Consulting firm McKinsey will pay $573 million to settle claims that the company helped fuel the United States’ opioid epidemic through its marketing advice to pharma giants such as Johnson & Johnson and Purdue Pharma LP, Bloomberg reported.
Opioids are painkillers that can be addictive if consumed unchecked, leading to drug abuse.
Sources told Bloomberg that McKinsey will pay up 80 percent of the sum “immediately” to bolster treatment programmes and police budgets that have spread thin to deal with the drug abuse.
Moneycontrol could not independently verify the report.
The rest 20 percent of $573 million settlement will be paid over four years. The settlement will be officially announced on Thursday, the sources added.
McKinsey has also agreed to publicly disclose internal documents that detail its work for the opioid companies as part of the settlement. These documents can be used by state and local governments against the industry in legal proceedings, the report added.
McKinsey came under scrutiny for suggesting ways to “turbocharge” sales of Purdue’s painkiller OxyContin for 15 years amid an opioid market that was shrinking due to negative publicity, North Carolina Attorney General Josh Stein told the publisher.
The settlement has been signed by 49 states, five territories and the District of Columbia. More than 3,000 states and local governments have targeted drugmakers for the opioid epidemic after over 400,000 Americans lost their lives to the drug over the past 20 years.
The sources noted that McKinsey would “not acknowledge wrongdoings”. And a company statement said it “continues to cooperate with government agencies” and denied allegations of wrongdoings saying “past work was lawful.”
Kevin Sneader, Global Managing Partner of McKinsey said the company “chose to resolve the matter to “provide fast, meaningful support to communities across the US” and that it “deeply regrets not adequately acknowledging the tragic consequences of the epidemic.”
“With this agreement, we hope to be part of the solution to the opioid crisis in the US,” Sneader said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
