McKinsey Under Criminal Investigation for Advising Opioid Manufacturers on Boosting Sales

The U.S. Department of Justice is conducting a criminal investigation into McKinsey & Company for its role in advising major opioid manufacturers, as the firm faces higher stakes than previous civil settlements, including potential criminal charges and penalties.

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Nimrah Khatoon
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McKinsey Under Criminal Investigation for Advising Opioid Manufacturers on Boosting Sales

McKinsey Under Criminal Investigation for Advising Opioid Manufacturers on Boosting Sales

The U.S. Department of Justice is conducting a criminal investigation into McKinsey & Company for its role in advising major opioid manufacturers, including Purdue Pharma, Endo International, and Mallinckrodt, on increasing sales of opioid drugs. Federal prosecutors are also examining whether McKinsey or any of its employees obstructed justice in relation to records of its consulting services for opioid producers.

The investigation, which has been ongoing for several years, is being led by U.S. attorneys' offices in Massachusetts and the Western District of Virginia, in coordination with the Justice Department's civil division. A grand jury has been seated in Virginia as part of the probe.

McKinsey previously reached a $642 million settlement with all 50 states and other entities in 2021 over its opioid-related consulting work, without admitting wrongdoing. The firm's former clients, Purdue, Endo, and Mallinckrodt, filed for bankruptcy while facing mass lawsuits alleging they sold drugs through misleading marketing practices, worsening the opioid addiction crisis.

Why this matters: The criminal investigation into McKinsey's opioid-related consulting highlights the continued scrutiny of the firm's involvement in the opioid epidemic, which has claimed hundreds of thousands of American lives. The probe carries higher stakes than previous civil settlements, including the potential for criminal charges against the company or its executives, as well as significant financial penalties.

Internal communications have surfaced during the investigation, including a 2018 email from a former McKinsey executive discussing the firm's legal risk and the potential need to "eliminate all our documents and emails." McKinsey made around $86 million advising Purdue Pharma, with the bulk of the work occurring after the company's 2007 guilty plea for misleading regulators, doctors, and patients about the dangers of OxyContin.

The criminal investigation into McKinsey's opioid-related consulting is a significant development in the ongoing legal battle surrounding the opioid epidemic. Prosecutors are still examining documents and engaging in discussions with McKinsey's lawyers, and no charging decisions have been made yet. The probe emphasizes the importance of ethical business practices in consulting, where consultants' advice and actions can have substantial societal impacts.

Key Takeaways

  • DOJ investigating McKinsey for advising opioid makers on increasing sales
  • Prosecutors examining if McKinsey obstructed justice in opioid consulting records
  • McKinsey previously paid $642M settlement over opioid-related work, no wrongdoing admitted
  • Internal emails suggest McKinsey discussed eliminating documents on opioid work
  • Criminal probe highlights ethical concerns in consulting's societal impact