McKinsey faces a US criminal investigation over opioid industry work

McKinsey & Co is currently the subject of a criminal investigation in the United States regarding allegations that the consulting firm played a significant role in exacerbating the opioid epidemic. Federal prosecutors are focusing on McKinsey's advisory work for OxyContin maker Purdue Pharma and other drug manufacturers, according to three sources familiar with the matter.

The consulting firm and the U.S. Justice Department have both declined to comment on the investigation.

The probe is specifically examining whether McKinsey participated in a criminal conspiracy while advising Purdue and other pharmaceutical companies on marketing strategies to increase sales of prescription painkillers, which ultimately led to widespread addiction and fatal overdoses, as reported by two of the sources.

Additionally, the Justice Department is looking into whether McKinsey was involved in healthcare fraud by allegedly aiding companies selling opioids in making fraudulent claims to government programs like Medicare.

The investigation also includes an inquiry into potential obstruction of justice by McKinsey. This aspect of the probe is related to the firm's acknowledgment that it had terminated two partners who had discussed deleting documents related to their work on opioids, according to the sources.

The investigation was initiated several years ago prior to the global pandemic and involves officials from the Justice Department's offices in Washington, Massachusetts, and Virginia. Discussions are reportedly ongoing between both parties to resolve the probe.

It is important to note that investigations do not imply wrongdoing, and the outcome could range from criminal charges to civil sanctions, or the closure of the probe without further action. The Wall Street Journal previously reported on the Justice Department's investigation.

This investigation highlights how McKinsey's past involvement in advising drugmakers on opioids continues to impact the firm. The stakes are higher in this case compared to other government investigations McKinsey has faced, as criminal charges against the company or its executives, as well as significant financial penalties, are potential outcomes often sought by the Justice Department in such white-collar investigations.

Previously, McKinsey had agreed to settlements totaling nearly $1 billion to resolve a wide range of opioid-related lawsuits and legal actions from all 50 states, Washington, D.C., U.S. territories, various local governments, school districts, Native American tribes, and health insurers.

In 2019, McKinsey announced that it would no longer provide advisory services to clients involved in any opioid-related businesses. The firm has also stated that none of the settlements it has reached contain admissions of liability or wrongdoing.