Consulting firm McKinsey & Co. has agreed to pay $78 million to settle claims that its work with drug companies contributed to the opioid addiction epidemic. The settlement, disclosed in court documents, awaits judicial approval.
Under the proposed agreement, McKinsey would establish a fund to reimburse health insurers, private benefit plans, and others for their prescription opioid costs. The settlement resolves claims by third-party payers, such as insurers, who provide health and welfare benefits.
McKinsey has previously reached settlements in other opioid epidemic-related lawsuits. It paid $641.5 million to state attorneys general, $230 million to local governments, and resolved cases with Native American tribes. The total settlements in the litigation against drugmakers, distributors, and pharmacy chains now exceed $50 billion.
Accusations and Impact
Plaintiffs argued that McKinsey played a role in the deadly drug crisis by assisting drug manufacturers, including Purdue Pharma, in creating misleading marketing strategies to boost painkiller sales. Insurers claimed that these tactics compelled them to cover prescription opioids instead of safer, non-addictive, and more affordable alternatives like over-the-counter pain medication. Consequently, insurers had to bear the costs of opioid addiction treatment.
In response, McKinsey asserted that it did not admit wrongdoing and maintained that its past work was lawful. The firm also stated that it had already pledged in 2019 to cease advising clients on any opioid-related business.
Lawyer Paul Geller, representing the plaintiffs, argued that the drug crisis was a result of an oversupply of dangerous addictive drugs. He stated that the lawsuit aimed to recover some of the money spent on the over-prescribed pills.
According to the U.S. Centers for Disease Control and Prevention, nearly 645,000 people died in the U.S. from overdoses involving prescription and illicit opioids between 1999 and 2021.
Conclusion
The $78 million settlement between McKinsey & Co. and U.S. health insurers and benefit plans marks another step towards resolving lawsuits related to the opioid epidemic. While McKinsey denies any wrongdoing, the settlement seeks to address the financial burdens faced by insurers due to the over-prescription of opioids. The total settlements in the ongoing litigation now exceed $50 billion, highlighting the magnitude of the crisis and the efforts to hold various parties accountable.
