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McKinsey is close to paying more than $600 million to settle a criminal investigation into its work advising U.S. opioid manufacturers on how to boost sales, after claims it fueled the nation’s addiction crisis.
The U.S. Justice Department is examining whether McKenzie’s work amounted to a criminal conspiracy against the health care system, and whether he obstructed justice, people familiar with the investigation said.
The settlement could be reached within weeks, one of the people said, and would include a deferred prosecution agreement in which the DoJ would drop charges against the firm after a period of time if conditions were met, along with a settlement of related civil claims. Agrees to. Details of the settlement and likely timing were first reported by Reuters on Thursday.
McKinsey and the DoJ declined to comment.
The $600 million payment would dramatically increase the cost of McKinsey’s historic work for opioid manufacturers, including OxyContin maker Purdue Pharma, for which its consultants “turbocharge” sales. What was promised?
The firm has paid nearly $1 billion in litigation over its opioid work through 2021, including a $640 million settlement with all 50 U.S. states. Other cases are pending.
Rising costs and reputational damage have led to internal turmoil at the firm, with a slowdown in the consulting market putting pressure on partner profits. Former managing partner Kevin Snyder failed to win re-election in 2021, and his successor, Bob Sternfels, narrowly won a second term this year.
At the time of the settlement with the US states, Snyder apologized for McKinsey’s opioid work, saying it “did not adequately acknowledge the tragic consequences of the epidemic in our communities”. The firm insisted its advice was legal, but it has reformed how it decides which clients to take on and has not worked for opioid manufacturers since 2019.
