McKinsey Sued Over Consultative Role in OxyContin Promotion

A class action lawsuit filed in West Virginia federal court on January 31, 2021, seeks to hold the behemoth consulting firm McKinsey & Company accountable for its role in boosting the sales of opioid painkiller, OxyContin. According to the complaint, McKinsey advised OxyContin maker, Purdue Pharma, on how to grow sales and expand marketing strategies for the drug. This consultation allegedly occurred in the thick of the nation’s opioid crisis, fanning the flames of addiction. The legal action against McKinsey comes just months after Purdue Pharma pled guilty to three criminal felonies related to OxyContin’s distribution and related abuse during the opioid crisis.

West Virginia Takes Action

The case was brought by the County Commission of Mingo County and the Town of Kermit, West Virginia— an area hit particularly hard by opioid addiction. Over the course of a two-year period, about nine million prescription painkiller pills were shipped to a single pharmacy in the tiny town of Kermit, population 392. Kermit sits in Mingo County, which has the fourth-highest prescription opioid death rate of any county in the United States.

Across the state, Purdue and other pharmaceutical companies supplied nearly 780 million oxycodone and hydrocodone pills from 2007-2012. That volume of highly addictive pain killers equals roughly 433 pills for every citizen of the state. During that time, 1,728 West Virginians lost their lives to overdose on these two drugs.

According to this West Virginia municipality, Purdue’s acute opioid infiltration could not have been achieved without the guidance from McKinsey & Company.

The County Commission of Mingo County et al. v. McKinsey & Company, Inc.

The complaint begins by citing a 2007 settlement in which Purdue Pharma admitted to misbranding OxyContin in its marketing. John Brownlee, United States Attorney for the Western District of Virginia, stated, “[E]ven in the face of warnings from health care professionals, the media, and members of its own sales force that OxyContin was being widely abused and causing harm to our citizens, Purdue, … continued to push a fraudulent marketing campaign that promoted OxyContin as less addictive, less subject to abuse, and less likely to cause withdrawal.”

In reality, OxyContin abuse resulted in scores of deaths in West Virginia. In the settlement, Purdue agreed to comply with a Corporate Integrity Agreement containing strict terms on fair and accurate information and reporting on the sale of its products including, OxyContin.

The plaintiffs in the Mingo County class action against McKinsey allege that following the 2007 guilty plea, Purdue’s controlling shareholders—the Sackler family—decided they needed a new strategy. They set out to dramatically grow OxyContin sales to attract a pharmaceutical company acquirer or to appear creditworthy to a lender. The family’s goal was to get out of the opioid market, so they hired McKinsey & Company to help them accomplish this.

McKinsey’s Role

The plaintiffs allege that despite the Corporate Integrity Agreement, McKinsey and Purdue partnered to increase sales of Purdue’s opioids starting in 2009. McKinsey and Purdue worked closely together to create and implement an OxyContin sales strategy. The complaint claims this strategy perpetuated fraudulent claims concerning the effects of OxyContin and that McKinsey “is liable for its successful efforts to increase OxyContin sales after Purdue’s 2007 guilty plea for misbranding the drug.”

The complaint says that one of the first things McKinsey did was tell Purdue that Walgreens’ OxyContin units were down 18%, affecting high dosage sales. McKinsey’s solution was to advise Purdue to lobby Walgreens’ owners to increase sales. The consultants also suggested Purdue set up a direct-mail specialty pharmacy for direct sales to Walgreens’ customers. A prime tactic was the launch of “opioid savings cards distributed in neighborhoods with Walgreens locations to encourage the use of OxyContin.”

In Partnership with Purdue

The plaintiffs further assert that in 2009, McKinsey partnered with Purdue’s Chief Medical Officer and team to assess how to “counter emotional messages from mothers with teenagers that overdosed in [sic] OxyContin.” McKinsey devised OxyContin messaging “based on the false and misleading notion that the drug can provide “freedom” and “peace of mind” for its users, and concomitantly reduce stress and isolation.”

The complaint also cites a 2010 McKinsey initiative to identify the most prolific OxyContin prescribers and shift sales resources to focus on these medical professionals. The plaintiffs assert that the sales strategy was to convince the high prescribers to prescribe “even more OxyContin, in higher doses, for longer times, to ever more patients.” This McKinsey plan advised increasing quotas and incentives to motivate sales representatives to go after certain high-volume prescribers. According to the plaintiffs, McKinsey’s consultation worked. In 2007 net sales of OxyContin were approximately $1 billion. With McKinsey’s help, by 2010, OxyContin sales exceeded $3 billion: “a tripling of revenue from OxyContin sales.”

McKinsey’s Project Turbocharge

The plaintiffs also highlight a 2014 McKinsey initiative called Project Turbocharge. McKinsey told executives they must again double down on high-value prescribers to increase profits. McKinsey again urged a granular sales approach—shifting more representative selling time to OxyContin. Purdue Pharma redubbed the project “Evolve to Excellence”. This McKinsey project became the linchpin of the company’s 2014 national sales meeting.

The Causes of Action

On behalf of the proposed class—all counties and municipal corporations in the State of West Virginia from 2004 to the present—plaintiffs claim that McKinsey & Company owed a duty of care to not encourage over-marketing and over-prescribing an addictive controlled substance known to be a threat to public health. McKinsey failed in this duty with misleading claims about OxyContin and through its efforts to increase prescriptions. The plaintiffs further assert that McKinsey was negligent in their representation of the drug to healthcare providers. The company allegedly provided inaccurate materials regarding OxyContin prescriptions.

The complaint also names public nuisance as another cause of action. The plaintiffs say McKinsey’s misrepresentations and omissions on opioids fueled an epidemic in Mingo County and West Virginia. The complaint states that McKinsey’s downplaying of the opioid addiction risks and side-effects constitute fraud and deceit.

The plaintiffs first seek class certification, followed by damage awards for the damage caused by the opioid pandemic. This includes payment for medical treatment, rehabilitation services, and treatment for infants born with opioid-related medical conditions.

Recent Legal Outcomes

Purdue Guilty Plea

In October 2020, Purdue—McKinsey’s co-conspirator, according to the plaintiffs—again pled guilty to improper marketing of OxyContin. This plea agreement with the U.S. Department of Justice covered conduct from 2010 to 2018, and among other charges, related to Purdue opioid sales and marketing practices after the abovementioned 2007 guilty plea.

McKinsey Settles with 47 State Attorneys General

In early February 2021, McKinsey agreed to a $573 million settlement agreement with attorneys general in 47 states, the District of Columbia, and five territories. In addition, separate agreements were reached with Washington State ($13 million) and West Virginia ($10 million). McKinsey’s efforts to drive sales of OxyContin in an opioid crisis were central to this settlement.

As this recent settlement touches on many of the Mingo County allegations, it’s likely to play a large role in McKinsey’s approach to this latest OxyContin class action.