McKinsey & Co, the prestigious global consulting firm, is currently under criminal investigation in the United States over allegations that the company played a key role in fueling the devastating opioid epidemic.
Federal prosecutors are homing in on McKinsey’s work advising OxyContin maker Purdue Pharma and other drugmakers, according to three people familiar with the matter.
The consulting firm and the U.S. Justice Department have both declined to comment on the ongoing investigation.
The probe is focused on whether McKinsey engaged in a criminal conspiracy when advising Purdue and other pharmaceutical manufacturers on marketing strategies to boost sales of prescription painkillers.
Those highly addictive opioid pills ultimately triggered widespread addiction and fatal overdoses, two of the people with knowledge of the probe told Reuters.
The Justice Department is also investigating whether McKinsey conspired to commit healthcare fraud through its consulting work for companies selling opioids.
Investigators are probing if this consulting work allegedly resulted in fraudulent claims being made to government programs such as Medicare, the sources said.
Prosecutors are also looking at whether McKinsey obstructed justice, an inquiry related to the firm’s disclosure that it had fired two partners who communicated about deleting documents related to their opioids work.
The wide-ranging probe, which was opened several years ago before the onset of the global pandemic, involves Justice Department officials spanning offices in Washington, Massachusetts and Virginia, the sources said.
Both sides are currently in discussions to try to resolve the probe, according to one of the people familiar with the matter.
It’s important to note that investigations are not evidence of wrongdoing, and the officials conducting this inquiry could ultimately pursue criminal charges, seek civil sanctions, or close the probe without taking any action.
The Wall Street Journal had previously reported on the existence of the Justice Department’s criminal investigation into McKinsey.
This Justice Department probe underscores how McKinsey’s past work advising drugmakers on opioids continues to haunt the near-century-old consulting firm.
The stakes are higher in this case than other government investigations McKinsey has resolved, due to the potential for criminal charges against the company or its executives, as well as the steep financial penalties the Justice Department often demands in white-collar probes.
McKinsey has already reached separate agreements totaling nearly $1 billion to settle widespread opioid lawsuits and other related legal actions brought by all 50 U.S. states.
The consulting firm also announced in 2019 that it would no longer advise clients on any opioid-related businesses.
However, none of McKinsey’s previous settlements have contained any admissions of liability or wrongdoing, the company has stated.
This work, while lawful, fell short of the high standards we set for ourselves.”
Purdue Pharma, the OxyContin maker owned by the disgraced Sackler family, did not immediately respond to a request for comment on the ongoing criminal investigation of McKinsey.
Purdue Pharma previously pleaded guilty in 2020 to criminal charges over its handling of opioid painkillers.
The drugmaker filed for bankruptcy in 2019 and later negotiated a settlement valued at about $10 billion to resolve thousands of lawsuits alleging it contributed to the opioid crisis.
However, the Supreme Court has since halted that settlement, and is soon expected to rule on a Biden administration challenge to the deal.
Prosecutors are still far from making any charging decisions in their criminal investigation of McKinsey, in part because they are sifting through voluminous documents as part of their inquiry and engaging in discussions with the consulting firm’s lawyers, according to one of the sources.
