Attorney General Ellison joins $573M multistate settlement with McKinsey & Company
Resolves claims against consulting firm for its role in ‘turbocharging’ opioid epidemic with Purdue Pharma; Minnesota to receive $8M for abatement in first opioid settlement to result in substantial payment; McKinsey also required to make documents public
February 4, 2021 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that he has joined a coalition of attorneys general from 47 states, the District of Columbia, and five U.S. territories in a $573 million settlement with McKinsey & Company, one of the world’s largest consulting firms. The settlement resolves investigations into the company’s role in working for opioid companies, helping those companies promote their drugs, and profiting from the opioid epidemic.
Funds from the settlement will be used to abate the damage that the opioid epidemic has wrought in Minnesota and the participating states. Minnesota will receive more than $7.98 million from the multistate settlement, with $6.6 million paid within 60 days of the settlement and the remainder paid over four years. Under state law, the Opioid Epidemic Response Advisory Council will help facilitate distribution of this money to fund abatement efforts throughout Minnesota. This is the first multistate opioid settlement to result in substantial payment to the states to address the epidemic.
In addition to providing funds to address the crisis, the agreement calls for McKinsey to prepare tens of thousands of its internal documents that detail its work for Purdue Pharma and other opioid companies for public disclosure online. In addition, McKinsey agreed to adopt a strict document-retention plan, continue its investigation into allegations that two of its partners tried to destroy documents in response to investigations of Purdue Pharma, implement a strict ethics code that all partners must agree to each year, and stop advising companies on potentially dangerous Schedule II and III narcotics.
“No amount of money can make Minnesota families and communities whole for the death and destruction that Purdue, other companies, and those that advised them have caused in the opioid crisis,” Attorney General Ellison said. “McKinsey played a key role in creating marketing strategies that opioid manufacturers used to drive up sales and profit at the cost of Minnesotans’ lives. This settlement ensures they’re held accountable for it.
“It’s also critically important that we’re requiring McKinsey to disclose its internal documents. We need to shine daylight on exactly how McKinsey, Purdue, and everyone responsible for the opioid crisis caused the death and destruction they did, so that no one can ever do it again,” Attorney General Ellison continued.
Today’s filings describe how McKinsey contributed to the opioid crisis by promoting marketing schemes and consulting services to opioid manufacturers, including OxyContin maker Purdue Pharma, for more than a decade. The complaint, filed with the settlement, details how McKinsey advised Purdue on how to maximize profits from its opioid products, including targeting high-volume opioid prescribers, using specific messaging to get physicians to prescribe more OxyContin to more patients, and circumventing pharmacy restrictions in order to deliver high-dose prescriptions. Internal Purdue documents described McKinsey’s work as “turbocharging” its sales of Oxycontin.
When states began to sue Purdue’s directors for their implementation of McKinsey’s marketing schemes, McKinsey partners began emailing about deleting documents and emails related to their work for Purdue.
The opioid epidemic has led to considerable harm to people and communities in Minnesota over the last 20 years. During this time, nearly 5,000 Minnesotans have died from an opioid-involved overdose. Opioid addiction, abuse, and overdose deaths have torn families apart, damaged relationships, and eroded the social fabric of communities. The opioid epidemic has also created considerable costs to Minnesota in the form of health care, child welfare, criminal justice, and many other programs needed to respond to the epidemic.
Today’s filing is the latest action that Attorney General Keith Ellison and his office have taken to combat the opioid epidemic and to hold accountable those who are responsible for creating and fueling the crisis. The Attorney General’s Office has a pending lawsuit against Purdue Pharma and its owners, the Sackler family, for their role in fostering and sustaining the opioid epidemic. After Purdue Pharma filed for bankruptcy in September 2019, Attorney General Ellison has continued to pursue the action in bankruptcy court as part of a bipartisan coalition of state attorneys general.
The Attorney General’s Office also filed suit against Insys Therapeutics in 2018, which successfully resolved after the company filed for bankruptcy in 2019. The Office is also an active participant in ongoing multistate investigations and negotiations with several other opioid manufacturers and distributors.
In 2019, the Minnesota legislature created an opioid stewardship fund, an initiative that Attorney General Ellison supported, that imposed registration fees on opioid manufacturers and distributors, directed any funds recovered by the State from its opioid litigation into a special fund, and created the Opioid Epidemic Response Advisory Council, whose purpose is to use those funds for opioid education, prevention, treatment, and recovery. Without this law, proceeds from any opioid settlement would have gone into the General Fund and could have been appropriated for any purpose; now, however, they will be dedicated to the express purpose of abating this crisis.
The states’ investigation was led by an executive committee made up of the attorneys general of California, Colorado, Connecticut, Massachusetts, New York, North Carolina, Oklahoma, Oregon, Tennessee, and Vermont. The executive committee is joined by Attorney General Ellison and the attorneys general of Alabama, Alaska, Arizona, Arkansas, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Texas, Utah, Virginia, Wisconsin, Wyoming, the District of Columbia, and the territories of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.