McKinsey & Company is reportedly in the final stages of negotiating a deferred prosecution agreement with the US Department of Justice (DOJ) to resolve a criminal investigation into its role in advising opioid manufacturers.
The consulting firm is expected to pay more than $600 million to settle the case, which also includes findings of civil violations, according to sources.
Details of the Settlement
The settlement is expected to be announced before the end of the year. It would allow prosecutors to seek dismissal of criminal charges against McKinsey after a specified period, provided the company complies with the agreement’s terms.
Discussions are ongoing, and the exact terms and timeline of the agreement could still change. McKinsey and the DOJ have declined to comment.
The investigation has also examined whether McKinsey obstructed justice in relation to its work with opioid manufacturers.
In 2021, McKinsey terminated two partners for communicating about deleting documents.
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Background on McKinsey’s Involvement
McKinsey has faced widespread lawsuits and legal actions alleging its consulting services for opioid manufacturers, including OxyContin maker Purdue Pharma, contributed to the US opioid epidemic.
The firm previously agreed to pay nearly $1 billion in settlements with various states, local governments, school districts, Native American tribes, and other entities.
These agreements did not include admissions of liability or wrongdoing.
In 2019, McKinsey announced it would cease advising clients on opioid-related businesses.
Purdue Pharma itself pleaded guilty in 2020 to criminal charges related to its handling of prescription painkillers, including defrauding US officials and paying illegal kickbacks.
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Scope of the Investigation
The ongoing DOJ investigation involves prosecutors in Boston and Roanoke, Virginia, alongside officials at DOJ headquarters in Washington, DC.
It covers allegations of McKinsey’s role in helping opioid manufacturers boost sales and whether the firm engaged in obstruction of justice.
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Implications
The $600 million settlement would be one of the largest penalties paid by McKinsey. It highlights the consulting industry’s accountability in public health crises.
It follows years of legal battles over the firm’s work with Purdue Pharma and other companies accused of fueling the opioid addiction epidemic that has claimed hundreds of thousands of lives in the United States.
Purdue Pharma, currently involved in court-ordered mediation over a multibillion-dollar bankruptcy settlement, remains at the center of the opioid crisis litigation.
The US Supreme Court recently intervened to delay Purdue’s settlement, underscoring the ongoing complexity of these cases.
