California will get $59.6 million as part of opioid epidemic settlement with McKinsey & Co.
California Attorney General Xavier Becerra announced Thursday that worldwide management consultant McKinsey & Co. will pay out $573 million to 47 states, including a little more than $59.6 million to California, to settle an investigation into its role in the opioid epidemic.
“The abuse of opioids, not just by those who consumed these drugs but by those who produced, marketed, distributed and dispensed them, has left much of America in mourning. We can’t bring back lost lives, but we can hold ringleaders accountable,” Becerra said. “McKinsey & Company was a player in this unfolding opioids tragedy. Today’s settlement holds McKinsey to account.”
In a statement, McKinsey leaders said they believe their past work was lawful and deny allegations to the contrary and they said the attorneys general recognized their “good faith and responsible corporate citizenship in reaching this resolution.”
Becerra noted that the opioid epidemic has taken a heavy toll in California, with the California Department of Public Health reporting 3,244 deaths related to opioid overdose in 2019 alone.
Hundreds of municipalities, states and Native American tribes have leveled lawsuits against many big players, saying that manufacturers, distributors and other companies used misleading marketing to generate sales. Society paid for these practices, the lawsuits allege, through increased costs for healthcare, child welfare and criminal justice, among other expenses.
In November, OxyContin manufacturer Purdue Pharma and its owners, the Sackler family, made a controversial settlement with the federal government, agreeing to pay out roughly $8.3 billion to resolve all federal criminal and civil charges, but lawsuits by the state of California, other states and tribal entities continue.
Last year, Becerra’s team negotiated a $1.6 billion settlement with opioid manufacturer Mallinckrodt on behalf of state attorneys general and some local subdivisions. The AG’s Office continues to investigate other players in the epidemic.
Becerra said that, in addition to providing funds to address the opioid crisis, McKinsey has agreed to provide “tens of thousands of its internal documents detailing its work for Purdue Pharma and other opioid companies for public disclosure online” and it will ensure documents related to this work are retained. There are allegations, Becerra said, that two McKinsey partners tried to destroy documents in response to investigations of Purdue Pharma.
McKinsey also will have implement a strict ethics code that all partners must agree to annually, Becerra said, and it will stop advising companies on potentially dangerous narcotics.
Along with California, the settlement with McKinsey also included Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Wisconsin, Wyoming, the District of Columbia, and the territories of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. The case was filed in Alameda County Superior Court in Oakland.
New York-based McKinsey said it also had reached a separate $13.5 million deal with Washington’s attorney general and a $10 million agreement with West Virginia authorities.
This story was originally published February 4, 2021 at 3:54 PM.
