When Purdue Pharma pleaded guilty last month to criminal charges involving OxyContin, the Justice Department noted the role an unidentified consulting firm played in boosting sales of the addictive painkiller, even as public outrage rose due to widespread overdoses.
Documents released last week in federal bankruptcy court in New York show that the adviser was McKinsey & Company, the world’s most prestigious consulting firm. The 160 pages include emails and slides revealing new details about McKinsey’s advice to the Sackler family, owners of Purdue billionaires, and the company’s now-famous plan to “load”
In a 2017 presentation, according to documents filed in court on behalf of a number of state prosecutors, McKinsey outlined several options for increasing sales. One was to give Purdue distributors a discount on any overdose with OxyContin due to the pills they sell.
The presentation estimated how many clients of companies, including CVS and Anthem, could overdose. It is projected that in 2019, for example, 2,484 CVS clients will either have an overdose or develop opioid use disorder. A $ 14,810 discount on the “event” means Purdue will pay CVS $ 36.8 million this year.
CVS and Anthem were recently among McKinsey’s largest customers. Press officers from the two companies said they had never received discounts from Purdue for customers who overdosed on OxyContin.
Although McKinsey has not been indicted by the federal government or is on trial, he began to worry about legal consequences in 2018, according to documents. After Massachusetts filed a lawsuit against Purdue, Martin Elling, McKinsey’s North American leader in pharmaceutical practice, wrote to another senior partner, Arnab Gatak, “It probably makes sense to have a quick talk with the risk committee to see if we should do this. anything ”except removing all our documents and emails. Don’t suspect, but when things get harder, someone can turn to us. “
Mr Ghatak, who also advises Purdue, replied: “Thank you for the head. I will do it.”
It is not known whether the company’s consultants continued to destroy any records.
The two men were among McKinsey’s top consultants. Five years earlier, documents show, they emailed colleagues for a meeting at which McKinsey persuaded the Sacklers to aggressively release OxyContin.
“The meeting went very well – the room was filled only with family, including the older statesman Dr. Raymond,” wrote Mr Ghatak, referring to Purdue’s co-founder, Dr. Raymond Sackler, who will die in 2017.
Mr. Elling agreed. “At the end of the meeting,” he wrote, “the findings were crystal clear to all, and they gave a resounding approval for rapid progress.”
McKinsey’s plan was accepted, although Russell Gasdia, then Purdue’s vice president of sales and marketing, questioned the company’s approach, writing to Mr Ghatak the night before the meeting, saying there were real concerns “about the need to charge sales ”of OxyContin.
However, another Purdue CEO, David Lundi, agreed with the strategy. Mr Lundie said the proposal would attract the attention of the Sackler family, according to documents. Really.
As of 2017, Purdue CEO Craig Landau wrote that the crisis was caused by “too many Rxs being written” at “too high a dose” and “too long.” Medicines, he said, are prescribed “for conditions that often do not require them” by doctors who do not have “the necessary training on how to use them properly.”
When McKinsey was later called upon to “dismantle” the aggressive sales campaign, according to the lawsuits, Mr Landau was quoted as saying that this was “something we should have done five years ago”.
On Wednesday, a McKinsey spokesman said the company had “fully cooperated with opioid investigations” and announced in 2019 that it would “not advise clients around the world on opioid-specific businesses.”
In a statement last month, Sacklers said family members “who served on Purdue’s board of directors acted ethically and legally.”
McKinsey’s involvement in the opioid crisis became clear early last year with the release of documents from Massachusetts, one of the countries that tried Purdue. These records show that McKinsey is helping Purdue find a way to “counteract the emotional messages of mothers with teens who have overdosed” from OxyContin.
On Tuesday, Purdue pleaded guilty to criminal charges, including defrauding federal health agencies and paying illegal refusals to doctors. The company also faces about $ 8.3 billion in sanctions. As part of the agreement, members of the Sackler family will pay $ 225 million in civil fines.
In a statement issued after the announcement of the agreement in October, Purdue said he “deeply regrets and takes responsibility” for the misconduct related to the placing on the market of OxyContin.
The federal agreement with Purdue comes as states and municipalities seek compensation from opioid manufacturers to support a health crisis that has killed more than 450,000 Americans since 1999. Purdue is now seeking protection against bankruptcy, as are other manufacturers.
“This is the banality of evil, an MBA edition,” said Anand Giridharadas, a former McKinsey consultant who reviewed the company’s paperwork with Purdue. “They knew what was going on. And they found a way to look past him, through him, around him, to answer the only questions that interest them: how to make money for the client and when the walls close, how to protect themselves. “
Mr. Giridharadas is a contributor to the New York Times who wrote a book for 2018 that explores the power of elites, including those at McKinsey, on how they avoid liability for social harm.
In recent years, McKinsey has drawn criticism and unwanted attention to his relations around the world, including in authoritarian countries such as China, Russia and Saudi Arabia. Her business in South Africa was destroyed after McKinsey worked with companies linked to a corruption scandal that led to the ouster of the country’s president. In the United States, McKinsey has worked with President Trump’s immigration and customs administration to suggest ways to reduce food and housing costs for detainees.
Documents released last week detail McKinsey’s work with Purdue since 2008, a year after the drugmaker pleaded guilty to misleading regulators. Earlier, the Food and Drug Administration told Purdue that OxyContin would face sales restrictions and that doctors who prescribe it would require specialized training.
The Sackler family saw the rules as a threat and, joining McKinsey, planned to “team up” with other opioid manufacturers to withdraw, according to an email. McKinsey prepared Purdue managers for a vital meeting ahead of the FDA’s advisory committee, which reviewed OxyContin’s proposed reformulation to make it less susceptible to abuse. The reformulation came on the market in 2010.
McKinsey gathered briefings that awaited the questions Purdue would receive. One possible question: “Who in Purdue is personally responsible for these deaths?”
Suggested answer: “We all feel responsible.”
Dr. Richard Sackler, now a family patriarch, was pleased with the preparation, writing to his daughter in an e-mail from January 2009: “Mariana, I am writing to tell you how impressed I was with the preparations for the FDA meeting. Both the method and the process, as well as the content, were excellent and a significant departure from similar efforts in the past. “
Purdue’s FDA meeting seems at least partially successful. “Even to this day, the FDA has never required specialized training for OxyContin prescribers,” wrote state attorneys who filed the documents last week.