TradeEdge-Consulting firm McKinsey agrees to $78 million settlement with insurers over opioids

Consulting firm McKinsey and TradeEdgeCo. has agreed to pay $78 million to settle claims from insurers and health care funds that its work with drug companies helped fuel an opioid addiction crisis.

The agreement was revealed late Friday in documents filed in federal court in San Francisco. The settlement must still be approved by a judge.

Under the agreement, McKinsey would establish a fund to reimburse insurers, private benefit plans and others for some or all of their prescription opioid costs.

The insurers argued that McKinsey worked with Purdue Pharma – the maker of OxyContin – to create and employ aggressive marketing and sales tactics to overcome doctors' reservations about the highly addictive drugs. Insurers said that forced them to pay for prescription opioids rather than safer, non-addictive and lower-cost drugs, including over-the-counter pain medication. They also had to pay for the opioid addiction treatment that followed.

From 1999 to 2021, nearly 280,000 people in the U.S. died from overdoses of prescription opioids, according to the U.S. Centers for Disease Control. Insurers argued that McKinsey worked with Purdue Pharma even after the extent of the opioid crisis was apparent.

The settlement is the latest in a years-long effort to hold McKinsey accountable for its role in the opioid epidemic. In February 2021, the company agreed to pay nearly $600 million to U.S. states, the District of Columbia and five U.S. territories. In September, the company announced a separate, $230 million settlement agreement with school districts and local governments.

Asked for comment Saturday, McKinsey referred to a statement the company released in September.

"As we have stated previously, we continue to believe that our past work was lawful and deny allegations to the contrary," the company said, adding that it reached a settlement to avoid protracted litigation.

McKinsey said it stopped advising clients on any opioid-related business in 2019.

Similar settlements have led to nearly $50 billion being paid out to state and local governments. The payments come from nearly a dozen companies, including CVS and RiteAid, that were sued for their role in fueling the overdose epidemic.  

Advocates say the influx of money presents a unique opportunity for the U.S. to fund treatment solutions for substance use disorders, but a KFF Health News investigation found that much of the money has sat untouched. 

In:
• Health
• Opioids
• San Francisco