McKinsey Agrees to Pay Another $650 Million to Avoid Trial Over U.S. Opioid Crisis
(Is it worth 1 month, 1 week, 1 day ... pocket money for them ?)
Author(s) : France Soir, December 17, 2024
McKinsey’s legal troubles over its role in the opioid scandal continue. The U.S. consulting firm agreed last week to pay $650 million in a deferred prosecution agreement with the U.S. government to avoid a criminal trial. The small sum brings the total McKinsey has paid to avoid convictions and settle disputes with multiple communities and civilians to more than $1.5 billion.
Opioids are drugs based on psychoactive substances that act on the part of the brain responsible for pain control. Treatments can be prescribed in different forms such as codeine, fentanyl, morphine or oxycodone, the substance at the origin of the opioid crisis in the United States. Developed and marketed under the name OxyContin by the private laboratory Purdue Pharma, this powerful painkiller is behind the deaths of more than 600,000 people in the United States between 1999 and 2021, according to the Centers for Disease Control and Prevention (CDC). Twelve million Americans are also said to have become addicted to it.
A total of more than one and a half billion dollars
Thousands of lawsuits have been filed by communities, schools, indigenous communities and American citizens, particularly parents of children born with withdrawal symptoms. Pharmaceutical companies are accused of downplaying the risks of opioids. According to the plaintiffs, distributors ignored warning signs while the consulting firm McKinsey developed aggressive marketing strategies and “deceptive” marketing plans to “maximize revenue” for its clients.
The lawsuits have resulted in major manufacturers and distributors paying out more than $51 billion in total. As for McKinsey, the amount continues to climb by the month. In 2021, the notorious firm agreed to pay $640 million to get out of litigation with the attorneys general of 50 US states.
In October 2023, McKinsey agreed to pay an additional $230 million to settle other lawsuits. Court documents filed in September of that year showed that $207 million will go to local governments and $23 million is earmarked for public school districts. A judge in the Northern District of California gave final approval to the deal.
The firm still has to dig deep. On December 13, it agreed to settle for a whopping $650 million in another settlement, this time filed in a Virginia court, to avoid a criminal trial related to the opioid crisis. In total, McKinsey could pay more than $1.5 billion to avoid convictions.
This is mainly the same criticism already made of the firm: that of advising opiate manufacturers, including Purdue Pharma and its OxyContin, to boost sales of painkillers.
Under the agreement, McKinsey admits that it knowingly conspired to aid and abet the incriminated companies in knowingly providing misleading communications about highly addictive, prescription drugs.
Under surveillance for 5 years
The firm also agreed to be under surveillance for a period of 5 years for its role in the opioid scandal. While McKinsey does not enjoy the goodwill of the American authorities for not having revealed and admitted its role at the time, the firm has used its cooperation as a bargaining chip. It had already announced in 2019 its decision to stop offering its services on opioid-related matters and committed in this new agreement to no longer advise manufacturers of opioids or any other narcotic, nor for their development, manufacture, promotion or sale.
Purdue Pharma, which has also faced several cases and is considered the main person responsible for this health crisis in the United States, had benefited in 2021 from an agreement ending the proceedings with the payment of 10 billion dollars in penalties, including 4.5 billion provided by the historical owner, namely the Sackler family. Two years earlier, the lab declared bankruptcy in the hope of getting the 10 billion in question.
In addition to the opioid crisis in the US, McKinsey has been linked to numerous other scandals, both internationally and domestically. The firm contributed to the 2008 financial crisis after encouraging banks to convert their clients’ mortgages into mortgage-backed securities, a technique that transfers the risk of mortgage default to the investors who purchased them.
In France, the firm is the subject of three investigations by the National Financial Prosecutor's Office (PNF) after being accused at the end of 2022 by the Senate inquiry committee of tax optimization between 2011 and 2020. The first investigation targets McKinsey for “aggravated laundering of tax fraud” while the other two judicial investigations concern the intervention of the powerful firm in the 2017 and 2022 electoral campaigns of the President of the Republic, Emmanuel Macron.
Translator’s note : by the way… all those millions and billions… whose pockets do they come out, finally ? 🤔
You're an excellent translator!
"...$650 million in a deferred prosecution agreement with the U.S. government to avoid a criminal trial."
Who will get the money? The victims or the government?