McKinsey Settles for $78M in Opioid Case with Insurers

Consulting giant McKinsey & Co. has agreed to a $78 million settlement to resolve claims from insurers and healthcare funds alleging that its consultancy for pharmaceutical companies contributed to the opioid addiction crisis.

This development was disclosed in federal court documents filed in San Francisco, pending a judge's approval. Under the terms of the agreement, McKinsey will create a fund designed to compensate insurers, private benefit plans, and others for a portion or the entirety of their costs related to prescription opioids.

The insurers' lawsuit centered on McKinsey's involvement with Purdue Pharma, the producer of OxyContin. They accused McKinsey of developing and implementing aggressive marketing and sales strategies to mitigate doctors' concerns about the addictive nature of these drugs.

This, according to the insurers, led them to cover the costs of prescription opioids instead of opting for safer, non-addictive, and more affordable alternatives, including over-the-counter pain relievers. Furthermore, the insurers had to bear the financial burden of treatments for opioid addiction.

Statistics from the U.S. Centers for Disease Control indicate that from 1999 to 2021, approximately 280,000 Americans died from overdoses related to prescription opioids. The insurers claimed that McKinsey continued its collaboration with Purdue Pharma even after the magnitude of the opioid crisis became evident.

This settlement is part of a broader effort to hold McKinsey accountable for its alleged role in the opioid epidemic. In February 2021, McKinsey agreed to a nearly $600 million payout to various U.S. states, the District of Columbia, and five U.S. territories. Additionally, in September, the firm announced a separate $230 million settlement with school districts and local governments.

In response to requests for comment, McKinsey reiterated its previous stance, maintaining that its past work was legal and denying any wrongdoing. The company emphasized that the settlement was a strategic move to avoid extended litigation. McKinsey also noted that since 2019, it has ceased advising clients on opioid-related business.

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