What did McKinsey do for Purdue, and how did the cases end?

analysisMcKinsey contracted with Purdue on 75 different engagements in the United States between 2004 and 2019, the Justice Department said in announcing its 2024 resolution, summarising the Agreed Statement of Facts that McKinsey accepted; the 71-page statement itself is not retained. After a Purdue affiliate's 2007 guilty plea, McKinsey partners maintained close contact with Purdue, worked with it in 2009 to enhance "brand loyalty" for OxyContin and in 2010 helped it obtain FDA approval of a reformulated, abuse-deterrent OxyContin. On Purdue's side, John Stewart, CEO of Purdue Pharma L.P. and Purdue Pharma Inc. from June 2007 to December 2013, stated in a declaration in the Massachusetts case that McKinsey's work had a nationwide scope, that he was aware of it and occasionally met McKinsey's managing director, who worked in Stamford, Connecticut, and that specific groups of Purdue personnel, not he, handled the projects day to day; his declaration answers allegations of the Commonwealth that are not retained. ^{1 2}

analysisIn May 2013 Purdue retained McKinsey to assess the drivers of OxyContin performance and the opportunities to increase near-term OxyContin revenue, the Justice Department says. The resulting Evolve to Excellence (E2E) programme included McKinsey advising Purdue to "turbocharge" the OxyContin sales pipeline by intensifying marketing to High Value Prescribers, including prescribers writing opioid prescriptions for uses that were unsafe, ineffective and medically unnecessary; McKinsey consultants went on "ride-alongs" with Purdue sales representatives; in August 2013 McKinsey partners presented their findings to members of the Purdue board from the family that controlled Purdue; and after E2E McKinsey did further work aimed at maximising OxyContin sales to the same prescribers. This is DOJ's summary of facts McKinsey agreed in its resolution; the statement is not retained, and the release notes that the details in the charging documents and civil resolution are allegations. ¹

analysisThe United States' 2020 settlement with four family members and an estate describes the same months from the board's side but leaves the consulting company unnamed: a contract of 28 May 2013, Richard Sackler's direct contact with the firm, a meeting he arranged for the board without Purdue executives and, on 23 August 2013, a meeting of certain family members with the firm. The matching contract wording, dates and quoted partner email point to McKinsey, but neither DOJ document states the identification, so those contentions — which the family members deny — are treated on the consultants page as statements about an unnamed consulting company. ^{2 1 3}

analysisOn 5 February 2021 the New York Attorney General filed a complaint against McKinsey & Company, Inc. United States, McKinsey's U.S. entity, in Suffolk County (Index No. 400001/2021), alleging under General Business Law § 349 that McKinsey sold its ideas to Purdue Pharma, L.P. from 2004 to 2019, before and after the 2007 guilty plea; that it worked on Purdue's FDA-mandated risk evaluation and mitigation strategy in 2008 and on OxyContin "brand loyalty" in 2009; that in 2013 it laid out the plan, implemented with McKinsey as "Evolve 2 Excellence", to "Turbocharg[e] Purdue's Sales Engine"; and that its partners sat on an Executive Oversight Team reporting to Purdue's executives, its board and members of the Sackler family individually. The complaint further alleges that McKinsey urged Purdue's owners (the passage does not say which of them) to answer an unnamed pharmacy chain's scrutiny of suspicious orders with senior-level talks, patient-advocacy pressure against dispensing limits and an alternative distribution channel such as mail-order delivery; it notes indications that individuals at McKinsey considered deleting documents and that McKinsey announced in 2019 that it no longer worked for Purdue or other opioid manufacturers. These allegations were not adjudicated: the complaint was filed together with an agreement and consent judgment under which McKinsey was to provide more than $573 million to the participating states and territories and stop advising on Schedule II and III opioids. ^{1 2}

analysisThe complaint, dated 4 February 2021, pleads a single claim under General Business Law § 349 and asks for a declaration, a permanent injunction against deceptive practices, monetary relief of up to "$32.158.566.52" as printed in the retained copy, and costs — relief requested, not awarded; New York was to receive more than $32 million under the multistate agreement. That agreement and consent judgment, filed on 4 February 2021 by 47 states, the District of Columbia and five territories, also required McKinsey, besides providing more than $573 million minus costs, to release tens of thousands of internal documents on its work for Purdue Pharma and other opioid manufacturers, adopt a strict document-retention plan, continue investigating allegations that two partners tried to destroy documents in response to investigations of Purdue Pharma, implement an ethics code certified annually by all partners and stop advising on Schedule II and III opioid narcotics. The terms are known from the Attorney General's release, which does not say whether McKinsey admitted the allegations; the Attorney General characterised McKinsey as having advised Purdue and the Sackler family members who control it on maximising opioid profits and McKinsey partners as having emailed about deleting documents once states sued Purdue's directors, a characterisation that is not a court finding. ^{1 2}

