“It was a strategy, it was executed and it worked.” That was U.S. attorney Christopher Kavanaugh, describing at a Friday press conference what McKinsey did for Purdue Pharma. “McKinsey’s strategy resulted in prescriptions for Oxycontin that were unsafe and medically unnecessary,” he said.
The same day, the consulting firm agreed to pay $650 million to end a federal probe into its work for the maker of OxyContin, the Justice Department announced. Internal memos show McKinsey had promised to help Purdue “turbocharge” sales while overdose deaths were climbing across the country.
Charges and the deal
The case came out of U.S. attorney’s offices in Virginia and Massachusetts. The payment covers federal civil and criminal charges, and $2 million of it goes to the Virginia Medicaid Fraud Control Unit. It also comes with a deferred prosecution agreement. The civil portion carries no admission of liability. NPR noted that the agreement itself was not public when its story ran.
Prosecutors said the misdemeanor offense involved “knowingly and intentionally conspiring with Purdue and others to aid and abet the misbranding of prescription drugs.” McKinsey now says it agrees to the “facts and allegations” behind that charge.
The firm has also promised to stay out of any future work involving “controlled substances,” opioids included, and to accept closer federal oversight. Unless it commits further wrongdoing tied to opioids, the executives who ran McKinsey during those years will not face criminal charges or trial.
Kavanaugh called the outcome a first: “This resolution marks the first time a management consulting firm has been criminally responsible for advice it has given resulting in the commission of a crime by a client.”
The deleted files
One former senior partner is in worse trouble. Martin Elling, according to Kavanaugh, “personally deleted various Purdue related electronic materials from his McKinsey laptop with the intent to obstruct future investigations.” Justice Department officials said Elling has agreed to plead guilty to a felony count of obstruction of justice.
McKinsey said in a statement sent to NPR: “We are deeply sorry for our past client service to Purdue Pharma.” It also apologized for the former partner’s deletion of documents. The statement went on: “We should have appreciated the harm opioids were causing in our society and we should not have undertaken sales and marketing work for Purdue Pharma.”
The new payment sits on top of nearly $900 million the firm agreed earlier to pay in opioid settlements with state and local governments.
Critics: no one goes to jail
Purdue pleaded guilty to federal charges in 2007 and again in 2020. After those pleas, none of its executives, employees or owners was tried or served prison time. Corporations have agreed to fines and settlements worth more than $50 billion since the prescription opioid crisis began in the 1990s, yet only a handful of executives have been punished.
“No one goes to jail,” said Ed Bisch, whose son Eddie died of an overdose on Purdue’s OxyContin in 2001. “It has to stop because these companies look on [corporate] fines as a cost of doing business.” Bisch leads a group called Relatives Against Purdue Pharma, which has protested outside Justice Department headquarters in Washington, D.C.
Paul Pelletier, a former Justice Department attorney who worked on a 2006 investigation of Purdue, put it more bluntly. “The corporation just pays the speeding ticket and moves on,” he said.
A Justice Department spokesperson told NPR that charging decisions are “based on the facts of each case,” and that executives face charges only where there is proof beyond a reasonable doubt. Convictions of top opioid executives do happen. In 2019, prosecutors won one against Insys Therapeutics CEO John Kapoor and four other company executives, and they also prosecuted executives of Rochester Drug Co-operative that year.
