In the ongoing legal battles surrounding the opioid epidemic in the United States, McKinsey & Co. is set to pay $78 million to health insurers and company benefit plans. This settlement represents the consulting firm’s latest effort to resolve lawsuits related to its advisory role to opioid makers in their sales of highly addictive painkillers.
The proposed settlement, filed in federal court in San Francisco on Friday, aims to address allegations that McKinsey’s management consulting played a role in fueling the US opioid epidemic by providing sales analysis and marketing advice to manufacturers, including Purdue Pharma LP and Johnson & Johnson.
Over 3,000 state and local governments have filed lawsuits against opioid makers, distributors, and sellers, seeking compensation for the billions of tax dollars spent combating the public health crisis triggered by opioid painkillers. It is anticipated that total recoveries across the US will surpass $50 billion as all payments are finalized.
This $78 million settlement adds to McKinsey’s previous payments, exceeding $600 million, to resolve opioid-related lawsuits by state attorneys general. In September, the company also agreed to pay $230 million to settle claims by local governments and school districts.
The recent accord specifically addresses claims against McKinsey by third-party payers, including private benefit plans, multi-employer pension plans, and commercial insurers providing health and welfare benefits. The plaintiffs argued that they suffered harm by covering the costs of prescription opioids instead of safer, non-addictive, and lower-cost alternatives.
McKinsey has acknowledged that its consulting for opioid manufacturers, while lawful, fell short of its high standards. The company committed to ending all work on opioid-specific business more than four years ago and implemented corporate governance reforms to align its work with its values and social responsibility.
The settlement is subject to approval by US District Judge Charles Breyer.
