Consulting firm McKinsey to pay $230m in latest US opioid settlements

Consulting firm McKinsey & Co has agreed to pay $230m (about R4.4bn) to resolve lawsuits by hundreds of US local governments and school districts alleging it fuelled an epidemic of opioid addiction through its work for bankrupt OxyContin maker Purdue Pharma and other drug companies.

The settlements, which require a judge's approval, were disclosed in papers filed on Tuesday in federal court in San Francisco. The money is on top of $641.5m (R12.29bn) McKinsey already paid to resolve claims by state attorneys-general.

McKinsey will pay $207m (R3.96bn) to resolve claims by counties and municipalities, and another $23m (R440.4m) to resolve claims by public school districts. McKinsey previously said it had agreed to resolve the cases but had not disclosed for how much.

Aelish Baig, a lawyer for the local governments, called the deal “a strong outcome for the communities harmed by this crisis”.

McKinsey has not admitted wrongdoing. The firm said it believed its past work was lawful. It also noted it had committed in 2019 to no longer advise clients on opioid-related business.

Thousands of lawsuits have been filed by states, local governments and Native American tribes accusing drug companies of downplaying the risks of opioid painkillers and distributors and pharmacies of ignoring red flags that they were being trafficked illegally.

The litigation has resulted in more than $51bn (R976.8bn) in settlements, according to lawyers for the plaintiffs, with deals already struck with major drugmakers and the nation's largest distributors.

The lawsuits accused McKinsey, one of the leading global consulting firms, of contributing to the deadly drug crisis by helping drug manufacturers including Purdue Pharma design deceptive marketing plans and boost sales of painkillers.

Nearly 645,000 people died in the US from overdoses involving opioids, both prescription and illicit, from 1999 to 2021, according to the US Centers for Disease Control and Prevention.

The US Supreme Court last month agreed to hear a challenge by President Joe Biden's administration to Purdue Pharma's multibillion-dollar bankruptcy settlement resolving related claims against the drugmaker.

Reuters