Consulting firm McKinsey to pay $230 million in latest US opioid settlements

[September 27, 2023]  By Nate Raymond

(Reuters) -Consulting firm McKinsey & Co has agreed to pay $230 million to resolve lawsuits by hundreds of U.S. local governments and school districts alleging it fueled an epidemic of opioid addiction through its work for bankrupt OxyContin maker Purdue Pharma and other drug companies.

The settlements, which require a judge's approval, were disclosed in papers filed on Tuesday in federal court in San Francisco. The money is on top of $641.5 million that McKinsey already paid to resolve claims by state attorneys-general.

McKinsey will pay $207 million to resolve claims by counties and municipalities, and another $23 million to resolve claims by public school districts. McKinsey had previously said it had agreed to resolve the cases but had not disclosed for how much.

Aelish Baig, a lawyer for the local governments, in a statement called the deal "a strong outcome for the communities harmed by this crisis".

McKinsey has not admitted wrongdoing. In a statement, the firm said it continued to believe its past work was lawful. It also noted it had committed in 2019 to no longer advise clients on any opioid-related business.

Thousands of lawsuits have been filed by states, local governments and Native American tribes accusing drug companies of downplaying the risks of opioid painkillers, and distributors and pharmacies of ignoring red flags that they were being trafficked illegally.

Bottles of prescription painkiller OxyContin made by Purdue Pharma LP sit on a shelf at a local pharmacy in Provo, Utah, U.S., April 25, 2017. REUTERS/George Frey/File Photo

The litigation has resulted in more than $51 billion in settlements, according to lawyers for the plaintiffs, with deals already struck with major drugmakers and the nation's largest distributors.

The lawsuits accused McKinsey, one of the leading global consulting firms, of contributing to the deadly drug crisis by helping drug manufacturers including Purdue Pharma design deceptive marketing plans and boost sales of painkillers.

Nearly 645,000 people died in the United States from overdoses involving opioids, both prescription and illicit, from 1999 to 2021, according to the U.S. Centers for Disease Control and Prevention.

The U.S. Supreme Court last month agreed to hear a challenge by President Joe Biden's administration to Purdue Pharma's multi-billion-dollar bankruptcy settlement resolving related claims against the drugmaker.

(Reporting by Nate Raymond in Boston; editing by Miral Fahmy)

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