m settlement for opioid lawsuits.

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McKinsey & Co. is facing a settlement of $230 million in lawsuits accusing the consulting firm of advising opioid manufacturers in their sales of highly addictive painkillers. The proposed settlement, filed in court on Tuesday, aims to resolve allegations that McKinsey contributed to the country’s opioid epidemic by providing sales analysis and marketing advice to companies such as Purdue Pharma LP and Johnson & Johnson. The settlement involves school districts and local governments that did not join McKinsey’s previous settlements in 2021 with state attorneys general. Overall, McKinsey has already paid over $640 million to settle opioid-related lawsuits.

Over 3,000 state and local governments have sued opioid makers, distributors, and sellers seeking compensation for the public health crisis caused by these painkillers, and it is estimated that total recoveries across the US will exceed $50 billion once all payments are made. In New York’s lawsuit, McKinsey’s role in the crisis was detailed, including allegedly advising Purdue to increase sales calls to high-prescribing OxyContin doctors and encouraging them to write high-dose prescriptions. The fallout from the crisis continues as the US Supreme Court recently took up the Biden administration’s attempt to undo Purdue’s $6 billion opioid settlement, arguing that it improperly protects the Sackler family, who own the company.

McKinsey has admitted that its consulting work for opioid manufacturers fell short of its high standards, even though it claimed it was lawful. The company stated that it failed to adequately acknowledge the epidemic and ended all work on opioid-specific business years ago. McKinsey also implemented corporate governance reforms to align its practices with its values and social responsibility. The settlement with McKinsey now awaits approval from US District Judge Charles Breyer in San Francisco. The case is titled McKinsey & Co. Inc. National Prescription Opiate Consultant Litigation.

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