Firm Pays $16M to NJ Over 'Turbocharge' Marketing of Opioids

A global consulting firm accused of helping to fuel the opioid epidemic through aggressive marketing ideas for prescription painkillers has entered into a settlement with New Jersey and 46 other states.

McKinsey & Co. will pay $573 million, of which $16 million will go to New Jersey, Attorney General Gurbir Grewal announced Thursday.

As part of the deal, McKinsey does not admit any wrongdoing in its dealings with the nation’s largest opioid manufacturers, including Purdue Pharma.

The firm will be publicly releasing “tens of thousands of its internal documents” of consulting communication with Purdue and a few other companies within the opioid business, under the terms of the deal.

McKinsey sold its ideas to Purdue for 15 years on ways to “Turbocharge Purdue’s Sales Engine,” according to Grewal, from 2004 until 2019.

In the U.S., there were 67,367 drug overdose deaths reported in 2018 alone, nearly 70% of which were opioids related, according to the National Institute on drug abuse.

Those plans encouraged Purdue pharmaceutical sales reps to make frequent visits to high-volume OxyContin prescribers – some of whom were writing 25 times more prescriptions for OxyContin than their lower-volume counterparts, according to the consent order filed on Tuesday in Mercer County.

As an example, Purdue learned that one doctor was known by patients as “the Candyman” and was prescribing “crazy dosing of OxyContin,” yet Purdue had sales representatives meet with the doctor more than 300 times, according to federal prosecutors in October 2020 when they outlined Purdue’s own settlement. The company agreed to pay $8.34 billion in damages and pleading guilty in New Jersey to three felony counts of conspiracy.

McKinsey also suggested that Purdue focus on pitching sales of higher, more powerful prescription dosages, according to a federal complaint.

When a large pharmacy chain began to more closely look at “suspicious opioid orders,” the firm advised Purdue’s owners (members of the Sackler family) to start exploring mail-delivery options for OxyContin patients, the same complaint said.

McKinsey continued to design and develop new ways for Purdue to boost its OxyContin sales “well after the opioid epidemic had peaked, and then played both ends of the epidemic by advising Purdue on the profit potential of manufacturing and marketing opioid rescue and treatment medications,” according to Grewal.

In addition to Purdue, McKinsey also worked with other, large-scale opioid manufacturers including Johnson & Johnson and Endo, the attorney general noted.

“McKinsey is paying much more than the money it made advising opioid manufacturers like Purdue Pharma on how to sell more of their addictive drugs. We look forward to making Purdue and other opioid manufacturers also pay to help New Jersey overcome and heal from the epidemic they unleashed,” Grewal said in a written statement.

This is the first multi-state opioid settlement to result in substantial payment to the states, as well as to Washington D.C. and five U.S. territories.

Washington state announced a separate $13.5 million deal and West Virginia announced a $10 million settlement, according to the Associated Press, leaving Nevada as the only U.S. state that has not announced a deal with McKinsey.

Under the consent order filed Thursday, the settlement funds, minus costs related to the investigation — will be used by New Jersey and other participants to address the ongoing opioid epidemic.

Opioids, which include prescription drugs and illegal substances such as heroin and illicit fentanyl, have been linked to more than 470,000 deaths in the U.S. since 2000, as reported by the Associated Press.

New Jersey has filed lawsuits against Purdue and the Sackler family, Grewal said, accusing them of a "greed-driven push to flood the market with OxyContin and other opioid products – including the targeting of such vulnerable populations as the elderly and children — was responsible for the opioid epidemic."

Those claims against Purdue and the Sacklers are part of a case pending in U.S. Bankruptcy Court for the Southern District of New York.