analysisOn 13 December 2024 the Justice Department announced that McKinsey & Company Inc. had agreed to pay $650 million to resolve a criminal and civil investigation of its work for Purdue Pharma L.P. on OxyContin sales and marketing, including the 2013 engagement: a penalty of over $231 million, a forfeiture of over $93 million — all the money Purdue paid McKinsey from 2004 to 2019 — and $2 million to the Virginia Medicaid Fraud Control Unit for the criminal allegations, and over $323 million in a civil False Claims Act settlement. McKinsey also agreed not to work on the marketing, sale, promotion or distribution of controlled substances during the five-year term of the deferred prosecution agreement and to implement a compliance programme, and its U.S. subsidiary entered a five-year corporate integrity agreement with HHS-OIG. DOJ credited McKinsey's cooperation and remedial measures, including stopping all opioid-specific work in 2019 and terminating two senior partners, among them Martin Elling, who had communicated about deleting opioid-related documents concerning Purdue. The release notes that the details in the charging documents and civil resolution are allegations; the payments are McKinsey's own liability, not Purdue's or the Sackler family's. ¹

analysisThe charged party was McKinsey's U.S. subsidiary, McKinsey & Company, Inc. United States. The U.S. Attorneys for the Western District of Virginia and the District of Massachusetts filed an Information in the Western District of Virginia at Abingdon, entered on 13 December 2024, with two counts: a misdemeanor conspiracy, from about April 2012 to February 2018, with Purdue Pharma L.P. and others to aid and abet the misbranding of prescription drugs held for sale without valid prescriptions, and a felony of destroying and concealing records, through the acts of a senior partner, between about April and September 2018 to impede a federal investigation. The charges were resolved by the five-year deferred prosecution agreement, not a conviction, and DOJ notes that charging-document details are allegations; prosecution was deferred and McKinsey agreed to total payments of $650 million. Purdue Pharma L.P. is named in the Information as a co-conspirator, not charged in it. ^{2 1}

analysisThe civil settlement also resolves allegations that from 2013 to 2014 McKinsey US, by advising Purdue to turbocharge OxyContin marketing to High Value Prescribers, caused false claims for OxyContin to be submitted to federal health programmes, and that from 2014 to 2017 it knowingly misled the FDA by assigning consultants to concurrent FDA projects and competitively sensitive Purdue projects, contrary to its conflict-of-interest policy. These allegations were settled, not adjudicated, by McKinsey's payment of over $323 million. In the civil resolution, as DOJ describes it, McKinsey US admitted that it did not inform the FDA that its consultants worked on the Purdue projects around the same time those consultants also worked on the FDA project. ¹

analysisAccording to the charging documents as DOJ summarised them, Martin E. Elling, a former McKinsey senior partner, directed the client services team for approximately 30 of McKinsey's engagements with Purdue, had a senior, relationship-focused role on E2E and helped secure that engagement; McKinsey terminated him as part of its remedial measures. On 13 December 2024 DOJ announced that he had been charged in federal court in Abingdon, Virginia, with one count of knowingly destroying records, documents and tangible objects with intent to impede, obstruct and influence a Justice Department investigation; the charging documents allege that on 4 July 2018, after reading that a Purdue board member was being sued by state attorneys general, he emailed another senior partner about whether to do anything other than eliminate "all our documents and emails", and that forensic analysis of his McKinsey laptop showed he had removed Purdue-related materials and a Purdue-related email folder. He agreed to plead guilty and was expected to enter his plea and be sentenced at later dates; the charging documents are not retained, the record does not show the plea entered or any sentence, and the release states that defendants are presumed innocent until proven guilty. ¹

analysisClaims against McKinsey also figure in Purdue's bankruptcy. The claims agent's website lists two adversary proceedings brought by local governments against McKinsey in the case — Alma, Georgia et al. v. McKinsey & Company, Inc. et al. (No. 22-07044) and Bayonne, New Jersey et al. v. McKinsey & Company, Inc. et al. (No. 22-07045) — and the plan confirmed by the Bankruptcy Court (Doc 8263) makes all retained causes of action against McKinsey & Company "MDT Causes of Action", which pass to the Master Disbursement Trust. That treatment preserves the estate's claims without establishing their merit, and the retained record does not show their outcome. ¹