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The U.S. Department of Justice is conducting a criminal investigation into the consulting firm McKinsey & Company for its role in advising major opioid manufacturers on increasing sales. The investigation also focuses on potential obstruction of justice related to McKinsey’s consulting records for opioid producers.
What Happened: The investigation, which has been ongoing for several years, has led to the formation of a grand jury in Virginia. The U.S. attorney’s offices in the Western District of Virginia and the District of Massachusetts are jointly conducting the probe, reported The Wall Street Journal citing people familiar with the investigation.
The criminal investigation revolves around McKinsey’s advice to pharmaceutical clients, including Purdue, Endo International, and Mallinckrodt, which previously triggered a wave of civil litigation against the firm. McKinsey reached a $642 million settlement with all 50 states and other entities in 2021, without admitting wrongdoing.
The firm’s former clients, Purdue, Endo, and Mallinckrodt, filed for bankruptcy while facing mass lawsuits alleging they sold drugs through misleading marketing practices, exacerbating addiction. McKinsey helped Purdue develop an initiative to boost OxyContin sales, including advising the company to focus on high-volume prescribers.
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McKinsey has previously stated that it ceased work on opioid-specific businesses in 2019 and that its work for Purdue was intended to support the legal use of opioids and patients with legitimate medical needs.
McKinsey did not immediately respond to Benzinga's request for comment.
Why It Matters: The criminal investigation into McKinsey’s opioid-related consulting is a significant development in the ongoing legal battle surrounding the opioid epidemic. This investigation follows a series of similar actions against other entities involved in the crisis.
Earlier this year, in a landmark move, Publicis Groupe (OTC:PUBGY) agreed to a $350 million settlement over its alleged role in the opioid crisis. This marked the first time an advertising firm was held accountable for its part in the epidemic.
Moreover, the Supreme Court temporarily suspended a multi-billion-dollar bankruptcy agreement involving Purdue Pharma, the producer of the opioid OxyContin. This arrangement would have shielded the company’s Sackler family owners from civil lawsuits linked to the opioid epidemic.
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