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McKinsey & Co. will pay $650 million to settle federal charges tied to its work with Purdue Pharma, helping market the opioid OxyContin, U.S. prosecutors announced Friday. The agreement resolves conspiracy, obstruction, and False Claims Act allegations, marking one of the most significant settlements related to the opioid crisis.

Deferred Prosecution Agreement Reached

The consulting firm entered a five-year deferred prosecution agreement (DPA) with the U.S. Attorney’s Offices for the Western District of Virginia and Massachusetts, alongside the Department of Justice (DOJ). The settlement includes forfeiture of $93 million in fees McKinsey earned from Purdue and prohibits McKinsey from engaging in future marketing of controlled substances.

The DPA also mandates that McKinsey develop an enhanced compliance program and submit to government oversight from the DOJ and Department of Health and Human Services.

In a statement, McKinsey expressed remorse: "We should have appreciated the harm opioids were causing in our society and should not have undertaken sales and marketing work for Purdue Pharma."

Work with Purdue Pharma Under Scrutiny

Between 2004 and 2019, McKinsey’s Pharmaceutical and Medical Products practice collaborated with Purdue on 75 projects, using data analytics to boost OxyContin sales. This relationship persisted even after Purdue executives admitted to federal charges for misleading marketing practices.

Notably, McKinsey helped Purdue secure Food and Drug Administration (FDA) approval in 2013 for a reformulated version of OxyContin, which the company claimed was harder to abuse. Internal communications cited in the settlement reveal McKinsey consultants celebrated the FDA’s decision, with one email stating, "[we] did it."

Document Destruction Allegations Against Former Partner

As part of the settlement, McKinsey senior partner Martin Elling will plead guilty to destroying documents during the investigation. Prosecutors allege that Elling deleted files from a company laptop in 2018 after learning that Purdue was implicated in a lawsuit by the Massachusetts attorney general.

Elling reportedly advised a colleague to "eliminate all our documents and emails," suggesting that McKinsey prepare for legal challenges. Under his plea deal, Elling faces a potential fine of $250,000 and six to 12 months in prison.

Dual Role Raises Questions

Prosecutors highlighted McKinsey’s dual involvement with Purdue and the FDA. While consulting for Purdue on cost-reduction strategies, McKinsey simultaneously worked with the FDA on its Sentinel Initiative, designed to monitor drug safety. This overlap raised ethical concerns about potential conflicts of interest.

Legal Representation and Broader Implications

McKinsey’s legal team includes attorneys from Morrison Foerster LLP, Hogan Lovells US LLP, and in-house counsel. Elling is represented by Marjorie Peerce of Ballard Spahr LLP. Federal prosecutors from multiple agencies and offices led the government’s case.

The $650 million settlement underscores the growing accountability for corporations contributing to the opioid epidemic. However, critics argue it does little to address the broader public health crisis fueled by OxyContin and similar drugs.