By Nate Raymond and Mike Spector
BOSTON (Reuters) -McKinsey & Co has agreed to pay $650 million to resolve a U.S. Department of Justice investigation into the consulting firm’s work advising opioid manufacturer OxyContin maker Purdue Pharma on how to boost sales.
McKinsey has entered into a five-year deferred prosecution agreement filed in federal court in Abingdon, Virginia, to resolve criminal charges brought as part of a rare corporate prosecution concerning the marketing of addictive painkillers that helped fuel the deadly U.S. opioid epidemic.
Prosecutors said that McKinsey provided Stamford, Connecticut-based Purdue advice on measures it could take to “turbocharge” OxyContin sales. It was charged with conspiring to misbrand a drug and obstruction of justice.
A former senior partner at McKinsey, Martin Elling, has also agreed to plead guilty to obstruction of justice for destroying records related to McKinsey’s work for Purdue, according to court papers. He is scheduled to enter his plea on Jan. 10.
McKinsey and a lawyer for Elling did not respond immediately to requests for comment.
McKinsey previously reached agreements totaling nearly $1 billion to settle widespread lawsuits and other legal actions alleging the company helped fuel the opioid epidemic through its work advising OxyContin maker Purdue Pharma and other drugmakers.
The settlements involved all 50 states, Washington, D.C., U.S. territories, various local governments, school districts, Native American tribes, and health insurers.
In 2019, McKinsey announced it would no longer advise clients on opioid-related businesses. The company has maintained that none of its settlements contain admissions of liability or wrongdoing.
Purdue pleaded guilty in 2020 to criminal charges covering widespread misconduct regarding its handling of prescription painkillers, including conspiring to defraud U.S. officials and pay illegal kickbacks to both doctors and an electronic healthcare records vendor.
Purdue is currently involved in court-ordered mediation over a multibillion-dollar settlement reached in bankruptcy proceedings that the U.S. Supreme Court turned aside.
(Reporting by Nate Raymond in Boston and Mike Spector in New YorkEditing by Frances Kerry)
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