Last week’s news that consulting giant McKinsey & Company had reached a $573 million settlement with nearly 50 state governments brings a new player to the opioid settlement table – and it isn’t a manufacturer, distributor, dispenser or health care provider (i.e., a prescriber or a pharmacist). It’s a consulting firm.
How did the attorneys general from 47 states, the District of Columbia and five U.S. territories achieve this result? As a direct fallout of the $8 billion deal reached by OxyContin maker Purdue Pharma and Purdue’s subsequent bankruptcy proceedings.
The states charged McKinsey contributed to the opioid crisis by promoting marketing schemes and consulting services for opioid manufacturers, including Purdue Pharma, for more than a decade.
Legal documents that were made public as part of Purdue Pharma’s efforts to settle claims against it through bankruptcy court showed McKinsey’s efforts over the years included encouraging Purdue sales representatives to focus on doctors who already prescribed high volumes of OxyContin and to try to move patients to more potent doses of the drug, various news reports explained.
Tennessee Attorney General Herbert Slattery announced Tennessee will receive $15,217,532 of the settlement funds. That’s sweet news for the state, as the payment is earmarked for abating the raging overdose and addiction crisis that sadly has deepened during the coronavirus pandemic (an epidemic growing within a pandemic).
A fascinating part of this settlement is that McKinsey has agreed to make public all its communications with Purdue, plus those dealing with the opioid businesses of pharmaceutical companies Endo, Johnson & Johnson and Mallinckrodt.
Wow! One can only wonder, what explosive information awaits discovery in that treasure trove of documents?
States have been negotiating since 2019 with the nation’s three largest drug distributors, McKesson Corporation, AmerisourceBergen Corporation and Cardinal Health, as well as drugmaker Johnson & Johnson.
The companies have reportedly set aside a collective $26 billion to try and settle the claims, but no final agreement has been reached. Will McKinsey’s settlement and document release be the tipping point?
In his comments about the settlement, Kevin Sneader, global managing partner of McKinsey, said, “We chose to resolve this matter in order to provide fast, meaningful support to communities across the United States. We deeply regret that we did not adequately acknowledge the tragic consequences of the epidemic unfolding in our communities. With this agreement, we hope to be part of the solution to the opioid crisis in the U.S.”
From a practical standpoint, McKinsey’s settlement might really help save some lives if treatment facilities receive an infusion of desperately needed funding.
The company has also terminated two of its partners for communicating about “deleting” documents.
What??? Most litigators would agree it’s extremely difficult to defend any claim in which there’s evidence that either company executives and/or employees altered, destroyed or discarded key documents.
To McKinsey’s credit, the company said it has hired a new general counsel with a deep background in ethics and it will boost professional standards training for its employees.
Well, 2021 has opened with an early legal “bang” on the opioid front line. When McKinsey’s settlement is viewed in light of the opioid lawsuit filed by the Justice Department against Walmart in December and Tennessee’s recent opioid lawsuit against Food City, one can easily see that the opioid front’s legal “net” is getting larger and larger – and catching bigger and bigger fish in the process.
Michel & Ward is a boutique litigation law firm focusing on trial and appellate advocacy. Chattanooga attorneys Alix Michel and David Ward have been helping clients varying from insurance companies, construction companies and trucking companies to aging parents, children and health care providers for the last 26 years.